Property Assessed Clean Energy (PACE) Financing

What is PACE Energy Efficiency and Renewable Energy Financing Private sector buildings Put in place by localities- by ordinance Requires State enabling legislation PACE loan is treated like a tax assessment Started in 2009 in CA PACE laws in 31 states and DC

Why Use PACE 100% funding – No upfront costs Funding for up to 20 years Immediate positive cashflow No payoff on sale – PACE transfers to new owner Possible off-balance-sheet treatment Ability to pass payments through to tenants

PACE in Virginia Law enacted in but flawed Lacks priority lien status PACE Loan requires a lien status equal to tax lien- Treated as voluntary special assessment Virginia PACE Coalition to fix the law Lien status issue Lender consent

Virginia PACE Coalition Trane Boland Siemens ABM CREE Hannon Armstrong S&S Sales HCYU Alt-Energy Urban Ingenuity Renewable Funding Abacus Property Solutions Community Housing Partners Local Energy Alliance Program Virginia Energy Efficiency Council Richmond Region Energy Alliance

PACE Nationally- 2011

PACE Nationally- 2014

Growth of PACE Property Types

Connecticut PACE Program Commercial, industrial & multi-family Requires the consent of the existing mortgage lender Requires SIR>1 Renewable and energy efficiency

Connecticut PACE Program 200+ contractors trained 20 qualified capital providers Closed $30 million in deals -average size $700K Class B buildings $70 million of projects in the pipeline 17 mortgage lenders have provided consent

PACE Deal Snapshot Hilton Hotel Universal City, CA Amount - $7million Term – 20 years Rate – 7% fixed 50% reduction energy usage Energy & water savings - $800,000/yr ROI – 78% Local incentives sweetened the deal

PACE Deal Snapshot Shopping Center, Norwalk, CT Amount - $170,000 Term – 13 years Rate – 4.5% fixed 35,000 SF building Exterior LED Lighting Energy savings - $17,000yr

PACE Deal Snapshot Office Building, Toledo, OH Amount - $1.4 million Term – 15 years Rate – 4.32% fixed 60,000 SF building Cooling tower, lighting upgrade, hot water pump upgrade, building automation controls, new fan motors Estimated energy savings- 48%

Questions