Even people who don’t believe in climate change would probably acknowledge that improving the world’s energy efficiency makes sense. Using less power saves money and reduces pollution–and, in many cases, the investments are easy. Years of upgrades show that property owners usually make their money back within a few years.
A report last year by Deutsche Bank Climate Change Advisors and the Rockefeller Foundation found that investing $279 billion in energy-efficiency retrofits across the country would produce a return of more than $1 trillion. The problem is unlocking the investment in the first place. What’s needed, the report said, is new types of finance models that knock down the initial barriers.
According to Richard Branson, the British entrepreneur, that model is something called Property Assessed Clean Energy. PACE allows property owners to get funding for retrofits and not pay a cent upfront. They can put in energy-efficiency upgrades (or anti-hurricane measures and renewable energy systems) and then pay back the sum through their property tax bill over 20 years. The amount they save hopefully will be more than what they must pay over that time.
“Energy-efficiency upgrades haven’t been taken up more widely because the property owner has had to bear the full burden of upfront cost and associated financial risk,” Branson told Co.Exist in an email. “The PACE model turns all this upside down. By providing 100% financing, no upfront costs, and long-term, nonrecourse pay-back, it creates immediate financial incentives for property owners to upgrade their building today.” Read more.