Two recently passed bills will make Michigan's Property Assessed Clean Energy (PACE) program more accessible to Michigan business owners.
PACE is a long-term financing tool for commercial property owners to pay for energy efficiency, water efficiency, and renewable energy upgrades. Property owners receive 100% upfront funding for their facility's energy efficiency upgrades and repay the PACE loan through a special assessment on their property taxes. Virtually any energy efficiency, water efficiency, or renewable energy project is eligible for the program.
The updated program gives property owners more freedom to decide how much protection they need. For renovation or restoration projects, the bill provides the option to waive the energy savings guarantee, and for new construction, the energy savings guarantee is no longer required. Previously, for projects costing more than $250,000, contractors were required to guarantee that the total savings derived from a PACE project would exceed the amount of their investment.
Additionally, new construction projects will be required to be built to standards that exceed Michigan's energy standards.
Second, the PACE program would be expanded to provide funding for environmentally hazardous projects, such as:
Mitigating lead, heavy metal, or PFAS contamination in drinking water systems. Mitigating lead paint contamination. Mitigating the effects of floods and droughts. Improving the resilience of assets to severe weather.
The PACE program offers long-term financing with fixed interest rates for 10 to 25 years. The loan is attached to the land, so the loan is attached to the property, not the property owner. It does not affect your credit and is transferred upon sale.
The projects covered are:
Properties with high utilities – Properties with utility bills exceeding $5,000 per month. Large projects – Energy projects must cost at least $100,000, but there is no official cap. Properties worth more than $400,000. Properties that are not delinquent on their property taxes and other property tax obligations.
The Macomb County Planning and Economic Development Department (MCPED) has helped approximately six dozen commercial property owners apply for and receive PACE funds over the past five years. If you are interested in improving the efficiency of your property, please contact Curt Chowanic at the MCPED office at curt.chowanic@macombgov.org or call 586-242-3643.