The ongoing research on Property Assessed Clean Energy (PACE) bonds is shedding light on energy efficiency financing in California. PACE, a program that allows local governments to borrow for energy efficiency upgrades, has been recently authorized for commercial properties in New Jersey but is yet to launch there. The focus of the study remains on California, where this financing mechanism first began.
Data from the California State Treasurer’s Office and the California Debt and Investment Advisory Commission’s (CDIAC) Debt Watch platform have identified approximately 9,000 PACE bond issues. These records include information such as issuance dates, issuing governments, borrowing costs, and other relevant details. Typically, each bond issue aggregates multiple borrowers due to the administrative costs involved in issuing municipal debt.
Commercial PACE borrowing started in 2014 with 176 issues amounting to $767 million by the end of 2021. The annual borrowed amounts increased consistently over this period, peaking at $337 million in 2021. Bond sizes varied significantly from $15,878 to $42.5 million, with an average borrowing amount of about $4.4 million per issue.
Residential PACE bonds were introduced earlier in 2009 and have seen around 7,200 issues through 2021 at an average of 550 per year. Residential property owners borrowed a total of $5.4 billion during this time frame.
The research team is now focused on extracting detailed data from accompanying documents using automated processes involving Python programming and statistical software. This effort has so far yielded information on 15,750 individual loans with values ranging from $254 to a maximum of $482,400 and averaging $34,500.
