Kentucky PACE Financing

January 02, 2024


Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activities subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation for more information about PACE financing and a comprehensive list of all PACE programs across the country.

House Bill 100 passed in the spring of 2015 explicitly grants local governing bodies the authority to establish a property assessed clean energy (PACE) financing program.

Program Formation

Local governments choosing to enact a PACE program must release a statement indicating the intention to utilize property assessments to support private sector energy projects, designate an energy property assessment district (EPAD) territory, and create a procedure for local property owners to opt in to the program.

Finance & Administration

Local governments have the option of financing the program through the issuance of a bond to be repaid by a special assessment with the same lien status as a property tax or partnering with a third party to finance the program. Similarly, governments can hire a program administrator or partner with a third party to administer the program.


All locally approved PACE financed energy projects must include a review of the property's baseline energy or water usage conditions and the energy or water savings projected to be achieved as a result of the energy project.

List of PACE Programs

The City of Bowling Green passed a PACE ordinance in June of 2015.

For details on availability in your area, contact your local government.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Kentucky
Incentive Type: PACE Financing
Web Site:
Start Date:
Eligible Renewable/Other Technologies:


Name: H.B. 100
Date Enacted: 03/23/2015
Effective Date: 06/22/2015

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.