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PACE program expands to help more commercial property owners

Two bills recently signed into law are making Michigan’s Property Assessed Clean Energy (PACE) program more accessible to Michigan’s 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% pre-funding for energy-saving upgrades on their facilities and pay the PACE loan back through a special assessment on their property taxes. Virtually any energy efficiency, water efficiency, or renewable energy project qualifies for the program.

The updated program will give property owners more leeway to decide the amount of protection they need. For retrofits or rehab 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 that would cost more than $250,000, the contractor was required to guarantee that the total savings generated from the PACE project would be greater than the investment.

It will also be required that new construction projects be built above Michigan’s energy code.

Secondly, the PACE program will be expanded to allow for the financing of environmental hazard projects, including:

  • Mitigation of lead, heavy metal, or PFAS contamination in potable water systems.
  • Mitigation of lead paint contamination
  • Mitigation of the effects of floods or drought.
  • Increase the resistance of property against severe weather.

The PACE program provides long-term financing from 10 to 25 years with a fixed interest rate. The loan runs with the land, meaning the loan is attached to the property, not the property owner. It does not impact your credit, and it transfers upon sale.

Projects that qualify include:

  • Those with high utility costs – any properties with a utility spend higher than $5,000 per month.
  • Larger projects – the cost of the energy project should be greater than $100,000, with no formal upward limit.
  • Property worth more than $400,000
  • Properties that are current on their property taxes and any other property tax obligations.

The Macomb County Department of Planning and Economic Development (MCPED) has assisted about one-half dozen commercial property owners apply for and receive PACE funding over the last five years. If you are interested in upgrading the efficiency of your property, please contact Curt Chowanic from our MCPED office at or call 586-242-3643.

Department:Macomb Business