What is the PACE program? PACE is a program supported by the Inflation Reduction Act of 2022 that tasks RUS with providing partially-forgivable loans to renewable energy developers and electric service providers to help finance large-scale solar, wind, geothermal, biomass, and hydropower projects. Energy storage projects to support the reliability of renewable energy systems are also eligible for financing. 

Who is eligible to receive PACE loans? PACE loans are available to applicants that generate electricity for resale to residents in rural and non-rural areas where 50% of the population served by the proposed renewable energy project lives in communities with populations of 20,000 or fewer. The list of entities is broad and includes corporations, states, territories, municipalities, utility districts, cooperatives, non-profits, Indian Tribes, Alaska Native, regional, or village corporations, LLCs or other for-profit entities. 

What is the goal of the PACE program? The USDA indicates that the goal is “to make clean energy affordable for vulnerable, disadvantaged, Tribal and energy communities to heat their homes, run their businesses and power their cars, schools, hospitals and more.”

What is required for a proposed application to be considered for a PACE loan? To be considered eligible for a PACE loan, you must be an eligible entity, substantiate that your project is financially and technically feasible, securable, and that it can be completed within the allotted time frame. Additionally, it must be affordable and promote reliable and resilient power. 

How much funding can an entity apply for? The Inflation Reduction Act includes $1B in PACE program funding, and the maximum available loan is $100M including the forgivable portion. The minimum loan amount is set at $1M. Allocations of funding will be distributed across three applicant categories: 

• Category 1: up to 20% of total loan forgiveness for applicants who meet a minimum set of standards. 

• Category 2: up to 40% of total loan forgiveness if the project is in or serves 50% or more of the population of a designated energy community,  disadvantaged community, or distressed community. 

• Category 3: up to 60% of total loan forgiveness if project is located in US territories or Compact of Free Association (COFA) areas, served areas with 60%+ Tribal populations or are owned by Tribal government, or are in a Substantially Underserved Trust Area (SUTA)

What projects is PACE funding intended to support? PACE will support commercially available and financially feasible projects including the deployment of wind, solar, hydropower, geothermal, or biomass renewable energy projects for off-takers including utility or non-utility customers. Energy storage projects that promote reliability of renewable energy systems are also eligible. 

What are the terms of a PACE loan? PACE loan terms are the shorter of 35 years, useful life of equipment financed, PPA term, any leased real property. 

How does my rural electric co-op apply for funding? Online through the application portal, linked here.

What is the timeline for application? The application window is open July 10-September 29. Applications will be reviewed on a rolling basis.