Environmentally-conscious living (or “green” living if you’re super hip) is a hot-button topic across the country these days and is being embraced by everyone from celebrities to soccer moms. Individuals and even whole cities are switching to clean forms of energy like solar and wind. Instead of changing how they live, many people are changing where they live in order to be green—outfitting their homes with the latest environmentally-friendly technology. Making these changes is by no means cheap. That’s where PACE financing, the fastest-growing form of financing in the country, comes in.

What is PACE and what are its advantages?

PACE stands for Property Assessed Clean Energy, and it’s a means of financing available in many Florida counties (including Marion and Alachua) that helps property owners in residential, commercial, and industrial sectors make environmentally-friendly upgrades. It can also be used to help fortify buildings against natural disasters like hurricanes. PACE programs cover some or all of the upfront costs of energy retrofits for home and business owners, which the property owner then pays back by increasing property taxes at a set rate between 5-25 years.  This allows the property owner the possibility to reap net gains from their energy-saving renovations because they are saving on energy while paying for the upgrades. PACE is especially convenient for cities that desire to implement green initiatives because it is usually funded through private lending, therefore creating no liability to the city’s budget. Also, when local renewable energy companies partner with the program, an area can see a surge in economic growth and job creation. It’s even opt-in, so if a whole city decides to go green, only those property owners who want to participate in the program are responsible for picking up the tab.

What’s the catch?

As good as they sound, and as good as they may be for the environment, PACE financing does contain some pitfalls and drawbacks. Because it is structured as a tax assessment and not a traditional loan, PACE programs in different areas are not obligated to disclose costs to homeowners like lenders are. They can choose to withhold information regarding assessment of affordability, and in such situations homeowners must try to figure out for themselves whether financing is affordable. There have been isolated reports in other states of contractors misleading property owners about the costs of financing. In spite of these incidents, PACE reps insist that the PACE industry, which has its own consumer protections, is safe for property owners.

If you’re a homeowner considering major energy efficiency or eco-friendly upgrades to your property, PACE financing is an option you might want to consider. Be firm about ascertaining an assessment of affordability and double-check the costs of both your upgrades and any financing fees. If you have any doubts or questions about financing upgrades to your home, contact a Showcase agent–we’re here to help!