Case study · Financing comparison
We modeled the same 500 kW solar, storage, and efficiency retrofit three ways — cash, a conventional commercial loan, and TX-PACE — for a Texas-side facility in El Paso County. PACE is not the cheapest option. Here is when it is still the right one.
The scenario
An owner-occupied building in El Paso County, Texas. High summer demand charges, aging lighting and controls, and a roof with twenty years of life left. The owner has the credit to borrow but wants capital available for a fleet expansion. This is an illustrative composite built from typical Borderland facility loads — not an actual client project.
| 500 kW DC rooftop PV | $925,000 |
| 500 kWh / 250 kW battery storage | $425,000 |
| LED retrofit, controls, HVAC measures | $250,000 |
| Total installed cost | $1,600,000 |
| Solar energy offset (~850,000 kWh) | $93,500 |
| Demand charge reduction (~350 kW) | $50,400 |
| Efficiency measures | $46,100 |
| Year one savings | $190,000 |
Side by side
The numbers over time
Savings minus payments, including the tax credit in year one. This is cash in the owner's pocket, not accounting profit.
| Position | Cash purchase | Commercial loan | TX-PACE |
|---|---|---|---|
| Capital required at closing | $1,600,000 | $320,000 | $0 |
| Annual payment | — | $250,100 | $143,500 |
| Payment term | — | 7 years | 25 years |
| End of year 1 | −$1,005,000 | −$334,000 | +$451,500 |
| End of year 5 | −$245,000 | −$574,400 | +$637,500 |
| End of year 10 | +$705,000 | +$234,300 | +$870,000 |
| End of year 25 | +$3,555,000 | +$3,084,300 | +$1,567,500 |
PACE wins decisively for the first decade — it is the only option that never puts the owner underwater, and at year ten it is ahead of writing a check. Then it loses. Over the full 25-year term the assessment carries roughly $1.99 million in financing cost, and cash comes out about $2.0 million ahead.
PACE is not competing against the system. It is competing against whatever else that $1.6 million could do. If the capital earns more than roughly 9% deployed elsewhere in the business — new trucks, a lease on more square footage, inventory — PACE is the cheaper choice in real terms. If it would otherwise sit in a money market, write the check.
Run your own numbers
Adjust for your project cost, savings, and terms. The table updates as you type.
| Position | Cash | Loan | TX-PACE |
|---|
Simplified model. Excludes utility escalation, degradation, O&M, depreciation, and the time value of money. For directional comparison only.
When each one wins
Nothing beats it on lifetime cost. Every dollar of interest avoided is a dollar of return. If the money would otherwise sit earning treasury rates, the system is a better investment than the alternative.
At seven years the payment outruns the savings and the project becomes a cash drain during exactly the period the owner is trying to justify it. It also consumes borrowing capacity and usually requires a personal or corporate guarantee. This is the weakest of the three for a project of this shape, and it is what most owners default to.
PACE is the only structure here that funds the whole scope — solar, storage, lighting, controls, and HVAC — under one instrument with no money down and positive cash flow on day one. Because the assessment is secured by the property rather than the borrower, it does not consume borrowing capacity, and if the building sells the obligation goes with it. That last point matters more than owners expect: it removes the "we might not be here in twenty years" objection entirely.
Send us twelve months of bills and we will run this comparison against your actual facility. Request an energy assessment.
