In September, 2011, Northampton City Council adopted an ordinance to enable the city government to establish a Property Assessed Clean Energy (PACE) financing program for the city. To-date, Northampton is the only Massachusetts community to have done so.
Clean Energy Financing for Northampton’s Multifamily & Commercial Property Owners
In July 2010, Massachusetts enabled municipalities to establish Property Assessed Clean Energy (PACE) programs as an alternative means for homeowners and businesses to finance energy efficiency and renewable energy improvements to private property.
PACE financing lets property owners use future energy savings to pay for current building improvements (e.g., upgraded insulation, sealing air leaks, or energy efficient boilers) that lead to those savings and automatically transfers the repayment obligation to the next property owner if the property is sold.
Northampton PACE Program
A Northampton PACE program will, initially, provide long-term financing (up to 20-years) to multifamily and commercial property owners to install energy efficiency and/or clean energy improvements that are repaid through an assessment on their property taxes.
A federal policy ruling has paused PACE programs for most residential home mortgage holders. Due to this, Northampton will focus the design of an initial PACE program for multifamily and commercial properties. There is currently a second bill on PACE financing working its way through the state legislative process that will, if enacted, make it far easier for Massachusetts cities and towns to implement a PACE program for commercial properties. Visit the PACE website to learn more about PACE Financing and the PACE Ordinance.
Benefits of PACE to Northampton Multifamily & Commercial Property Owners
- Reduces Lost Capital - Money wasted on excessive energy use is instead used to pay for building improvements.
- No Upfront Cost - No money down financing. Please note that PACE can be coupled with utility rebates to reduce costs needing to be financed.
- Improved Cash Flow - More money in your pocket at the end of each year. PACE’s 20 year finance option enables annual energy savings from building improvements, to exceed annual assessment payments.
- Low-Risk Investment - No need to worry about owning the property long enough to recoup your investment. Upon sale, the payment obligation passes on to the next owner, as do the efficiency savings.
- Increased Customer Comfort - Energy efficient buildings are more comfortable for staff and customers.
- Ability to Market “Green” Business - Owner can increase how “green” a building is by accessing 20-years of energy savings to fund building efficiency improvements now.