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Financial Incentives For Sustainability: Is Your State Keeping PACE?

Does it sometimes seem like everyone loves your project ideas until you ask for money? To us, it’s like a broken record. “Yes,” we hear from the senior executive, “sustainability is absolutely a core value of our company and institutionalizing it a top priority for our management team.” Two meetings later, however, when even minimal costs are presented to cover the up-front expense of projects, somehow there is “no room in the budget…maybe next year.”

When it comes to financing initiatives, funds may be scarce or, despite their best intentions, executives may not yet ascribe value to these types of projects. Believe it or not, this is not unique to your company. The managers who seem to be making more progress toward their goals to make your company more sustainable are facing the same challenges you are. But, as with many things in life, what separates success from failure is the degree of resourcefulness and creativity applied to the problem.

Ultimately, the best way to get a project approved is to walk into the meeting with the funding question already answered. There are a number of ways to make this happen, but if energy conservation strategies is a focus area for you, one of the very first stops on your journey should always be to research financial incentives for sustainability projects that are available nationwide. A Property Assessed Clean Energy (PACE) program is one such vehicle for funding sustainability projects. This initiative, started in 2008, helps finance energy efficiency and renewable energy upgrades to buildings, both commercially and residentially in 31 states and the District of Columbia.

Here’s how it works:

  • A PACE program is first established by the local government.
  • Eligible property owners can then evaluate ways to reduce their energy costs and receive funding from the local government for these projects.
  • Landlords receive 100% financing up front, which creates jobs, immediate savings, and increases in property value.
  • They then repay the amount as a property tax assessment, for a period of up to 20 years.

In July 2013, an office park in Sacramento, CA took advantage of $3.16 million in funding from one of these programs. This funding allowed Metro Center Corporate Park to make energy efficiency upgrades which will subsequently reduce energy costs by $140,000, a 27% decrease. This energy retrofit not only makes the office park eligible for LEED certification, it is the largest project in the nation, to date, to be funded through a PACE program. Read more about this project here.

This low-cost long-term program enables business leaders to pursue sustainability right now; look into Property Assessed Clean Energy programs nationwide to see what opportunities exist in your community. These programs help companies get moving on energy-related projects, but it is just one example out numerous ways you can jumpstart your initiative. Sustrana has many more suggestions when it comes to finding funding for your green projects. Download our free Sustrana Perspective on this topic: Fueling Your Sustainability Program: Innovative Strategies for Project Funding to learn more!