Statute: § 67.2800 – § 67.2835, RSMo.
Property Assessed Clean Energy (“PACE”) is a financing tool that allows property owners (both commercial and residential) to invest in energy efficiency and renewable energy improvements to their properties, at no up-front cost. PACE involves the local government’s tax authority, which issues special bonds to finance the energy upgrades and then collects repayment through a special assessment on the building’s property taxes. 18 states have passed PACE-enabling legislation, including Missouri!
In Missouri, energy improvements under PACE must be “cashflow positive,” in that the economic benefit of the project must outweigh the costs. Typically, this means that the property owner gets the savings from the energy improvements faster than he or she pays back the loan through property taxes. Energy efficiency financing is unique in this aspect, and it’s what makes PACE work.
Missouri’s PACE statute allows the creation of special Clean Energy Development Boards, or PACE districts. These PACE districts can sign up counties and municipalities to participate through the districts’ particular financing arrangements. Missouri currently has three PACE districts. Check below to see if your city or county offers PACE financing!
Missouri PACE Districts
The Missouri Clean Energy District (MCED) is the largest and longest-running PACE district in Missouri, and it is the only district currently offering a full PACE financing program for homeowners. The program does benefit from governmental oversight by virtue of a Board of Directors and an Advisory Council selected by the member communities. Through the advantages of public-private partnerships, the District’s mission of delivering a market based offering that realizes the public purpose of improving the state’s energy footprint and quality of the built environment is at hand. *Note: The MCED is now eligible for PACE participation in Boone county.*
Click here to view the cities and counties who are members of MCED.
MCED is now offering the HERO (Home Energy Renovation Opportunity) Program. HERO provides an affordable financing option for energy-efficient and renewable energy upgrades, which help homeowners increase efficiency, comfort and savings. While the program name implies financing for home renovations, most property types, including commercial properties, are eligible.
Show Me PACE promotes economic development through open-market financing for energy efficiency, water conservation and renewable energy projects. Show Me PACE works with multiple lenders to provide on-demand cash for PACE projects. Show Me PACE is committed to serving all Missouri sectors, including commercial, industrial, agricultural, nonprofit, multifamily and institutional. Show Me PACE requires consent from mortgage lenders and uses a third-party collector to collect the annual PACE assessments. With the nonprofit Missouri Energy Initiative* as its administrator, Show Me PACE has low, nonprofit-based fees. *Note: Show Me PACE is now eligible to offer PACE loans in Boone county.*
*The Missouri Energy Initiative (MEI) is a Missouri-based 501(c)3 nonpartisan nonprofit association of public and private sector energy entities working to increase support for energy related economic development, education, research and policy solutions.
Click here to view the jurisdictions who are members of Show Me PACE.
The City of St. Louis is currently offering limited PACE financing for businesses to pursue clean energy property upgrades. As part of the City’s sustainability plan, Set the PACE St. Louis enables residential and commercial property owners to finance energy efficiency, water efficiency and renewable energy upgrades with a novel funding mechanism that offers distinct advantages over traditional equity loans (see FAQ #3). Set the PACE St. Louis is administered by Energy Equity Funding, LLC on behalf of the St. Louis Clean Energy Development Board (CEDB), with project financing provided by financial partners.
Since PACE involves the local tax authority, local governments have to pass a special PACE ordinance or resolution in order for each municipality or county to be able to participate. If you are interested in PACE and your local government is not a member of any of the above PACE districts, please talk to your local City Council members or County Commissioners.
IBEW/NECA are teaming up to help make the historic Missouri Athletic Club a more energy efficient building through the PACE (Property Assessed Clean Energy) program. The $2.4 million project is being financed through Set the Pace St. Louis and is the largest PACE clean energy project in the U.S. in 2015. The St. Louis based Kaemmerlen Electric is managing the electrical upgrades. Kaemmerlen is part of the Electric Connection, a partnership of the International Brotherhood of Electrical Workers (IBEW) Local One and the St. Louis Chapter of the National Electrical Contractor Association. (NECA).
Missouri University of Science and Technology has committed to be a leader in climate action and sustainable solutions by signing the Second Nature Climate Commitment charter. According to Second Nature, the commitment “integrates a goal of carbon neutrality with climate resilience and provides a systems approach to mitigating and adapting to a changing climate.” Signatories commit to exercising “leadership in their communities and throughout society by providing the knowledge, research, practice, and informed graduates to create a positive and sustainable future.”
Truman State University is in the midst of a $10.5 million energy efficiency upgrade that stands to save the University $1 million yearly. As such, the project will have paid for itself in a little more than 10 years, and profit past that point is surplus. The contract with Kansas City-based Energy Solutions Professionals is enabled by PACE to be as affordable as possible while still using top-of-the-line renewable energy technologies.
Missouri Western State University is partnering with Kansas City Power & Light to install new efficient lighting with the help of PACE cost reductions. The university’s total green investment amounts to over $5 million, according to Gentry, with about 75 percent due to the partnership. The university stands to save around $400,000 annually, as well; all of the savings will be returned to pay for ongoing projects.
See this guide on how to implement PACE in Missouri!