PACE (Property Assessed Clean Energy) financing lets you pay for energy upgrades through a charge on your property tax bill instead of a traditional loan. Your municipality, or an agency working with it, covers the up-front cost of eligible work like heat pumps, insulation, windows or solar, and you repay it over 5 to 20 years. Because the charge is tied to the property, in many programs it can stay with the home if you sell.
Key takeaways
- PACE programs are run or enabled by municipalities, under provincial legislation, so availability depends on where you live.
- Repayment is added to your property tax bill over a set term, often at fixed rates.
- Programs typically cap financing at a share of your property's assessed value and require the work to be eligible and properly documented.
- Benefits include no large up-front payment, longer terms, and the possibility of transferring the balance with the property.
- Talk to your mortgage lender before you sign; some lenders have concerns because property tax charges rank ahead of mortgages.
How PACE works
The basic flow is similar across Canadian programs:
- Check eligibility. Your municipality must offer a program and your property must qualify, usually meaning taxes are up to date and you are the registered owner.
- Energy assessment. Many programs require a home energy evaluation before and after the work, both to recommend upgrades and to confirm results.
- Application and approval. You apply with quotes for eligible upgrades. Approval typically comes before work starts.
- Installation. A contractor completes the work.
- Payment. The program pays the contractor or reimburses you, sometimes in stages.
- Repayment. A special charge appears on your property tax bill, often with monthly instalment options, until the balance is repaid.
Because repayment is secured against the property, interest rates can be competitive with or lower than unsecured loans.
What PACE typically pays for
Eligible upgrades vary by program, but commonly include:
- Air-source and ground-source heat pumps (see our heat pumps and geothermal page)
- Insulation, air sealing and windows and doors
- High-efficiency water heaters
- Rooftop solar panels and, in some programs, battery storage
- Level 2 EV chargers in some programs
- Water-saving fixtures in some programs
A real example: Toronto's Home Energy Loan Program
The City of Toronto's Home Energy Loan Program (HELP) illustrates how a mature PACE-style program is structured. According to the City, as of 2026:
| Feature | Toronto HELP (2026) |
|---|---|
| Maximum loan | Up to $125,000, or 10% of the property's current value assessment if lower (including interest and a 2% administrative charge) |
| Fixed rates | Roughly 3.8% (5-year) to about 5.1% (20-year), valid to the end of 2026 |
| Terms | 5, 10, 15 or 20 years; 20 years only for projects including solar, geothermal, windows or heat pumps |
| Repayment | Through the property tax bill, in instalments |
| Prepayment | Allowed at any time without penalty |
Rates and terms are set by the City and change over time, so always check the current details.
Where PACE is available in Canada
PACE needs enabling legislation from the province and a participating municipality:
- Alberta has a provincial framework, the Clean Energy Improvement Program (CEIP), offered by participating municipalities.
- Ontario allows local improvement charges for energy upgrades; Toronto, Ottawa and several other municipalities have run programs.
- Nova Scotia municipalities have offered property-assessed financing for solar and efficiency upgrades for years, and Halifax's Solar City program is a well-known example.
- Other provinces and individual municipalities have pilots or are developing programs.
Programs open, pause and change funding regularly, so search your address on our rebate finder or check your municipality's website. Our financing page also covers alternatives.
Pros and cons
| Pros | Cons |
|---|---|
| No large up-front payment | Available only in participating municipalities |
| Long terms align payments with upgrade lifespans | Program and administrative fees may apply |
| Fixed rates in many programs | Rates may be higher than a secured mortgage or HELOC |
| May transfer with the property when you sell | Buyers or their lenders may ask for the balance to be paid at closing |
| Often pairs with rebates | Your mortgage lender may need to consent |
| Based on property, not just personal credit | Missed payments are treated like property tax arrears |
Questions to ask before signing
- Does my mortgage lender need to approve this? Property tax charges generally rank ahead of mortgages, so some lenders want to be notified or consent.
- What happens if I sell? Can the balance transfer to the buyer, and is it likely the buyer's lender will want it paid off?
- Are there fees beyond interest? Application, administration or registration charges.
- Can I prepay without penalty?
- How does it interact with rebates? Some programs require rebates to be applied to the balance; others let you keep them. Our guide on how to stack federal, provincial and municipal rebates explains the bigger picture.
- Is an energy evaluation required, and who pays for it?
Frequently asked questions
Is PACE financing a good deal?
It can be, especially if you lack savings for a big project and want a fixed rate over a long term. Compare the total cost, including fees, against a HELOC, refinancing or utility financing before deciding.
Can renters use PACE?
Generally no, because the charge is attached to the property. Renters can ask landlords about PACE-financed upgrades, which some landlords use to improve comfort and lower operating costs.
Does PACE affect my credit score?
PACE is tied to your property tax account rather than a typical credit product, so it generally does not appear like a regular loan, but missed payments can lead to serious consequences similar to unpaid property taxes.
The bottom line
PACE financing turns a large up-front upgrade cost into manageable payments on your tax bill, often at fixed rates over terms that match the life of the equipment. If your municipality offers it, it is worth comparing with other options, as long as you understand the fees, check with your lender and know what happens if you sell. For where upgrades fit in the bigger plan, see our home energy page.
Sundamentals is an independent, non-profit education platform. Program details and prices change often — check current programs for your address in our rebate finder.