Electrification Boost

Getting a PACE loan to pay for carbon-reduction projects just got a little easier.

PACE, shorthand for Property Assessed Clean Energy, allows a building to pay for an energy-saving retrofit over the course of its useful life — about 20 years for solar panels, for instance. But instead of repaying the lender directly, the borrower amortizes the debt through a yearly charge on its property tax bill. There is no upfront cost to the co-op. 

Under new guidance released by the New York State Energy Research and Development Authority, three types of projects are now “pre-qualified” for PACE loans, meaning they are deemed cost-effective without having to go through the rigorous savings-to-investment ratio calculation. This will make PACE loans easier to obtain for electric heating, ventilation and cooling systems; electric domestic hot water systems; and electric energy recovery ventilators.

There are more than a dozen approved PACE lenders in New York City, and minimum loan amounts range from $500,000 to $5 million. Kyle Madden-Peister, a senior legal associate with the New York City Energy Efficiency Corp. (NYCEEC), which is administering PACE loans, says NYCEEC will work with qualified lenders to review loan applications, and then with the lender, the borrower and the city to close the loans. “Ultimately, it’s always up to the lender to make the loan, but we help shepherd the project along,” he says. “Hopefully this will be the catalyst for electrification projects and for PACE to finance them.”