SETTING THE PACE 2Why Use PACE? 1. 100% funding –No upfront costs 2. Funding for up to 20 years 3. Immediate positive cashflow 4. No payoff on sale –PACE transfers to new owner

1

SETTING THE PACE 2.0

Session Moderator: Katrina Managan, Johnson Controls

Speakers: Kristina Klimovich, PACENow

Kevin Moyer, Toledo-Lucas County Port Authority

Kerry O’Neill, CEFIA

Russell Garcia, Johnson Controls

ACEEE Finance Forum, May 13th, 2014

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What is PACE?

State passes enabling legislation

Local government creates benefit district

Building owner selects projects - voluntary

Mortgage lender gives consent for financing

PACE program arranges or provides financing

PACE assessment added to tax roll

3

Why Use PACE?

1. 100% funding – No upfront costs

2. Funding for up to 20 years

3. Immediate positive cashflow

4. No payoff on sale – PACE transfers to new

owner

5. Possible off-balance-sheet treatment

6. Ability to pass payments through to tenants

4

Project Uses, Sizes and Building Types

44

Renewable Energy

28%

Energy Efficiency

62%

Mixed10%

$0

$20

$40

$60

$80

2009 2010 2011 2012 2013 Mar-2014

25%

6%

15% 13% 3%

4%

4%

8%

22%

Office

Multifamily

Retail

Services

Agriculture

Hotel

Industrial

Other

Government

PACE in 2011

Early stage PACE program development

PACE programs with funded projects

Launched PACE programs

PACE enabled

75 Projects Closed - $10 mil

Early stage PACE program development

PACE Today

218 Projects Closed - $72 mil - Pipeline of $220+ mil

6

PACE programs with funded projects

Launched PACE programs

PACE enabled

7

Featured Programs

8

Best Practices

• Market education and sales support is essential to

generating and originating new projects

• The PACE process must be standardized and streamlined

for many owners

• A project leader should be clearly designated

• Uniformity is important across a service area

• PACE should be incorporated into the existing

commercial real estate ecosystem of lenders and

contractors

• Companies that administer program for municipalities

can work with motivated local building owners to expand

municipal markets

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Remaining Challenges and Unsettled Issues

• Administration costs may influence type of

projects delivered

• New programs need to develop program

materials, but also need to quickly move into

selling and developing actual projects

• Data collection and M&V of savings are

cumbersome, but critical to investor confidence