The Mission Escondida Apartments are under construction at 1515 Mission Rd.
The PACE program allows property owners to obtain financing for clean energy projects that makes loan repayments part of an owner’s property tax bill. Credit: Bonnie Arbittier / Rivard Report

In an early step towards its climate action goals, the City of San Antonio is looking to implement a program intended to make low-cost, long-term loans available for clean energy and water conservation projects on private properties.

City staff are working on a request for proposals related to Property Assessed Clean Energy (PACE) financing. PACE allows property owners and lenders to agree to financing that makes loan repayments part of an owner’s property tax bill. If a property changes hands, its new owners are then responsible for paying off the loan. 

PACE, enabled by an act of the Texas Legislature in 2013, makes it easier for lenders to cut up-front costs and extend the repayment period for the loan, according to the Texas Comptroller of Public Accounts. Owners of commercial, industrial, nonprofit, or multifamily residential properties with five or more units are eligible.

One of the barriers to property owners investing in solar panels and equipment that uses less energy and water is that borrowing costs often exceed the operational savings from the retrofit, Michael Sindon, assistant director for economic development, told council committee members on Tuesday. 

“We will not accept a project unless the savings exceed the cost over the life of the development,” said Charlene Heydinger, president of the Texas PACE Authority, a nonprofit that administers PACE programs in most of the 12 cities and 23 counties in Texas currently using PACE. San Antonio is alone among major Texas cities in not having a PACE program. 

Since 2013, the program has led to $101.5 million in investments for 26 projects, Sindon said. Financing for retrofits of the Butler Brothers Building across from Dallas City Hall and the Barfield Building in downtown Amarillo came about through PACE programs. 

Approving a PACE program has long been a part of the City’s sustainability goals, and champions of the recently passed Climate Action and Adaption Plan praised it as an easy initial step to reducing energy use in buildings. That energy use makes up 48 percent of the City’s greenhouse gas emissions, the plan states. 

PACE requires no funding from the City, though City Council would have to designate San Antonio city limits as an area where PACE can be used.

Council members were originally set to vote Thursday on an initial resolution to explore PACE but pulled the item from the agenda so City staff could issue a competitive request for proposals first. Sindon said Tuesday he and other staffers originally thought there was only one nonprofit PACE administrator in the state but later learned there are two: the Texas PACE Authority and Lone Star PACE

Heydinger, whose nonprofit defrays costs by charging a fee of 1 percent or less on the project’s cost at closing, said the program easily benefits large developers but has also proven itself valuable to small businesses and nonprofits. She listed several examples: a Jewish congregation, and an elder-care nonprofit in Austin, and an auto shop in Dallas. 

“This is going to be great for big projects and big developments, but our hearts are in helping everybody,” Heydinger said. “And jobs are created in small business.”

Brendan Gibbons

Brendan Gibbons

Brendan Gibbons is the San Antonio Report's environment and energy reporter.