PACE air conditioning financing adheres to an existing structure called a "land- secured financing district." This is also often referred to as an assessment district, a local improvement district, or other similar phrases. In a conventional assessment district, the local government issues bonds to provide projects with funding, particularly those with a public purpose such as streetlights, sewer systems, or underground utility lines.
 
The recent extension of this financing model to energy efficiency and renewable energy allows property owners to ensure improvements without having to fork up a large up-front payment in cash. Property owners that choose to participate in a PACE program repay their improvement costs over a set time period—typically 10 to 20 years—through property assessments, which are secured by the property itself and paid as an addition to the owners' property tax bills. Nonpayment generally results in the same set of repercussions as the failure to pay any other portion of a property tax bill.