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Energy Efficiency Financing for Business

Frequently Asked Questions

  1. What is the Set the PACE St. Louis Program?
  2. How does Set the PACE St. Louis financing work?
  3. What's the difference between traditional equity loans and PACE financing?
  4. How do I apply?
  5. What are the terms of Set the PACE St. Louis financing?
  6. How much is the application fee?
  7. How much can Set the PACE St. Louis financing save me?
  8. Are tax incentives or rebates available?
  9. Is Set the PACE St. Louis financing tax deductible?
  10. Is an energy audit required to participate in Set the PACE St. Louis?
  11. Do I have to pay for the energy audit?
  12. Are previously obtained energy audits eligible?
  13. What happens to the Set the PACE St. Louis assessment if I sell my property?
  14. Can I pay it off early?
  15. How do I know if I'm eligible?
  16. Do I need equity in my home, office or building?
  17. What if I live in a condo?
  18. What if I'm a renter?
  19. Is commercial property eligible for the Set the PACE St. Louis program?
  20. What projects are eligible for Set the PACE St. Louis?
  21. Can a remodeling project be eligible for Set the PACE St. Louis?
  22. How can I install products for Set the PACE St. Louis?
  23. How does a contractor register for the program?
  24. I want to become a contractor for Set the PACE St. Louis. What training opportunities are available?
  1. What is the Set the PACE St. Louis Program?
    Set the PACE St. Louis is an innovative method for property owners to finance clean energy improvements for their homes or businesses. As part of the City's sustainability plan, Set the PACE St. Louis enables residential and commercial property owners to finance energy efficiency, water efficiency and renewable energy upgrades with a novel funding mechanism that offers distinct advantages over traditional equity loans (see FAQ #3). Set the PACE St. Louis is administered by Energy Equity Funding, LLC on behalf of the St. Louis Clean Energy Development Board (CEDB), with project financing provided by financial partners.

  2. How does Set the PACE St. Louis financing work?
    Set the PACE St. Louis provides "PACE financing" for the City of St. Louis property owners. PACE stands for "Property Assessed Clean Energy." The property owner, the property, and proposed improvements must all be "eligible" in order to qualify for Set the PACE St. Louis financing. You can review specific eligibility requirements for residential and commercial property owners under FAQ #15 below.

    You may apply online or fill out a hard copy application form which can be found under the Project Application section of the website. Once you submit your application, you will be notified of your preliminary approval within 48 hours. Based on information you've supplied, preliminary approval determines basic eligibility for the program and the scope of your project.

    You will then select a participating energy auditor or consultant to analyze your property to generate a project plan with the goal of maximizing your property's energy efficiency. You will negotiate with the energy auditor or consultant for their fee and cover this initial cost which can be folded into the overall project budget for later reimbursement (for residential properties an energy audit is often times less than $300, for commercial properties the costs vary based on scope of project).

    If you have a contractor that you prefer to work with, the contractor can sign up as a participating contractor for the program. The contractor application can be found on the contractor registration link here.

    Once the energy consultant has generated a project plan, you will decide how much of the plan will be implemented and select the contractor(s) to perform the work. You will then fill out a full loan application, and along with the work plan, your project will be reviewed and approved by the lending institution. As mentioned, the cost of the initial energy consultation can be included in the PACE loan to reimburse the property owner. Should your project not qualify, changes may be made to the work plan to make it eligible.

    After financing has been approved for the project by the lending institution, construction of the improvements will begin. For larger projects, progress payment(s) can be made.

    Once the project work is completed and verified all construction liens will be signed off on and funding completed. In a typical scenario, funds should be available within days of the verification being sent to the lending institution.

  3. What's the difference between traditional equity loans and PACE financing?
    The innovative clean energy funding mechanism, Property Assessed Clean Energy or "PACE" has been named one of Harvard Business Review's ten breakthrough ideas and Scientific American's top 20 ideas that can "change the world." Why? Because it allows for more people to participate in the energy retrofit revolution. You can get your project financed today—and without the typical barriers associated with traditional equity loans. PACE is a new funding model established in 30 states that allows local governments to partner with property owners, and together with private capital financing, achieve savings on energy costs through energy efficiency and renewable energy improvements.

    Some of the attractive and unique characteristics of PACE financing are:

    • Off-balance sheet accounting
    • Low up-front investment
    • Immediate positive cash-flow
    • Long-term financing
    • Ability to pass payments through to tenants
    • PACE financing stays with the property upon sale
    • Low interest rates1
    • Greater long-term property value
    Go to the Getting Started section of the website to participate in this exciting program!
  4. Note: There is a limitation on availability for PACE financing for residential properties due to concerns raised by the Federal Housing Finance Agency (FHFA). Currently, only residential property owners who own their home without an existing mortgage can qualify for actual property assessed financing. There are, however, alternative financing options available with the Set the PACE St. Louis program, including home equity financing or energy efficiency mortgages (EEMs). We want to get your project financed and can customize the terms of the loan to best meet your needs. If you have any questions or would like to see if your project qualifies, please don't hesitate to give us a call at 314.499.8756 or contact us by email at info@setthepacestlouis.com.

  5. How do I apply?
    You can apply online or fill out a hard copy application form which can be found under the Project Application section of the Set the PACE St. Louis website.

  6. What are the terms of Set the PACE St. Louis financing?
    The maximum financing amount for a Set the PACE St. Louis project can in some cases be up to 35% of the value of your property. The minimum financing amount is $25,000. Loans can be amortized over 5, 10, 15, or 20 years depending on what improvements will be made to the property.

    Interest rates will be competitive market rates for land-secured loans. Currently, rates range between 3-6%.

  7. How much is the application fee?
    $25. You can apply online or fill out a hard copy application form which can be found under the Project Application section of the website.

  8. How much can Set the PACE St. Louis financing save me?
    Energy efficiency retrofits and renewable energy property improvements can provide a wide range of savings. 20-30% savings on a typical home is not unreasonable2. Many times the energy savings solution will be cash-flow positive, meaning the savings per month will exceed the loan payment.

    Your overall savings will be calculated by your utility bills plus any tax credits and/or tax write offs for your specific property improvements. Certain products qualify for tax credits which may reduce your federal and state income taxes. Please speak with your tax advisor to see if you are eligible for any tax credits. Set the PACE St. Louis finances products which consume less energy, consume less water or produce clean renewable energy. Your energy auditor/consultant and/or contractor can provide you will an estimate of your projected savings.

  9. Are tax incentives or rebates available?
    Tax incentives or rebates may be available for your specific property improvements.

    For most solar PV systems and other renewables, there is a federal tax credit of up to 30% of the eligible equipment cost through December 31, 2016. Federal tax credits for energy efficiency products, while reduced from 2010 amounts, still exist for certain products. Please see the EnergyStar listing of Federal Tax Credits for more information.

    Ameren and Laclede Gas both have rebate and incentive programs for residential and commercial property owners.

    Please visit Ameren's energy efficiency page at www.actonenergy.com and their renewable energy page at www.amerensolar.com.

    Laclede Gas's Rebates and Savings program: www.lacledegas.com/efficiency/programs

  10. Is Set the PACE St. Louis financing tax deductible?
    The interest on your Set the PACE St. Louis financing may be deductible depending on your personal filing. Please speak with your tax advisor to determine if the interest portion of your PACE financing is deductible.

  11. Is an energy audit required to participate in Set the PACE St. Louis?
    A certified energy audit is highly recommended to achieve the best energy savings, home safety and public benefit. A select group of prescriptive measures are eligible without performing an audit. These measures have a high level of energy savings. For example, replacing a low efficiency furnace with a high efficiency model would qualify for PACE financing.

    If you opt for no energy audit, your Set the PACE St. Louis project must qualify under the Missouri PACE statute, namely, being verified by program administrator as having an economic benefit equal to or greater than the cost of the project, and per the U.S. Department of Energy PACE guidelines, having an "expected Savings-to-Investment Ratio (SIR) greater than one," with the, "financed package of energy improvements (being) designed to pay for itself over the life of the assessment."

    For more information, or to apply for your project's approval, go to the Getting Started section of the website and fill out an application, or contact us at: (314) 499-8756. You may also contact us through the website contact form here.

  12. Do I have to pay for the energy audit?
    Yes. You will negotiate with the energy auditor or consultant for their fee and cover this initial cost which can be folded into the overall project budget for later reimbursement (for residential customers an energy audit is often times less than $300, for commercial, the costs vary based on scope of project). Many of our home performance and building performance contractors participating in Set the PACE St. Louis can perform energy audits / analysis in addition to installing the property improvements.

    If you choose to proceed with the energy savings recommendations generated by your auditor, consultant and/or contractor, the cost of your initial consultation will be included in the overall project allowing for reimbursement.

  13. Are previously obtained energy audits eligible?
    Yes, under certain circumstances. Your energy audit must have been thoroughly conducted and documented and conform to Set the PACE St. Louis's quality control and contractor accreditation standards.

    A basic component of the PACE financing concept is the idea that embedded in any energy efficiency or renewable energy retrofit performed on private property is an intrinsic benefit to the public interest in terms of increasing energy independence, lowering stress on the energy grid, stimulating the local economy through energy savings, job creation, and reducing Missouri's carbon emission pollution. Set the PACE St. Louis is designed with rigorous consumer protections, quality assurance and best practices in energy efficiency and renewable energy contracting standards. This approach guarantees the most favorable energy savings and return-on-investment on a contract-to-contract basis, combining to provide the best public benefit.

    Whole building science and property analysis feature prominently in Set the PACE St. Louis' public benefit mandate. This is why the techniques and methodology for our energy audits must have continuity within a limited range of variance.

    For more information, or to see if your previously obtained energy audit is eligible, go to the Getting Started section of the website and fill out an application, or contact us at: (314) 499-8756. You may also contact us through the website contact form here.

  14. What happens to the Set the PACE St. Louis assessment if I sell my property?
    With commercial Set the PACE St. Louis projects, the energy-equity associated with your PACE loan will be transferred to the new owner. With residential projects, the buyer's lender may require that the balance be paid off in escrow.

  15. Can I pay it off early?
    Yes.

  16. How do I know if I'm eligible?
    For commercial property owners:
    • Applicant owns commercial property in the City of St. Louis.
    • Applicant has no outstanding and unsatisfied tax liens on the property.
    • Applicant has no overdue property tax on the property.
    • Property is current on all mortgage debt.
    • Applicant has no overdue municipal service charges.
    • Applicant or property is not currently involved in a bankruptcy proceeding.
    • Commercial applicants are required to have their mortgage lenders approve and sign-off on the project.
    • Underwriting criteria for commercial projects will be handled on a case-by-case basis as the variables for project size and scope vary so greatly. The mortgage holder and bank providing interim financing, the program administrator, and the energy contractor will work hand in hand to design the most beneficial commercial PACE property improvement.
    For single-family residential property owners:*
    • Applicant owns property in the City of St. Louis.
    • Applicant has no outstanding and unsatisfied tax liens on the property.
    • Applicant has no overdue property tax.
    • Applicant has no notices of default or other evidence of property-based debt delinquency for the lesser of the past three years, or the property owner's period of ownership.
    • Property is current on all mortgage debt.
    • Applicant has no overdue municipal service charges.
    • Applicant or Home is not currently involved in a bankruptcy proceeding.
    • Applicant has clear and undisputed title to the home, agrees to pay off any outstanding debt secured by a mortgage or deed of trust on the home, or agrees to obtain a subordination of such debt from the debt holder. Applicants must prove that they are the legal owners of a property, unanimous approval of property-holders is required, and the title should be clear of easements or subordination agreements that conflict with the special tax assessment.
    • The maximum financing amount for a Set the PACE St. Louis project is up to 10% of the value of your property, and any outstanding mortgage(s) plus the PACE project costs cannot exceed 90% of your property's value. For example, if your home's value is $200,000, based on comparative market values, and your current mortgage is $165,000, you can borrow up to $15,000 for your PACE project.
    For community associations:
    • Applicant must be a condominium association or a homeowners association established and existing under its governing documents.
    • For purposes of PACE financing, applicant shall be treated as a "commercial" borrower.
    • In a mixed use development, not more than 20% of the total space may be used for commercial purposes.
    • Association has no unpaid taxes on property owned by the association.
    • Association must provide a written legal opinion stating that it the association is duly organized and existing under its governing documents, has the authority to borrow money, acts by and through its elected board, and the directors and officers are duly elected.
    • Association governing documents must contain lien rights in the event a unit owner fails to pay assessments to the association.
    • Association, as security for borrowing, is authorized to provide an assignment of reserves and/or assessments, including the right to collect assessments and enforce the association's lien for assessments in the event of a default.
    • Association must provide copy of current certificate of insurance.

    *Note: There is a limitation on availability for PACE financing for single-family residential properties due to concerns raised by the Federal Housing Finance Agency (FHFA). Currently, only residential property owners who own their home without an existing mortgage can qualify for actual property assessed financing. There are, however, alternative financing options available with the Set the PACE St. Louis program, including home equity financing or energy efficiency mortgages (EEMs). We want to get your project financed and can customize the terms of the loan to best meet your needs. If you have any questions or would like to see if your project qualifies, please don't hesitate to give us a call at 314.499.8756 or contact us by email at info@setthepacestlouis.com.

  17. Do I need equity in my home, office or building?
    Yes. The maximum financing amount for a Set the PACE St. Louis project is up to 10% of the value of your property, and any outstanding mortgage(s) plus the PACE project costs cannot exceed 90% of your property's value. For example, if your home's value is $200,000, based on comparative market values, and your current mortgage is $165,000, you can borrow up to $15,000 for your PACE project.

  18. What if I live in a condo?
    Condominiums may be eligible for Set the PACE St. Louis financing depending on the Covenants, Conditions and Restrictions (CC&R's) of the complex as well as the physical design of the unit. Condominium owners who apply will need to obtain written authorization from condominium management stating that the property owner is allowed to install the proposed property improvements.

  19. What if I'm a renter?
    Improving our city's spaces, making our properties cleaner, greener and more efficient is what Set the PACE St. Louis is all about. Living or working in a rental space that's more energy efficient and environmentally friendly has many intrinsic benefits. Although, as a renter, you cannot authorize the PACE financing for your home, office or building, sharing the details of Set the PACE St. Louis with your landlord could certainly get the ball rolling on your property participating in this exciting program.

  20. Is commercial property eligible for the Set the PACE St. Louis program?
    Yes. Commercial projects will be handled on a case-by-case basis as the project size and scope vary so greatly. Offices, small and medium retail spaces, multi-family units and industrial properties can all participate in Set the PACE St. Louis and leverage all the benefits that distinguish PACE form other types of financing (see FAQ #3). The mortgage holder, our financial partner, and your contractor(s) will work hand-in-hand to design the most beneficial improvements for your commercial property.

  21. What projects are eligible for Set the PACE St. Louis?
    Eligible projects include energy efficiency improvements, renewable energy installations and water conservation measures for commercial and residential properties. Appliances and light bulbs are not eligible because they are not permanently fixed to the property3. Also, products that were installed before applying for Set the PACE St. Louis are not eligible.

    The following property improvement projects are eligible for Set the PACE St. Louis:

    • Insulation in walls, roofs, attics, floors, foundations
    • Insulation in heating and cooling distribution systems
    • Storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective windows and doors, and other window and door improvements designed to reduce energy consumption
    • Automatic energy control systems
    • Heating, ventilating, or air conditioning distribution system modifications and replacements
    • Caulking and weatherstripping
    • Replacement or modification of lighting fixtures to increase energy efficiency
    • Energy recovery systems
    • Daylighting systems
    • Photovoltaic systems
    • Solar thermal systems
    • Wind systems
    • Biomass systems
    • Geothermal systems
    • White/green roofs
    Please see the Eligible Projects section of the website for more detail.

  22. Can a remodeling project be eligible for Set the PACE St. Louis?
    Set the PACE St. Louis provides financing for energy efficiency, renewable energy, and water conservation property improvements. If you are remodeling your entire property, you should get a separate bid for the PACE eligible improvements if you desire to finance them with our program. Please see the Eligible Projects section of the website for more detail.

  23. How can I install products for Set the PACE St. Louis?
    In certain limited situations, you may install products for Set the PACE St. Louis. Certain prescriptive measures achieving high energy savings may be self-installed—for example, replacing a low efficiency furnace with a high efficiency model. But to do so you must sign a Self-Install Agreement and you will not be paid for your own labor. When doing whole house or whole system energy efficiency analyses, only accredited energy professionals4 who have registered with the program can perform the energy audit. Only contractors registered with the program can do the property improvements or people who have signed the Self-Install Agreement.

    If you are a contractor who has registered with Set the PACE St. Louis and are installing products on your own property, you may be reimbursed for the labor costs of your work crew, but not for your own personal time and labor. Also, even if you use your work crew, you must still sign the Self-Install Agreement.

  24. How does a contractor register for the program?
    The contractor application can be found on the contractor registration section of the website here. Several training sessions will be conducted to review program participation requirements. We will inform participating contractors of these upcoming sessions.

  25. I want to become a contractor for Set the PACE St. Louis. What training opportunities are available?
    If you are interested in becoming a home performance contractor, where you start depends on what you are doing currently. Are you already a contractor? A good overview of the issues at play can be found in a document published by the national trade association Efficiency First—“So you want to be a Home Performance Contractor…” is available as a PDF here.

    Building Performance Institute (BPI) is a national organization that certifies Home Energy Auditors. More information about BPI and their certification programs can be found on their website at www.bpi.org

    The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) is an organization that publishes many standards associated with HVAC systems and energy efficiency. Their standards are often referenced in building codes and cover commercial properties as well as residential. More information about ASHRAE can be found on their website www.ashrae.org

    There are local training opportunities with the nonprofit Metropolitan Training Alliance (MTA) center which offers BPI Home Energy Auditor certifications and HVAC Service Technician training. For more information on MTA, please visit their website at www.mtastlouis.org.

    The City of St. Louis strongly encourages the participation of minority and women owned businesses in Set the PACE St. Louis.


  1. Interest rates for land secured financing are typically lower than unsecured loans. Rates will be competitive market rates and comparable to home equity loans. However, unlike equity loans, PACE financing utilizes off-balance sheet accounting and is transferable upon sale of the property.
  2. "Pike Research (2010) analysis found a 36-percent reduction in annual energy bills from an average retrofit of $3,960. The annual bill savings is $597, which is 15 percent of the original energy-efficient investment. Pike's estimate of savings is in line with other studies; the median technical potential for reduced energy consumption in the residential sector is 33 percent for electricity and 40 percent for gas." (McFarlane, Alastair, U.S. Department of Housing and Urban Development, "The Impact of Home Energy Retrofit Loan Insurance: A Pilot Program.") The energy savings associated with commercial properties vary greatly as does the scope of each commercial project depending on the type of building, size, use etc.
  3. Please visit Ameren and Laclede Gas's rebate program web pages for potential rebates on energy efficient light bulbs and other appliances. Ameren: www.actonenergy.com Laclede Gas: http://www.lacledegas.com/efficiency/programs/
  4. BPI for residential, ASHRAE for commercial

Set the PACE St. Louis
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