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MassDevelopment

Property Assessed Clean Energy (PACE)

PACE Massachusetts is Now Open

On July 28, 2020, MassDevelopment and the Massachusetts Department of Energy Resources announced that financing is now available through Property Assessed Clean Energy (PACE) Massachusetts for energy improvements on commercial and industrial buildings, multifamily properties with five or more units, and buildings owned by nonprofits. The first PACE Massachusetts project was financed in Greenfield on September 7, 2021. 

Program Overview

To finance energy improvements through PACE Massachusetts, a property owner agrees to a betterment assessment and lien on their property, which repays the financing. This approach enables owners to undertake more comprehensive energy upgrades with longer payback periods of up to 20 years. At property sale, the assessment stays with the property and is transferred to subsequent property owners.

Program Background

PACE Massachusetts was created through energy legislation signed by Governor Baker. MassDevelopment administers the program in consultation with the Massachusetts Department of Energy Resources (DOER). Parties interested in accessing PACE Massachusetts should carefully review the program guidelines and are urged to contact MassDevelopment staff to discuss any potential financing(s) before submitting an application.

Click here to view the PACE Massachusetts Guidelines

Individual Appendices and Documentation included in Guidelines


PACE Process and Eligibility

  • Individual municipalities may opt into PACE by a majority vote of the city or town council or the board of selectmen, as appropriate.
    • Forty-eight Massachusetts municipalities have opted in to PACE Massachusetts (as of September 28, 2021):

      Acton Agawam Amesbury Amherst Barnstable Bellingham
      Beverly Boston Brockton Chelsea Chicopee Concord
      Devens East Longmeadow Easthampton Easton Erving Fall River
      Fitchburg Franklin Gardner Gloucester Greenfield Holyoke
      Lanesborough Lexington Ludlow Milton Montague New Bedford
      North Adams North Andover Northampton Norwood Orange Pittsfield
      Plymouth Randolph Rockland Salem Somerville Springfield
      Taunton Wakefield Wellfleet Wendell West Springfield Yarmouth

      For more information on starting the municipal opt-in process and to obtain a copy of the PACE resolution model, please email us at: pace@massdevelopment.com.

  • Properties eligible for financing through PACE include:
    • Commercial buildings
    • Industrial buildings
    • Multi-family buildings with five or more units
    • Buildings owned by a nonprofit organization
  • Improvements eligible for financing through PACE must be permanently fixed to the property. Eligible improvements include:
    • Energy efficiency upgrades
    • Renewable energy
    • Extension of existing natural gas distribution to a property 

Benefits of PACE

  • Property owners: Advantageous, non-recourse, upfront, long term, potentially off balance sheet financing that remains with the property if sold. Capital improvements could reduce operating costs and increase property values.
  • Municipalities: Job creation, business growth, and environmental benefits associated with reducing energy consumption. 
  • Capital providers/Mortgage holders: Improved cash flow and reduced credit risk from lower operating costs via financing that cannot be accelerated. Capital improvements could also increase collateral property value.

Financing Information and Capital Provider Registry

PACE Massachusetts employs an open market, third party direct financing model that provides property owners the power to choose who will fund their project. It allows multiple capital providers to operate within the PACE Massachusetts program and allows property owners access to the different sources of funds that are available in the commercial PACE market.

PACE Massachusetts requires capital providers to register with MassDevelopment before financing PACE projects in Massachusetts. Entities interested in becoming a PACE Massachusetts registered capital provider should respond to the open Request for Information (RFI) for PACE Massachusetts capital providers. If a capital provider provides the required RFI information, they may be registered as an interested PACE Massachusetts capital provider. Registered capital providers may receive information regarding PACE Massachusetts project financing opportunities from property owners or MassDevelopment. Property owners may access a central registry of potential capital providers. The list of registered capital providers is maintained by MassDevelopment and available upon request to a property owner pursuing PACE financing.

Please note MassDevelopment makes no assurances or certifications about registered capital providers.

Click here to view and download the Capital Provider Request for Information

 

Application Information

In order to be approved for PACE Massachusetts financing, an interested property owner must submit a completed PACE Massachusetts project application (see PACE Massachusetts Guidelines: Appendix A) with a $250 fee to MassDevelopment. The application requires basic information about the proposed project in order to confirm the eligibility of a particular property/project for participation in PACE Massachusetts. We strongly encourage participants to contact MassDevelopment before submitting a PACE Massachusetts application. Property owners may select and begin working with a Capital provider at any point in their energy project development or the application process.

Apply for PACE Massachusetts financing

Click here to view and download the PACE Massachusetts Project Developer Affidavit

 

Savings to Investment Test

To qualify for PACE Massachusetts financing, PACE projects must meet the savings to investment ratio (SIR) test, as described in the guidelines (see Appendix B: Technical Guidelines, Section D). This means that the energy cost savings from the Energy Consumption Reduction or Renewable Energy Improvements must exceed the costs of the improvements over the life of the measures, including any financing costs and associated fees. For gas line extensions, energy costs and savings from Energy Consumption Reduction Improvements such as heating equipment upgrades will be considered in the SIR test and savings must exceed the total costs of the Energy Consumption Reduction Improvements and Gas Line Extension combined.

PACE Application - Supporting Technical Documentation

Click here to view and download the SIR test (Updated 4/30/21: Version 4)

 

For more general program information and inquiries, contact:

pace@massdevelopment.com

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