Property Assessed Clean Energy (PACE) programs, originally conceived of in the United States of America, are just beginning to expand worldwide. PACE is an innovative financing mechanism which gives building owners an easier way to upgrade their buildings with energy efficiency measures such as LED lighting and envelope enhancements, or to install renewable energy systems such as solar panels. PACE financing is secured by a lien on the property and repaid through a special tax assessment. Since PACE offers long term financing with no money down and with low fixed interest rates, it is financing that will benefit both your building and your bottom line.
More than just a financing program, PACE is evolving into an robust ecosystem in the USA, where it has already surpassed 6 billion dollars in investments in energy efficiency and renewable energy measures. These projects have improved the environments and economies of the jurisdictions where they have been implemented and are encouraging people to live an eco-friendly lifestyle.
Stakeholders in Canada and Europe, recognizing the benefits of PACE financing, are actively endeavoring to develop strong, effective PACE programs in their respective regions. While there have not yet been many projects outside of the United States, the potential for PACE ecosystem developments in Canada and Europe is encouraging.
Canada’s PACE program development has been slow to evolve, with active programs only available in two provinces, Ontario and Nova Scotia, and with Alberta soon to be added to the list. Recently, PACE Financial Servicing interviewed Brian Scott, Founding Director and Chief Ambassador of PACE Canada, who stated that establishing a healthy PACE ecosystem in Canada has been challenging. He explained that PACE could have a momentous impact if the enabling legislation were amended. Scott went on to state “The PACE ecosystem is like a cooking recipe; the addition of one simple ingredient can transform it from being okay to amazing.” That needed ingredient is a change in legislation to bring it in line with the best practice wording established by experience in the USA. In Alberta, for example, the recently passed PACE legislation requires municipalities to be the source of PACE investment capital, and was structured to have a government created entity (Energy Efficiency Alberta) act as the PACE administrator with its operating funding being supplemented through a carbon tax. The carbon tax was subsequently rescinded after a change in government, putting the designated PACE administrator’s viability and even existence into question.
Alberta’s challenges are not unique. According to Scott, due to similar PACE legislative restrictions, Canada’s PACE environment is seriously under-performing and likely operating at 80% below its potential. Having identified key perceived legal barriers, Scott and other volunteers are currently working to raise money in order to make the necessary changes which will allow PACE to function at its peak. PACE Canada has high hopes of having a PACE program similar to that of the United States. Those who would like to contribute to their campaign may do so through their fundraiser.
On the other side of the Atlantic, Europe is pursuing its own PACE agenda. Europe has been instrumental in combating climate change. The multitude of policies which have been adapted there is cause for conversation. In 2015, a monumental conference took place in Paris, the Conference of Parties (COP) 21, which led to the signing of the Paris Agreement. This agreement focused on a plan of action to combat climate change and was signed by 174 countries and the EU. Per the EU website, “The EU is actively promoting Europe’s transition to a low-carbon society, and is updating its rules in order to facilitate the necessary private and public investment in the clean energy transition.”
The Paris Agreement provided a call to action for many countries and set Nationally Determined Contributions (NDCs) which set objectives for individual countries to achieve in order to combat climate change, specifically when it comes to reducing greenhouse gas emissions and developing climate-resilient measures. While these measures may seem overwhelming, PACE helps to make clean energy upgrades possible. PACE is another tool by which Europe could one day set the global example in environmentally progressive policies, as PACE provides a way for buildings to reduce their carbon footprint through effective financing.
While Europe has been working to create and implement policies, PACE is a part of their toolbox which could make those policies possible. Kristina Klimovich with EuroPACE shared that “Over the course of 10 years, PACE has proven to be an effective financing instrument in the US. In Europe, we have ambitious climate and energy goals that require upscaling home and commercial building renovation. Adapting PACE to Europe as EuroPACE is an opportunity to bring real benefits to all Europeans.” Klimovich explained that the PACE program is beneficial and will continue to grow as EuroPACE, furthering its positive effects into Spain and Europe.
The potential for PACE to have a positive impact in Europe and Canada is unlimited and will help to progress the reduction of their carbon footprint and greenhouse gases. The combined efforts of the PACE programs in the United States, Canada, and Europe continue to better the environment by creating energy efficient buildings. As demonstrated by the 2018 IPCC Special Report: Global Warming of 1.5°C, it is critical to combat climate change, and PACE is an instrument that can dramatically aid in this endeavor.