What is OHIO PACE?
OHIO PACE financing is an economic development tool designed to assist commercial and industrial building owners to access affordable, long-term financing for energy improvements to their buildings.
PACE allows building owners to finance their energy improvements through a voluntary special assessment added to the property’s tax bill. The repayment obligation transfers automatically to the next owner if the property is sold. Capital is secured by a priority lien on the property, so long-term debt capital can be raised from the private sector.
How OHIO PACE Works
PACE uses the same kind of land‐secured financing districts that cities and towns have used for over 100 years to pay for improvements in the public interest.
Special Improvement Districts or SIDs, have helped communities finance everything from sidewalks to hospitals. As a result of legislation passed by the State of Ohio in 2010, building owners seeking to make energy efficiency and renewable energy improvements can now use this financing model through the creation of an Energy SID.
PACE programs are implemented locally and are entirely voluntary. Most PACE programs will share the following basic features:
- Local governments establish a PACE special assessment district.
- Property owners voluntarily choose to participate; those who choose not to participate see no change to their property assessments.
- Participants agree to accept a property assessment for 15 to 30 years.
- An experienced contractor assesses desired improvements, validating energy savings.
- Debt capital is raised, often by the sale of bonds through a local financing authority, secured by a senior lien on the property, and serviced through assessment payments made from the participating property owner.