PACE financing (property assessed clean energy financing) is a means used in the United States of America of financing energy efficiency upgrades, disaster resiliency improvements, water conservation measures, or renewable energy installations of residential, commercial, and industrial property owners. Depending on state legislation, PACE financing can be used to finance building envelope energy efficiency improvements such as insulation and air sealing, cool roofs, water efficiency products, seismic retrofits, and hurricane preparedness measures. In some states, commercial PACE financing can also fund a portion of new construction projects, as long as the building owner agrees to build the new structure to exceed the local energy code.

The business model of the PACE program has been criticized. Private companies get a lien against a house, and prioritized payback. In addition, private contractors solicit homeowners to sign PACE contracts. As a result, a significant portion of people who sign PACE contracts lose their homes.

Examples of energy efficiency and renewable energy upgrades range from adding more attic insulation to installing rooftop solar panels for residential projects and chillers, boilers, LED lighting and roofing for commercial projects. In areas with PACE legislation in place, governments offer a specific bond to investors or in the case of the open-market model, private lenders provide financing to the building owners to put towards an energy retrofit. The loans are repaid over the selected term (over the course of somewhere between 5 and 25 years) via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts, state agencies or finance companies and the proceeds can be used to retrofit both commercial and residential properties. One of the most notable characteristics of PACE programs is that the loan is attached to the property rather than an individual. A PACE loan is therefore said to be nonrecourse to the borrower.

PACE can also be used to finance leases and power purchase agreements (PPAs). In this structure, the PACE property tax assessment is used to collect a lease payment of services fee. The primary benefit of this approach is that project costs may be lower due to the provider retaining the tax incentives and passing the benefit on to the property owner as a lower lease or services payment.

PACE programs help home and business owners pay for the upfront costs of green initiatives, such as solar panels, which the property owner then pays back by increasing property taxes by a set rate for an agreed-upon term ranging from 5–25 years. This allows property owners to begin saving on energy costs while they are paying for their solar panels. This usually means that property owners have net gains even with increased property tax.