Division of Energy
Property Assessed Clean Energy (PACE)
Property Assessed Clean Energy or PACE programs, allow local government entities to raise money through the issuance of bonds or other sources of capital to fund energy efficiency and renewable energy projects to eligible property owners. Through the creation of financing districts, property owners can finance renewable onsite generation installations and energy efficiency improvements through a voluntary assessment on their property tax bills that is repaid over a period up to 20 years.
This voluntary assessment is secured by a senior lien on the property and does not require upfront payment. The lien provides debt collateral in the event a property owner defaults on the assessment. In most cases, the assessment and the lien are transferred upon sale.
Missouri Property Assessed Clean Energy
Missouri enacted PACE legislation in 2010 (HB 1692) that authorizes the formation of clean energy development boards by one or more municipalities for the purpose of establishing PACE programs (Sections 67.2800 – 67.2835, RSMo). Municipalities are defined as counties, cities or incorporated towns or villages in Missouri. Boards will establish application requirements and criteria for project approval, evaluate proposed projects and the credit-worthiness of property owners, enter into assessment contracts and administer the loans or use third party providers for financing origination.
The Missouri PACE legislation allows PACE to be used for energy efficiency improvements and renewable energy improvements. Energy efficiency improvements include any acquisition, installation or modification on or of publicly- or privately-owned property designed to reduce the energy consumption of such property, including, but not limited to:
- Insulation in walls, roofs, attics, floors, foundations, and heating and cooling distribution systems;
- Storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective windows and doors, and other window and door improvements designed to reduce energy consumption;
- Automatic energy control systems;
- Heating, ventilating, or air conditioning distribution system modifications and replacements;
- Caulking and weatherstripping;
- Replacement or modification of lighting fixtures to increase energy efficiency of the lighting system without increasing the overall illumination of the building unless the increase in illumination is necessary to conform to applicable state or local building codes;
- Energy recovery systems; and
- Daylighting systems.
Renewable energy improvements include any acquisition and installation of a fixture, product, system, device, or combination thereof on publicly- or privately-owned property that produces energy from renewable resources, including, but not limited to photovoltaic systems, solar thermal systems, wind systems, biomass systems, or geothermal systems.
In January 2011 Jefferson City formed the first local PACE clean energy development board in Missouri --- the Mid-Missouri Clean Energy Development Board. It has contracted with the Missouri Clean Energy Fund LLC as its PACE Administrator (http://www.mocefllc.com/). Missouri counties, cities and incorporated towns and villages have the opportunity to join Missouri’s Clean Energy District. There is additional information on its website that details program eligibility due to participating municipalities, costs to participate and limitations -- http://www.mocefllc.com/index.php?p=2_19. Eligible properties and projects include:
- Public Facilities
Other jurisdictions are also considering PACE programs. Additional information about the development of Missouri PACE programs will be posted as it becomes available.
Note that funding for residential properties is not available at this time. Due to the Federal Housing Financing Agency (FHFA) position statement in July 2010 concerning the senior lien status associated with most PACE programs, many local PACE programs across the country have been suspended or not moved forward in offering services for the residential sector, until further clarification is provided. This issue continues to be discussed in Washington DC.