By James Kennedy, Founder and President Beach Cities Solar Consulting LLC
Commercial, Industrial, and Agricultural property owners across the country are reaping the benefits that PACE financing provides with solar energy and storage loans that help reduce monthly energy expenses with $0 CAPEX, all while being tax-deductible!
Please seek the guidance of a licensed tax professional regarding your specific situation as we are not tax professionals and are not providing any tax advice.
Ygene is one of many Property Assessed Clean Energy lenders
PACE financing allows state and local governments, if allowed by state law, to fund the cost up front of various energy improvements on commercial properties. The property owner then pays it back over time, as an attachment to their property taxes. PACE financing for solar, batteries, and re-roofs is based upon what is called a land- secured financial district system. This is commonly referred to as ‘assessment district’ or a local improvement district, or a similar type of wording. In the typical assessment district, the local government will issue bonds to pay for projects for a public purpose, such as sewer systems, streetlights, and utility lines underground.
The recent extension of this type of model to finance energy efficient improvements and renewable energy improvements that let property owners implement various property improvements without a large upfront cash payment, makes it more likely that businesses will pull the trigger on these improvements.
Property owners may choose voluntarily to have PACE improvements made over a certain period of years, typically 10 to 20. This is done via property assessments and is secured by the equity in the property. PACE financing does not affect a business’s existing credit lines. It is typically paid as an add-on to one’s property tax bills each year. Not paying the bill will result in the same types of consequences as not paying property taxes, up to and including property foreclosure.
If you are considering solar panels, battery storage, a re-roof, or other energy efficient improvements, understand that a PACE assessment is a debt on the property. It means that the debt is tied to your property, and not to the owner. So, the obligation for repaying the debt usually transfers if the property is sold. In such a case, the new property owner would agree to pay the PACE bill and the new first mortgage company would allow the PACE obligation to stay on the property. This addresses one of the big problems of investing in major energy improvements in the business.
Get your turnkey commercial, industrial, or agricultural solar system and battery proposal with PACE financing options by e-mailing us your last 12 months electric bills, a picture of the facilities’ switchgear, and a picture of your roof or vacant land today: firstname.lastname@example.org