What is the Powering Affordable Clean Energy (PACE) Program?

Overview of the Powering Affordable Clean Energy (PACE) Program

The Powering Affordable Clean Energy (PACE) program, established under the historic Inflation Reduction Act, signifies a monumental leap in rural electrification since the days of President Franklin Delano Roosevelt. With $1 billion in funding, PACE strives to make clean, affordable, and reliable energy accessible to the residents of rural America. 

PACE, administered by the USDA Rural Development’s Rural Utilities Service (RUS), aims to facilitate the transition to clean energy by offering substantial loan forgiveness for renewable energy projects. These projects encompass wind, solar, hydropower, geothermal, biomass, and renewable energy storage. By providing critical financial support, PACE makes it more affordable for rural Americans to harness clean and dependable energy for their homes, businesses, and essential services like schools and hospitals.

Who is eligible for PACE?

While the program is accessible to entities generating electricity for resale in both rural and non-rural areas, there is an essential criteria to meet. At least 50 percent of the population served by a proposed renewable energy project must reside in communities with populations of 20,000 or fewer.

Eligible applicants include:

  • Corporations
  • States
  • Municipalities
  • Cooperatives
  • Nonprofits
  • Indian Tribes
  • Alaska Native entities
  • Limited liability companies or other for-profit organizations operating within U.S. states or territories.
  • Individuals are not eligible to apply for the PACE program

The program targets energy communities, disadvantaged communities, distressed communities, and Tribal communities, aiming to bridge the energy gap and enhance resilience.

How are Powering Affordable Clean Energy (PACE) Program funds allocated?

The PACE program operates with a substantial allocation of $1 billion in funding, offering loans ranging from $1 million to $100 million, which includes the forgivable portion. Funding is categorized into three applicant categories:

Category 1: Provides up to 20 percent total loan forgiveness for applicants meeting specific standards outlined in the PACE program’s Notice of Funding Opportunity (NOFO).

Category 2: Offers up to 40 percent total loan forgiveness if the project benefits designated energy communities, disadvantaged communities, or distressed communities.

Category 3: Grants up to 60 percent total loan forgiveness for projects in U.S. territories, Compact of Free Association areas, or areas with Tribal populations of 60 percent or more, owned by Tribal governments, or situated in Substantially Underserved Trust Areas.

How to Apply for the Powering Affordable Clean Energy (PACE) Program?

Application Portal

  • The application window is open from July 10 to September 29, 2023.

Letter of Interest (LOI) Submission

  • Prepare your LOI for submission.

Finalize Your Letter of Interest

  • Make sure your LOI includes all required information.
  • The Agency will evaluate LOIs as they are received.

LOI Evaluation

  • If your LOI meets all program requirements, you may receive an invitation to submit a full application.

For program details visit the USDA Rural Development Inflation Reduction Act website.

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