Many States, HVAC Contractors not Keeping PACE

March 10, 2015
Recently, I received a phone call from a former colleague who now lives and works in Pennsylvania. He wanted to discuss financing options for the retrofit of a large chiller plant.

Recently, I received a phone call from a former colleague who now lives and works in Pennsylvania. He wanted to discuss financing options for the retrofit of a large chiller plant. One of the programs we discussed was Property Assessed Clean Energy, or PACE, and I was surprised (and dismayed) to learn the Pennsylvania legislature has not passed PACE-enabling legislation. The good news is that PACE is enabled in 31 other states and the District of Columbia.

PACE is a unique means of financing energy-efficiency and/or water-conservation improvements, including renewable-energy projects, for residential and commercial properties. Here in Florida, it also covers wind-resistance (i.e., hurricane hardening) projects. What makes PACE unique is that the financing is provided by a local governmental taxing authority—generally through private lenders/bonds—and is repaid as a non-ad valorem tax assessment. The program can finance 100 percent of qualifying improvements with a repayment term of up to 20 years. And because it’s repaid as a property tax, the loan is tied to the building and not the owner. It essentially is off-book financing for the owner, with no requirement for personal guarantees or evidence of individual credit-worthiness. The property cannot, of course, have delinquent taxes or mortgage payments. The advantages to the owner are obvious, and the local government generally has no liability or expense in the process.

Because a HVAC retrofit that sees old, inefficient equipment replaced with newer, high-efficiency equipment is a qualifying improvement under PACE, one would expect the HVAC industry—especially contractors—to actively promote PACE programs. And yet where I live, the existing PACE program has a shortage of registered A/C contractors—they have plenty of roofing and lighting contractors in the program—and a backlog of projects, mostly residential. The PACE program person with whom I spoke blamed it on contractors being too busy, but I think it’s more than that. I think it’s a lack of education, both of our industry and of the public. A good example is a contractor I called. He had heard of PACE, but didn’t really understand it. Presumably, if his customers were asking him upfront about PACE participation, he would have already been onboard. Unfortunately, I don’t believe most of his customers or prospects have heard about PACE, in spite of the fact that here in Florida we have at least five active programs throughout the state.

For the 19 states that have not yet enabled the program, our industry—along with the lighting industry—should be at the forefront of support for PACE. And for the contractors in the states that have a program, they should be actively promoting PACE and helping their customers take advantage of this simple means to achieving more efficient buildings. Maybe it would be a good topic for presentations at local ASHRAE, Mechanical Contractors Association of America/ Mechanical Service Contractors of America meetings.

To learn more about PACE, go to

About the Author

Larry Clark

A member of HPAC Engineering’s Editorial Advisory Board, Lawrence (Larry) Clark, QCxP, GGP, LEED AP+, is principal of Sustainable Performance Solutions LLC, a South Florida-based engineering firm focused on energy and sustainability consulting. He has more than two dozen published articles on HVAC- and energy-related topics to his credit and frequently lectures on green-building best practices, central-energy-plant optimization, and demand-controlled ventilation.