Powering Affordable Clean Energy (PACE)
Federal Agency
Sub-Department
Rural Development’s Rural Utilities Service (RUS)
Purpose
To forgive up to 60% of loans for renewable energy projects that use wind, solar, hydropower, geothermal, or biomass, as well as for renewable energy storage projects.
Applicant and/or Project Eligibility Requirements
The PACE program is available to eligible applicants that generate electricity for resale to residents in both rural and nonrural areas. However, at least 50% of the population served by your proposed renewable energy project must live in communities with populations under 20,000.
Decarbonization Considerations
Energy storage projects related to a renewable energy project is an eligible use of funding. Adding energy storage to a project can reduce peak demand and provide community resiliency benefits that a standalone renewable energy project is unable to.
Equity Considerations
The program supports designated energy communities, disadvantaged communities, distressed communities, and Tribal communities. Siting proposed projects in eligible IRA bonus adder locations can reduce the overall cost of a project, provide clean energy and economic benefits to a disadvantaged community, and support broader community goals. Always ensure that impacted communities are provided opportunities to engage with the project development and implementation process.
Helpful Tips
Projects must be based on bankable power purchase agreements (PPAs) or through a financial guarantee that ensures the financial feasibility of the project. Energy must be sold for resale to eligible off-takers which can include both utility and non-utility customers. The technologies used must be commercially available. Note: This is NOT related to programs often called PACE (Property Assessed Clean Energy) in many states.
Other Notes
Provided the project is otherwise financially feasible, loan terms are the shorter of: 35 years; the useful life of the equipment financed; the term of the PPA; or the term of any leased real property.