PACE Financial Servicing (PFS) along with the Maryland Clean Energy Center (MCEC) announced on August 10th that they would be partnering together to construct a statewide commercial Property Assessed Clean Energy (PACE) Program. PACE is a financing tool with national recognition that seeks to classify clean energy upgrades as a permanent benefit to the public, which are financed with no money down and then repaid as benefit assessments on the property tax bill over period of time up to twenty years.
The goal of PACE programs is to overcome challenges that have obstructed energy efficiency in the past by removing the upfront cost barrier that deters many people from adopting these practices. Maryland passed this policy, allowing PACE programs to enter the state in 2014. However, the law still requires that local ordinances be passed to benefit from PACE financing as property taxes in Maryland are collected at the county and city level. What this means for the state of Maryland is that, even though PACE enabling legislation has been enacted, the programs themselves are still in development and in need of approval at the local level.
The goal of this specific partnership is to form a centralized program that will allow PACE to scale at a faster rate in Maryland through the creation of a streamlined county opt-in, administration, and borrower application process, now in the development stage, specifically for the use of commercial property owners.
To achieve these objectives, MCEC and PFS will collaborate with contractors, building owners, local tax collectors, and PACE lenders. PFS will ultimately handle all administrative duties for the program, including program management and marketing, as well as financial management. PFS acting executive director Jessica Bailey stated "The administrative and programmatic standardization across the MD-PACE market is important to give clear guidance on how PACE in Maryland works to contractors, building owners and lenders. Our partnership with MCEC aims to vastly increase the number of buildings across the state that access clean energy upgrades."
While this partnership offers many environmental benefits for those that partake in it, there are also many economic benefits for participation that will draw commercial property owners in. In a statement made by MCEC Board chairman George Ashton, he asserted that "Being able to offer a statewide PACE financing framework in Maryland will ultimately lead to lower energy costs for property owners, local economic development, and proliferation of clean energy options for the state. By simplifying PACE in Maryland, this partnership will enable commercial property owners to benefit from clean, low-cost energy more quickly and effectively."
MCEC executive director Katherine Magruder commented, "Our partnership with PFS gives us an important new tool in our green bank product line and will better enable MCEC to meet its mandate to promote clean energy, reduce greenhouse gas emissions, and strengthen the Maryland economy." She estimates that there are millions of square feet of commercial space and apartment buildings in Maryland that could benefit financially from energy improvement measures such as this.
PACE Financial Services has seen a great deal of success implementing programs such as this under similar conditions in the past, and has over fifteen years of experience in 25,000 municipalities across the country.