PACE Financing

PACE , or Property Assessed Clean Energy Bonds, are the new method for financing energy retrofits.

This new tool allows the owner of a building to make energy saving changes without putting up any money and, without assuming any personal liability. In fact the credit worthiness of the owner is not even considered when it comes to determining whether a loan should be granted. As long as property taxes are current and mortgage payments up to date, a loan can be approved for as much as 10% of the assessed value of the property. While this can come to a rather large amount, it is necessary since the cost of weatherization and certain energy saving measures can be quite expensive. The loans themselves are usually for twenty years and do not accelerate if there is a default. Nor do they need to be paid off when the property changes hands. This type of loan is designed so that annual payments of principle and interest of the energy retrofit do not exceed expected annual energy savings, thus resulting in a positive cash flow to the owner of the property. Loans are given through a municipal entity and are considered a first lien on the property, having priority over all mortgages. Owners of a property can opt into the program and annual payments to repay the loan are tacked on to the property tax on that particular parcel.

This financing is provided to upgrade the energy efficiency of all privately owned building stock in the United States, to lessen the Country’s dependence on fossil fuel and its dependence on foreign oil and finally to lower the Country’s carbon footprint. These goals are all determined to be in the National Interest and serve a public purpose so terms on the loan are very generous. Right now two bills are working their way through Congress so that the Department of Energy will act as a guarantor for these loans and result in a lowered interest rate. PACE financing will revolutionize how real estate improvements are made.

Enacting legislation has already been approved in 23 states since 2008 and Property Assessed Clean Energy Bonds are expected to become a 500 billion dollar vehicle for energy saving changes in the near future. They are a wonderful opportunity by which plant air purification can be installed into buildings without the owner having to pay for the cost of installation, especially now that plant air purification has been proven to save energy.

Because of Mr. Mittelmark’s past business experience as a municipal bond salesman and analyst, and the president of Municipal Liens Inc.–a firm which sold tax liens. He saw the wonderful opportunity PACE financing would bring to energy retrofits and so he has aligned himself with firms that will be big in the Property Assessed Clean Energy Bond market. By having such connections PACE financing should be readily available to would be purchasers of the plant air purification system.

A three year $400,000 study using Phytofilter Technologies, Inc. design on a built in system of plant air purification was tested at Syracuse University’s Center of Excellence and found to both purify the air and save as much as 10-15% on the cooling and heating of a structure with a 26% saving on heating alone. This installation was installed in a building on the Syracuse University Campus. The study was funded by the EPA, the New York State Research and Development Authority and by Phytofilter Technologies.