Skip links

Washington, DC Signs Its First Major PACE Deal for Efficiency and Solar

Late last week, the District of Columbia made a historic announcement of its first-ever financing of a property-assessed clean energy (PACE) commercial energy upgrade project.

The DC PACE Commercial program provided financing for a $340,000 investment in an affordable multifamily housing complex in southeast Washington, D.C. The project included a suite of energy efficiency and clean energy improvements, including lighting, water conservation, and installation of solar panels for a combined 15 percent reduction in energy use. The project is projected to generate about $40,000 per year in ongoing tax credits and avoided energy expenditures.

PACE allows investments in efficiency and renewables to be paid back through a special tax levied on the property. This avoids the classic “split incentives” problem, where building owners are hesitant to make capital investments out of pocket even though they have a good financial return, simply because they may not still own the building in five years. PACE attaches the debt to pay for the building improvements to the title of the property — not the credit of the borrower — thereby lowering risk for the owner even as it offers excellent security for lenders. Read more.