Renewable energy, solar in particular, has enormous potential in Los Angeles County. However, there are barriers preventing property owners from moving forward with their solar projects. Commercial PACE may be the solution in resolving these market barriers:
Barrier: Lack of access to capital
Resolution: Unlike traditional financing, qualification for Commercial PACE financing is based on the property value, not the business' credit. As a
more property owners qualify for Commercial PACE, especially non-profits.
Barrier: Split-incentive issue (investment made by the owner, but the financial benefits accrue to the tenants)
The cost of Commercial PACE financing, and the benefits generated can be shared with tenant under more lease forms.
Barrier: Return on investment
Commercial PACE allows financing projects over a longer term, making more projects cash flow positive. Lower rates may also be available because PACE assessments are more secure than traditional loans.