SAN DIEGO—Figtree Financing, a leading provider of Property Assessed Clean Energy (PACE) financing, issued its third bond on October 22, 2013. This issue comes just more than three months after having funded improvements to seven California properties in a prior bond issue. The latest bond, with a value of $478,100, includes four California projects in the cities of Chico, Bakersfield, and Palm Springs, bringing the total value of commercial PACE projects financed by Figtree to more than $2 million.
This bond funded solar and cool roof improvements to two retail shopping facilities, a commercial warehouse, and a hotel. Ryan Ahearn, VP of Marketing for Figtree Financing, highlighted that “this bond issue is proof that we are seeing increased demand for commercial PACE financing from a variety of property types and that Figtree is now able to fund projects much more quickly than in the past.”
PACE’s unique financing enables a variety of improvements, particularly those that have a long useful life and benefit from a long-term amortization like solar, HVAC and cool roofing. “The solar project utilizing PACE financing in Chico is worth an estimated $140,000 to the property owner with no money down,” said Paul Sullivan, Sales Manager for Alternative Energy Systems, the contractor for this project. “Over time, the annual energy savings are projected to exceed the amount of the PACE payment. Energy savings, rebates, and tax incentives also help to make solar projects’ cash flow and net present value positive from the onset. We expect to see a growing number of projects financed with Figtree PACE in the coming year.”
Helps Accelerate Adoption of Solar
Adoption of solar technology is accelerating via PACE financing; 39 percent of the projects financed via commercial PACE include solar and the remaining 61 percent are energy efficiency improvements such as HVAC and cool roofing according to PACENow.org. “For every $1 million spent on solar and energy efficiency, an estimated 20 jobs are created, according to construction industry multipliers from the Bureau of Economic Analysis,” said David Gabrielson, Executive Director of PACENow.org. “With over $43 million in projects financed via Commercial PACE nationwide, an estimated 860 jobs have been created around the country, and this is just the beginning.”
“The County of Butte adopted the program in March 2013 with the City of Chico, City of Oroville, and Town of Paradise following in June,” said Jennifer Macarthy, Economic and Community Development Manager of the County of Butte. “This program is an excellent economic development tool, supporting local businesses, property owners, and contractors. We are pleased already to be experiencing the benefits of Figtree PACE with the recently funded project in Chico.”
Figtree is utilizing its statewide network of assessment districts created by the California Enterprise Development Authority to issue its multi-jurisdictional bonds. The program structure makes adoption of Figtree PACE efficient and easy for additional local government agencies that want to make energy improvement financing available to local property owners. The geographic footprint of the Figtree PACE program, as measured by commercial property value, has grown 401 percent in the last 12 months. Figtree PACE is quickly becoming the kind of economic engine that local governments envisioned for PACE financing when enabling legislation was passed in 2008. Figtree is now active in 46 cities and counties in California and has recently been adopted by the Cities of Hermosa Beach, Anaheim, and Rolling Hills.
PACE (Property Assessed Clean Energy) is a new form of financing that provides property owners with upfront capital to improve their properties with energy efficiency, renewable energy and water conservation upgrades based on property values—up to 20 percent of a property’s assessed value. Figtree PACE financing is available for commercial, industrial, office, retail, multi-family properties of five or more units and limited residential in some areas. PACE requires no money down and provides for attractive financing that doesn’t impact a property owner’s credit score or capacity to borrow for other business needs.
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