Commercial Building Energy Retrofits: PACE Financing Could Help Unlock a $12 Billion Annual Market
Energy efficiency retrofits in existing commercial buildings help the environment, communities, and building owners and occupants. A robust market for such retrofits would create $12 billion in business annually over the next decade, while producing energy savings of 22 percent, creating 240,000 new jobs, and avoiding 128 million metric tons of CO2 emissions – roughly the annual emissions from 28 coal-fired power plants. For building owners, the benefits include increased net cash flow and a property with greater appeal to tenants seeking green space.
A concept called property assessed clean energy (PACE) financing removes barriers to existing-building retrofits – chiefly difficulty in securing capital for the up-front costs. Twenty-five states in the U.S. now enable PACE financing, and similar models are gaining acceptance in other countries.
Despite the promise of PACE to mobilize commercial retrofits, the model is still in its early stages. This paper highlights the experience of leading commercial PACE programs and focuses on best practices that reduce risk to building owners and to commercial mortgage holders, helping to free up capital for retrofits.
Policymakers will also find advice on how they can launch PACE programs and similar financing initiatives to achieve significant economic and environmental benefits in their localities.
Download the complete report in the Resources section below.