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them) to the PACE administrator as part of the package of verification documents necessary for final payment.

In addition to the checks on completion and quality performed by utility and building inspectors, a recommended practice for a PACE program to adopt is performing independent inspections (by program staff or a third-party inspector) of completed projects. If program planners decide that inspection of 100% of projects is not warranted, or is not feasible (due to budget or resource constraints), then inspecting a subset is encouraged. Inspections on a subset of projects can have two components:

  • 1.

    Inspection of a certain number of the first projects completed by each contractor under the PACE program (e.g., the first three projects, or some unstated number of the first five projects).

  • 2.

    Inspection of a random sampling of projects annually beyond the first projects included in #1 above (e.g., 15% of total projects annually).

The purpose of independent inspections is to ensure quality expectations are met, to guard against fraud,14 and to make sure contractors are abiding by the terms of the program. Also, if an applicant has elected not to participate in a utility incentive program (if the PACE program decides participation is optional), or if some of the project’s measures are not covered by the utility incentive program and its associated inspections, then third-party inspections will likely be necessary for measures not otherwise subject to utility inspection.

In addition to independent postinstallation inspections, a PACE program may decide a preinstallation inspection is appropriate and necessary to verify the before conditions and to guard against fraud.

11. Design Application Processing Procedures The PACE application process for a property owner typically includes the following actions:

  • 1.

    Energy Audit: Have a trained technician perform an energy audit that includes recommended measures for improving the property’s energy efficiency.

  • 2.

    Eligible Measures: Choose measures to be included in the project based on PACE eligibility, goals, and cost effectiveness.

  • 3.

    Lender Consent: Engage the mortgage-holder and obtain consent to add the PACE assessment to the property tax bill.

  • 4.

    Application Submission: Submit application package to the PACE administrator.

  • 5.

    Application Approval: Receive application approval from the PACE administrator.

  • 6.

    Project Implementation and Completion: Have licensed contractors implement the measures.

  • 7.

    Payment Request: When project milestones are met or the project is completed, submit request for progress/final payment.

  • 8.

    Repayment: Pay back the assessment via property taxes; the term is between 5 and 20 years, depending on the useful lives of the included measures.

The two points at which the PACE program administrator is most heavily involved are when the property owner submits the application (step 4) and when the applicant requests payment (step 7). It is vital for the

14 As in any large industry, a few unethical companies can take advantage of certain situations and not complete the project work as expected or promised. Grantees should always use licensed contractors and make monitoring and verification of work, results, and savings a mandatory part of their commercial PACE programs.


Chapter 13


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