Q3 2016 OVERVIEW

In Q3 2016, commercial PACE financing scaled up with 104* new projects financed and $44.6 million invested. These numbers represent a $19.6 million increase in investment from the previous quarter, and a 380% year-over-year growth compared to Q3 2015, when PACE providers financed $9.3 million in commercial PACE projects.

In September, the largest PACE project yet – a $10 million solar installation – received financing from CleanFund Commercial PACE Capital through the CaliforniaFIRST PACE program. This project is the “first-ever commercial solar installation at a U.S. ethanol plant,” according to Neil Koehler, CEO of Pacific Ethanol, which will reduce the carbon intensity and cost of producing biofuels at the plant through an annual cost savings of over $1 million. One larger project, at $20 million, was also given preliminary approval by Missouri’s Set the PACE St. Louis program in August, and that project could close in early 2017.

PACE providers in Missouri also set a milestone for the largest agricultural PACE project: a $4 million project at a hog processing facility was financed by Twain Financial Partners through the Show Me PACE program, using RAHILL Capital as a project consultant. The facility’s owners will use the funds to make lighting, HVAC, and roofing improvements, purchase efficient manufacturing equipment, and install a

Fig. 1: Cumulative C-PACE Financing (2009 - Dec 2016)

* One program has reported increased numbers of smaller projects completed on small businesses and multifamily properties. Excluding these projects, the quarter’s numbers are: 43 new projects financed and $38MM total funding. See Figs. 5 and 7 for project size breakdowns.

solar PV system.

In Colorado, the CO-PACE program, which launched earlier this year, closed its first C-PACE project in September. Urban Green Development, a sustainable real estate developer, used $320,000 to make efficiency improvements and for a 100kW rooftop solar array. In the same month, Renew Financial’s new RenewPACE program launched in select cities in Florida to provide residential and commercial PACE financing.

California remained the top state for commercial PACE investment with approximately $23.7 million financed in the quarter, followed by Connecticut at $6.1 million.

Q3 2016

$44.6mnew dollars

invested

C-PACE Market Update

104new projects

financed

*

33 states plus D.C. have passed C-PACE-enabling laws, and there are now active programs operating in major population centers including Los Angeles, San Francisco, Austin, St. Louis, Washington D.C., and Miami. States with PACE-enabling legislation now account for over 80% of the U.S. population.

PACE LANDSCAPE TO DATESince 2009, PACE has provided $332 million in financing for energy upgrades to over 988 commercial buildings (see Fig. 1). More statistics:

• States with PACE-enabling legislation: 33 plus D.C.• States with active PACE programs: 19 plus D.C.• PACE Programs in operation: 46 (C-PACE-enabled: 44)

Fig. 2: Cumulative C-PACE Financing and Projects by State(2009 - Dec 2016)

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

0

100

200

300

400

500

600

PACE

financing($)

#Projects

C-PACEprojectsandfinancingbystate(Showingstateswith>5projects,from2009- Dec2016)

PACEFinancing($) Projects

Fig. 3: States with PACE-enabling legislation(Dec 2016)

(Showing states with 5+ projects closed)

Q3 2016

C-PACE Market Update

Fig. 4: Funding by Type of Building(2009 - Dec 2016)

Fig. 6: Funding by Type of Improvement(2009-Dec 2016)

Fig. 5: Number of Projects by Project Dollar Amount Category(2009-Dec 2016)

$0

$20

$40

$60

Millions

27%

55%

18% Small,lessthan$75,000

Medium,$75,000-$750,000

Large,greaterthan$750,000

36%

51%

14%Renewableenergy

EnergyEfficiency

Mixed

Fig. 7: Cumulative Funding by Project Dollar Amount Category(2009-Dec 2016)

Q3 2016

C-PACE Market Update