Understanding the difference between PACE and FPL for HVAC financing

PACE (Property Assessed Clean Energy) Financing

How it Works:
PACE allows homeowners to finance energy-efficient upgrades (like new HVAC systems, insulation, or solar panels) through a special assessment added to their property tax bill.
Payment Structure:
Payments are made annually with property taxes, usually spread out over 5–20 years.
Credit & Approval:
Approval is based more on property equity and tax history rather than credit score, making it easier for some homeowners to qualify.
Pros:
- No upfront payment.
- Long repayment terms (lower annual payments).
- Transferable: if the home is sold, the repayment obligation often stays with the property.
Cons:
- Creates a lien on the property, which can complicate refinancing or selling.
- Interest rates may be higher than traditional financing.
- Not all mortgage lenders or buyers are comfortable with PACE liens.

How it Works:
FPL offers financing through its participating contractor network (sometimes through third-party banks/financiers). It’s a loan program, not tied to property taxes.
Payment Structure:
Monthly loan payments, often added to or managed alongside the FPL electric bill (depending on the program). Terms are usually 5–10 years.
Credit & Approval:
Requires a standard credit check; approval is based on creditworthiness.
Pros:
- Fixed monthly payments.
- Competitive interest rates (often lower than PACE).
- No property lien.
- Can help lower energy bills immediately when paired with high-efficiency equipment.
Cons:
- Requires decent credit.
- Not transferable with property sale (you must pay off the balance).
- Shorter repayment terms than PACE, meaning higher monthly payments.