Minnesota PACE Financing
Across the nation, PACE financing (Property Assessed Clean Energy) is making energy efficiency upgrades and renewable energy investments more attainable to commercial building owners. In Minnesota, most PACE loans are run through MinnPACE. MinnPACE is a fit for most industries including farms, commercial office buildings, nonprofit organizations (including places of worship), and multi-tenant buildings. Common investments include solar panels, HVAC systems, lighting, motors, and more.
MinnPACE Adds Value
MinnPACE brings value to Minnesota commercial building owners by improving their bottom line. To start, MinnPACE covers 100 percent of all project costs. Going forward, payments are repaid through a special property tax assessment with terms up to 20 years. As a result, projects become cash positive with financial savings outweighing financial burden.
To learn more about PACE financing nationwide, go to pacenation.org.
How Does Minnesota PACE Financing Work?
The local government (city or county) establishes a Joint Powers Agreement with MinnPACE.
- Commercial building owners evaluate and select projects that reduce energy costs.
- MinnPACE provides financing directly to the building owner. In some instances, MinnPACE will secure funding from a third party lender.
- The local government adds the assessment to the tax rolls.
- The building owner pays the assessment for up to 20 years.
What are the Benefits of Minnesota PACE Financing?
- Commercial property owners are able to invest in energy efficiency projects and solar or renewable energy upgrades with no upfront costs.
- Utility savings exceed payment obligations, making investments cash positive for commercial property owners and tenants.
- Payments are rolled into a special tax assessment made payable twice per year as part of the building owner’s property taxes; the first payment is due in May of the following year.
- The program is tax neutral with no financial exposure to cities or counties.
- Energy improving investments promote local jobs.