Contractor FAQ

1. What is TX-PACE?

TX-PACE (Texas Property Assessed Clean Energy) is a proven financial tool that enables commercial, industrial, agricultural, nonprofit, and multifamily property owners to upgrade facility infrastructure with little or no upfront capital outlay. The program is designed so that owners lower their operating costs and pay for eligible improvements with the savings generated, taking advantage of affordable, long-term financing.

2. What are the benefits of a contractor utilizing the TX-PACE program?

Contractors will benefit from providing a new offering for customers, increased job creation and retention, and will be able to answer the age-old question, “How are we going to pay for it?” TX-PACE is transforming how contractors look at projects proving that there is a clear path forward for upgrading infrastructures, implementing energy efficiency, distributed generation, and water-use reduction measures.

3. What types of properties are eligible?

  • Office
  • Commercial
  • Industrial/Manufacturing
  • Multifamily housing (5+ units)
  • Hospitality
  • Retail/Restaurant
  • Healthcare
  • Agricultural
  • Nonprofit
  • Houses of Worship
  • Private schools

4. What types of improvements are eligible?

  • HVAC systems and controls
  • Chillers, boilers, and furnaces
  • Water heating systems
  • Energy management systems and controls
  • Lighting systems
  • Building enclosure and envelope improvements
  • Water conservation
  • Wastewater recovery and reuse
  • Combustion and burner systems
  • Heat recovery and steam traps
  • On site power generation (CHP, microgrids, solar, etc.)
  • Water management systems and controls (indoor/ outdoor)
  • Irrigation equipment
  • Rainwater collection systems
  • …and more!

5. Does a contractor need specific licensing or certifications to participate?

Texas PACE Authority (TPA) does not qualify contractors – the Texas program is open-market, which means anyone can participate in TX-PACE. TPA offers service provider training workshops – this is a great place to start. Check out TPA’s Events page, or sign up for the mailing list to be notified of training workshops throughout the state.

Those who attend a service provider training workshop are eligible for a TX-PACE listing on the Texas Green Building Marketplace. To be included in the Marketplace, contact the U.S. Green Building Council Texas Chapter at 512-470-9923 or info@texasgreenbuildingmarketplace.org

6. How long does the TX-PACE application process take?

Once all documents and materials required as part of a TX-PACE project application have been submitted, allow 10 business days for review and evaluation. If approved, Texas PACE Authority will then issue a notice to proceed to closing. The earlier TPA is contacted, the faster it can assist in streamlining the process.

7. Is measurement and verification a requirement for TX-PACE projects?

Property owners are strongly encouraged to address measurement and verification (M&V) in their contracts with engineers and contractors. The Technical Standards Manual requires the contractor to design an M&V program for the property owner’s consideration, but does not mandate that the property owner adopt an ongoing M&V plan. The PACE Act requires that an Independent Third-Party Reviewer (ITPR) review that the energy conservation measure and/or a water conservation measure is installed correctly and operating as intended.

8. Are guaranteed savings a requirement?

Savings guarantees are not required, although they can be offered. The PACE statute requires an independent third-party engineer to review the baseline and savings projections to make sure they are consistent with the Program Guide requirements.

9. What technical requirements are necessary to qualify a project?

In addition to satisfying all underwriting requirements of *PACE in a Box, projects must meet three technical requirements.

  • First, the property’s current water and energy use is measured so that a baseline for comparison is established.
  • Second, each potential energy or water conserving measure is evaluated to determine projected savings compared to the baseline in a technically sound, consistent, and transparent manner. Findings from these two steps together are compiled in a document referred to as an energy /water assessment report. PACE law requires that each report is evaluated by an independent third-party reviewer (ITPR) who is a licensed engineer.
  • Third, after the project retrofit activities are completed, the project must be reviewed by the ITPR to ensure that the project meets the intent of the energy/water assessment report, is properly completed, and is operating as intended. The purpose of performing measurement and verification (M&V) after installation is to validate that the measures are operating as expected and the energy/water savings are being realized. Ongoing M&V is optional, but highly encouraged. Project evaluation by an ITPR provides assurances to the property owner, the capital provider, and the local government that due diligence has been met and that a professional has validated the project using standardized engineering protocols.

*PACE in a Box is a toolkit that enables local governments in Texas to utilize a uniform, turnkey program that provides underwriting and technical standards’ best practices and model documents. The program was designed by over 130 stakeholders and is being utilized throughout the state, and serving as a nationwide model.

10. What is the independent review requirement?

To successfully complete a TX-PACE application, all projects must be accompanied by an audit from an Independent Third-Party Reviewer (ITPR). To be of value, the work of the ITPR must be both professionally qualified and without conflict or relationship to the project they are reviewing. An ITPR must be a licensed Professional Engineer with energy/water efficiency experience. Additionally, the Professional Engineer should have at least one of the following certifications:

  • American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE)
  • Building Energy Assessment Professional (BEAP)
  • Building Energy Modeling Professional
  • Association of Energy Engineers (AEE)
  • Certified Energy Manager (CEM)
  • Certified Measurement and Verification Professional (CMVP)
  • Certified Energy Auditor (CEA)
  • Building Commissioning Association
  • Certified Commissioning Professional
  • Investor Confidence Project
  • Quality Assurance Provider

All projects will be required to follow protocols developed by the Investor Confidence Project (ICP). To this end, we encourage all ITPRs to be credentialed Quality Assurance Providers (QAP) from the ICP. If you would like more information on ICP and becoming a credentialed QAP, please visit: http://www.eeperformance.org/

11. What is the technical analysis required for a PACE project?

We require all projects to show projected savings, as our key metric is in looking at the Savings to Investment Ratio (SIR). Generally, PACE projects require an SIR > 1, meaning that over the life of the project, the savings from the project are greater than the assessment (including financing costs). Our detailed Program Guide can be found here.

12. What are the program rates and fees?

Interest Rate: PACE in Texas is open market, and interest rates are set by the capital provider selected by the owner. Interest rates vary based on things like project size, property and business specifics, and term of the loan. Please contact a PACE Capital Provider to discuss terms.

Texas PACE Authority shall determine the amounts of the uniform application and administration fees to be paid by property owners participating in the program. Such fees will not exceed the amounts below:

  • An application fee of $2,500.00 or 1% of the total amount of the assessment, whichever is greater, to be paid as follows:
    • $500.00 per project at the time of application submittal;
    • the balance of the full remaining application fee at closing; and
  • A recurring administration fee of 0.10% of the outstanding principal balance, which shall be collected by the capital provider and paid to TPA as provided in the owner contract and the financing documents. This fee can also be capitalized and paid at closing. If paid under a negotiated regular schedule to the capital provider by the property owner, the capital provider shall pay this fee to Texas PACE Authority at the time of each payment by the property owner in accordance with the financing documents.

13. Do I need to be able to provide these projects turnkey?

No, there are many available partners that can assist with developing and implementing projects and can help accelerate your project deal flow.

14. Is there contractor training available?

Yes, Texas PACE Authority conducts regular service provider training workshops and can even have someone come to your office to teach your workforce. Check out our Events page and sign up for the TPA distribution list to receive emails of upcoming training events.

Those attending a service provider training workshop are eligible for a PACE listing on the Texas Green Building Marketplace website. If you would like to be included in the Marketplace, please contact the U.S. Green Building Council Texas Chapter at 512-470-9923 or info@texasgreenbuildingmarketplace.org

15. Who can be a TX-PACE capital provider?

PACE in Texas is open-market, and consequently a wide range of parties can provide capital for TX-PACE financing. Eligible third-party capital providers may include:

  • Any federally insured depository institution such as a bank, savings bank, savings and loan association, and federal or state credit union;
  • Any insurance company authorized to conduct business in one or more states;
  • Any registered investment company, registered business development company, or a Small Business Administration small business investment company;
  • Any publicly traded entity; or
  • Any private entity that:
  • Has a minimum net worth of $5 million;
  • Has at least three years’ experience in business or industrial lending or commercial real estate lending (including multifamily lending), or has a lending officer that has at least three years’ experience in business or industrial lending or commercial real estate lending; and
  • Can provide independent certification as to availability of funds.

All capital providers must have the ability to carry out, either directly or through a servicer, the bookkeeping and customer service work necessary to manage the assessment accounts.

Note that Texas PACE Authority neither recommends nor endorses any particular PACE capital providers. This directory is provided solely for convenience in consolidating a list of PACE service providers.

List of Consenting Lenders

16. I have a detailed question; how do I get an answer?

You can contact us directly at admin@texaspaceauthority.org OR 1-855-738-PACE (7223)

17. Is a TX-PACE program available in my area?

Click here to be redirected to the “Where is PACE?” page.