Property Assessed Clean Energy (PACE) Solar Financing Programs are Helping Business and Commercial Property Install Solar Panels in Florida

With utility costs on the rise and the price of solar systems declining, the switch to solar energy can be a cost-effective alternative for many business owners. While going green saves money in the long-run, the high upfront costs of solar can be daunting. To help promote sustainability, the State of Florida approved the Property Assessed Clean Energy (PACE) program for local governments to implement. PACE makes solar more accessible by giving commercial property owners access to low-interest financing through an approved third-party provider to cover the upfront costs of solar solutions, which are paid back over time through a voluntary tax assessment levied on the property.

How Does PACE Solar Financing Work?

PACE provides financing for a variety of eligible improvements to a commercial property, including energy efficiency, HVAC, hurricane protection improvements and more. The program offers 100% financing at competitive fixed rates over the useful life of the improvements, up to 30 years (rates for commercial projects vary depending on the term), which allows for the cost savings gained from solar to be used to pay back the initial investment. Property owners that voluntarily choose to participate in a PACE program repay their improvement costs over a set time period through property assessments, which are secured by the property itself instead of the owner and paid as an addition to the owners’ property tax bills. Thinking of moving? The assessments can transfer ownership if a property is sold as long as the buyer agrees to take over the PACE obligation and the new first mortgage holder allows the PACE agreement to remain on the property.

There are five active PACE programs in Florida offering commercial financing:

1. CounterPointeSRE – Every county and city in Florida is invited to take part in the Florida PACE Funding Agency (FPFA), a single purpose local government making its PACE program available to any subscribing Florida city or county. The CounterPointeSRE Program is the commercial PACE program offered by the FPFA and operates in more than 20 counties in Florida, including Broward, Miami-Dade and Palm Beach counties.
2. Ygrene Energy Fund – Ygrene is the exclusive administrator of the Clean Energy Green Corridor District of over 85 municipalities, including the cities of Coral Gables, Cutler Bay, Miami, Miami Shores, South Miami, Pinecrest and Palmetto Bay.
3. Solar Energy Loan Fund (SELF) – Administers St. Lucie County’s commercial PACE program
4. RenewPACE – A program of the Florida Green Finance Authority (a partnership of local governments from across Florida), RenewPACE works with multiple banks and financial institutions to offer the only Open Market-based PACE finance program in Florida to help commercial property owners finance renewable energy improvements.
5. Leon County Commercial PACE Program

PACE Solar Financing Benefits

In addition to being a feel-good investment that resonates with employees, tenants, and customers, solar reduces energy costs for commercial property owners, stimulates the economy through local job creation, and increases commercial property values. PACE provides its own set of benefits for commercial businesses, one of which is allowing business owners to keep the rebates and tax incentives that come with solar while receiving financing. Other benefits include:

• PACE provides an innovative solution for capital improvements, especially for businesses with a limited capital budget
• Gain control over energy costs with lower utility bills, improving cash flow and capital costs which can be seen as soon as the first year following project completion
• The assessment may qualify as an operating expense and not an investment and therefore not subject to ROI limitations
• PACE financing optimizes a building’s capital stack with potential for off-balance sheet treatment and no acceleration clauses
• Since PACE financing is a tax, it may be reported similar to other line item taxes on the property’s income statement (always check with your tax preparer)
• Non-ad valorem assessment for tax purposes
• There are no balloon payments, so the terms match the useful life of the solar solution
• Fixed interest rates up to 30 years
• 100% financing of the entire cost of the project, including all soft costs such as permits, inspections, pre-paid service/warranty contracts and design fees
• Closing costs can be capitalized
• Maturities between 5-30 years up to the estimated useful life of the improvement
• Prepayment is not required upon sale or refinancing of the property

More than 60 cities and counties throughout the state of Florida have PACE financing programs in place. This number will continue to grow as more communities experience the many benefits of going green.

Contact us today for more information on how your business can benefit from PACE Financing Florida.