Financial Considerations

Cash Flow Design

PACE financing changes the ballgame!  Previous investments in energy efficiency factored in payback.  Now, you are cash flow positive from the beginning as we offer 100% financing.  From the onset, you will be cash flow positive as savings fully offset the cost of financing.  An improved cash flow position will generally grow over time as energy rates rise and, when the PACE assessment is paid off, your well maintained equipment will continue to produce savings for years to come.

P&L Statement

Do not forget to look at the line items that you have previously used for Repairs and Maintenance on your existing equipment.  With new equipment, your NOI will increase as less is spent on costly repairs of your aged equipment.

Accounting Treatments

  • Depreciation – Certain improvements will qualify for accelerated depreciation.
  • Investment Tax Credits – Many renewable energy measures qualify for investment tax credits.
  • Rebates – Income from rebates issued by utilities, state agencies, and others is typically taxable.
  • Interest Deduction – A schedule of payments allocated between principal and interest will be provided by 360 PACE Lending at disbursement.

Income – Excess Energy

If you will be financing renewable energy upgrades, do not overlook the income generated from selling excess capacity back to your local utility provider.  Selling back to the grid during peak hours offers an additional and enhanced revenue stream.

Note:  360 PACE Lending cannot provide official accounting guidance, please consult your Certified Public Accountant or tax advisor.

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