The Property Assessment Clean Energy Act (PACE)

Missouri's House of Representatives just passed the Property Assessment Clean Energy Act, known as PACE. So what does this mean for you and your home or commercial property?

Let's start with what the bill specifically provides for. The bill initially authorizes municipalities to establish "clean energy development boards" that will be charged with establishing "property assessed clean energy programs" within their communities. These programs will finance energy efficiency or renewable energy improvement projects. Interested property owners will have to apply to the board, to have their project financed through a special annual assessment levied against their property tax bill. The property owner will enter into a contract with the board, in order to gain financing for the cost of their project, and will require a lien against the property being assessed.

So, again, what does this mean for you? It means that you will be able to finance energy efficiency improvements to your home, over a 20 year term with annual payments made with your property taxes. The PACE program will finally make energy efficiency upgrades available to the masses. With 20-year financing available, homeowners can more than pay for the improvements with the savings created from lowered utility bills. Most weatherization and energy efficiency upgrades offer financial paybacks between 2 and 15 years, so you can see how powerful this program will be in saving Missouri residents money, lowering our energy usage, and creating more comfortable homes!

Let's look at an example for a homeowner with a 1,500 square foot house that currently pays $300 per month in heating and cooling bills. Let's assume that they have an energy audit conducted for $500, and subsequently invest in $4,000 of energy efficiency improvements. The total amount assessed and financed through PACE will be $4,500 over a time period of 20 years. Let's assume that the interest rate on this financing is 8%. Under this scenario, you would pay approximately $458 annually for twenty years.

For a typical house of this size, it could be reasonably expected that the improvements would yield 20% energy savings. In other words, this homeowner would save $60 per month or $720 per year on their energy bills. Comparing this with the cost of their financing, the homeowner would profit $262 annually. Not to mention living more comfortably and reducing their carbon footprint!

As more details become available on the specifics of the PACE program in Missouri and St. Louis, Green Space will keep you up to date. For more information on the PACE program, please visit www.pacenow.org.

Green Space Construction Co. is a general contractor and energy efficiency firm in St. Louis with a focus on green building and renovations, weatherization, energy efficiency improvements, as well as traditional building practices. Our core values are composed of eco-friendly building, superior craftsmanship, and dedication to excellent customer satisfaction. Visit our website at GreenSpaceConstruct.com.