PACE

status: draft

Property Assessed Clean Energy. A financing mechanism where property owners fund energy efficiency or renewable energy improvements through a special tax assessment on their property. Repayment is tied to the property, not the borrower, and typically has tax-lien priority.

What to watch

The senior lien position is the key feature and the key controversy. Mortgage lenders often resist PACE because it can prime their security interest. R-PACE (residential) has faced regulatory pushback and litigation; C-PACE (commercial) is more established and less contentious. Check state-specific enabling legislation and consent requirements.