Property Assessed Clean Energy (PACE) is an innovative finance solution for building owners interested in energy efficiency and renewable energy upgrades. The PACE structure overcomes financial challenges that hinder the adoption of such projects by eliminating upfront costs, providing low-cost, long-term financing and making it easy for building owners to transfer payment obligations to tenants, as well as new owners, in the case of sale.
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 the financial burden.
Commercial properties must be located in a Minnesota city, county or town that has entered into, or will enter into, a MinnPACE Joint Powers Agreement. Property owners may be associations, business entities, farm operations, cooperatives, or any other business payment property taxes. Nonprofit organizations may also leverage the program. Multifamily housing properties must have more than four units. MinnPACE financing is limited to 20 percent of the assessed or appraised value of the property.
Qualifying businesses must also meet the following criteria:
- No “Mechanics” or similar liens against the property
- Current on all taxes
- Current on mortgage payment(s)
- Not involved in any bankruptcy proceedings
The following costs may be rolled into the MinnPACE agreement:
- Energy audits/renewable energy studies (REQUIRED)
- Equipment costs
- Installation costs
- Energy Evaluations
- Design, drafting, engineering, labor costs
- Permit fees
- Inspection charges
Self-installation costs do not qualify, and costs must be considered reasonable. MinnPACE evaluates costs on a case-by-case basis and may require additional bids to validate reasonability.
MinnPACE can be used to finance retrofit equipment and energy-saving equipment associated with new construction. Qualifying equipment types generally fall under one of two categories: energy-efficiency and renewable energy.
Common energy-efficiency upgrades include but not limited to:
- HVAC Systems
- Building Envelope
- Energy Management Systems
Qualifying renewable energy sources include: