In our experience, owners of low-income housing often face three barriers to performing green retrofits at their properties:

• They lack the available staff to initiate and perform the work
• They lack the expertise to design the optimal solutions
  and to assess the risks
• Most importantly, they can’t access the capital to pay for the work

This is the real value of ACE: providing the necessary capital to complete these improvements, which will be made easier through your investment in ACE.

To address these barriers, ACE:

• Provides all of the resources and expertise necessary to perform these improvements
• Assumes the risks of their performance
• Provides 100% of the capital:
  • With no liability on owner for ACE financing
  • No mortgage on the owner’s real estate

To see the specific improvements that ACE might install, see the FAQ section.

Tropic Construction and eConserve were service partners with ACE management on past projects, but not yet with ACE.

Maintaining affordable* housing for seniors, disabled individuals and families with low income has always been a challenge. The National Low-income Housing Coalition estimates that the U.S. “has a shortage of 7.4 million affordable and available rental homes…resulting in 35 affordable and available units for every 100 [extremely low-income] households.” 

(Source: National Low Income Housing Coalition, the GAP Report - A Shortage of AffordableHomes, March 2017.)

Now, with the current political climate, that challenge is even greater. ACE’s work will provide critical and direct financial and other support to the owners of low-income housing and, to a certain extent, to its residents by reducing and controlling their utility costs.

This will help to:

• Maintain the quality of existing low-income housing
• Allow some owners to preserve existing affordable housing and reclaim market-rate housing for low-income housing by lowering projected operating costs
• Provide tangible proof to low-income communities that people are investing in their homes—and in them.

ACE's work reduces dangerous greenhouse gases (GHG) and preserves precious water resources, while creating a more healthful physical environment for the residents of the projects we improve. 

Through our energy efficiency and water conservation improvements our goal for a typical future project is to:

• Reduce electricity consumption by 15-40%
• Reduce natural gas consumption by 20-40%
• Reduce water consumption by 25-60%

ACE's renewable improvements further reduce GHG

ACE intends to develop multiple sustainability projects. For each such project, ACE would expect to obtain revenue (which will vary from project to project) from some or all of the following sources:

• A Developer's Fee targeted at 10% of total project costs
• Contract Revenues over the term of an anticipated 10-year agreement consisting of:
  • A share of energy and water savings
  • Payments for onsite solar or cogeneration electricity production
  • Other subsidies made in certain states for solar production

(ACE will also receive one-time subsidies from state and utility incentive programs for energy efficiency improvements and Federal tax credits for its renewable improvements, which are used to reduce the capital costs of its projects.)

As an ACE investor:

• The value of your investment will grow with ACE's success
• As determined by ACE management and assuming ACE's future success, your return could eventually be in the form of:
  • Dividends declared at a later stage in the company’s development
  • Proceeds from a sale or recapitalization of ACE

*See the description of Risks in Offering Details below describing the relative possibility of the declaration of dividends or the sale of ACE.

of low-income housing in U.S.

of low-income housing in ACE's target states

ACE's potential revenues over 10 years

What is the difference between “Affordable” housing and “Low-income” housing and which does ACE serve?

We use these terms interchangeably. “Affordable” housing is an industry term used to mean government subsidized housing for individuals and families whose income falls below levels that make quality housing otherwise unaffordable. The subsidies are either project-based support (tax credits or low-interest loans to reduce the cost of the housing to the developer) or tenant-based support (direct subsidies to the residents). ACE is not currently pursuing a third category of affordable housing, which is government-owned public housing, where residents live rent-free.  

Who is your competition?

We know of only two organizations that make providing broad-based sustainability services to affordable housing a priority: Commons Energy in Vermont and Elevate in Illinois. Having these two excellent organizations pursuing the same objectives is a good thing for ACE because this competition should attract more capital to our market. There could be others of which we are not aware, and there are many other service providers who market more limited services to affordable housing including lighting, specific efficiency projects and renewable energy and, in some cases, they will finance the improvements.

What are your plans for growing the ACE team?

As we add projects and expand our business development efforts, we will need additional staff. It is our intention to continue to stay as lean as possible until we believe that the level of work is sufficiently large and predictable to support additional full-time employees. Until then, we will continue to use the variable resources of our strategic partners, Bright Power, Inc. and dbHMS, and the resources of other service providers whom we either know or will have vetted adequately. Our first new hire will most likely be an experienced project manager with some expertise in sustainable technology.

Why don’t the owners of low-income housing do this work themselves?

Most non-profit owners of affordable housing are resource-strapped. In our experience, members of their staff typically work extremely hard to perform their core functions, so it’s difficult for them then to add the evaluation, installation and management of new green improvements to their “day jobs.” In addition, they may lack the internal expertise to assess and assume the risks associated with the performance of these improvements.

Ultimately a major barrier preventing them from doing this work is the difficulty of obtaining the capital necessary to pay for the improvements. To our understanding this is true for several reasons:

• Their annual budgeting process limits them to making improvements that can pay for themselves during that budget year, which eliminates most measures.
• By the nature of the governmental regulations to which they are subject, they typically cannot accumulate the reserves necessary to pay for these improvements from cash.
• It is difficult for them to borrow new money because existing partners and lenders do not want their positions disturbed by new money.

Confronted by these barriers and faced with the ongoing challenge of maintaining affordable housing—and without the assistance of ACE or a similar provider—they may choose to do nothing

What effect will the current Administration in Washington have on ACE’s business?

The answer to this question is different for our energy efficiency and water conservation work, on the one hand, and our renewable energy improvements, on the other.

Fortunately, when it comes to energy efficiency and water conservation, the states and local utilities are the drivers of sustainability and the source for most of the meaningful financial subsidies. Progressive states like California, New York, as well as a number of states in New England, Mid-Atlantic and Upper Midwest have for the most part maintained or increased their announced support of sustainability. These are the states that ACE is targeting, so ACE doesn't expect the policies that may be adopted by the Federal government to have a material impact on the financial subsidies supporting its energy efficiency and water conservation work.  

The answer is different for our renewable strategies. Historically, renewable improvements were only possible with the financial subsidies coming from Federal tax credits. These tax credits were renewed with bipartisan support in 2015 and many observers believe they will not be repealed. However, the current Administration and members of Congress have announced their hope to reduce the maximum corporate tax rate from 35% to 15%. If this were to happen the proceeds from the tax credits would be reduced proportionately (e.g., by 58%) or, even worse, the corporations, who are the primary investors in these credits, would conclude that they weren’t worth the trouble and would no longer invest in the credits at all. Thus, one of the important sources of capital used by ACE to pay for renewable systems would either be materially reduced or eliminated altogether. However, the productivity of solar panels and other renewable systems has been improving at such a rapid rate that we can reasonably hope for a time in the near future when Federal subsidies may not be required to make renewable systems financially feasible.

What kind of retrofit improvements do you install at the properties?

We start out with the goal of installing as much energy efficiency, water conservation and renewable energy improvements as is technically and financially feasible. Currently, there are limits to what we can afford to do. However, our approach of using improvements with faster paybacks (like lighting, water conservation and controls) to, in a sense, subsidize important measures with longer paybacks, allows us to do a broader scope of improvements than is typical. We call this the “Whole Tree” approach, as opposed to a more typical “Low-hanging Fruit” approach.

The measures that we are often able to install include the following:

• Energy-efficiency lighting and lighting controls
• Low-flow faucets, shower-heads and toilets (we also focus very closely on leak detection and prevention)
• Energy-efficient domestic hot water heaters
• Building and system controls
• Insulation and air-sealing
• Recommissioning (making sure that all existing equipment is properly tuned and maintained and being operated correctly)
• Repiping
• Renewable energy systems, typically solar photovoltaic panels (that produce electricity) and solar thermal panels (that reduce the need for natural gas and/or electricity to heat or cool the properties)

Other site-specific improvements are often found as we perform detailed audits and analyses.

How does ACE intend to grow its business?

During his years working on this model, first as part of a subsidiary of Hispanic Housing Development Corporation and now at ACE, Jeff Greenberger has had discussions with a number of national and regional owners of affordable housing about working with ACE. There is an increasing interest by many of these owners in exploring how they might work with ACE. Because of the limited size and resources of ACE and the importance of successfully launching and implementing the Mercy/ACE Portfolio Project, we have not advanced these discussions, choosing instead to focus on getting the Mercy Housing project moving. As soon as we know that the installation of the Mercy Housing improvements is well underway, we will actively pursue these other identified opportunities in person and expand our business development activities in general.

Our business development strategy, beyond contacting our key prospects, will include:

• Continuing to work with our partners, particularly Bright Power, Inc., in reaching out to their existing and prospective customers.
• Expanding our efforts with the significant groups supporting affordable housing, including the Stewards for Affordable Housing’s Future (“SAHF”), NeighborWorks, the Department of Energy/HUD Better Building Challenge Participants, Local Initiatives Support Services (“LISC”) and Enterprise Community Partners, among others.
• Continuing to speak at conferences and place articles in publications designed to reach affordable housing owners.

We also hope that investors and others visiting this site will share our mission and value proposition with any owners of affordable housing that they may know

Where does ACE stand in seeking a loan for the Mercy/ACE Portfolio Project?

We have spoken to a large number of possible lenders without success. However, ACE is in active discussion with two potential mission-driven lenders and remains optimistic that a loan will be secured from one of them (or from one of the other potential funders with whom we have had more preliminary discussions). Jeff Greenberger, an ACE principal, intends to loan funds to the Company for immediate needs of the next phase of work within the Mercy/ACE Portfolio Project (Phase 2 comprised of six properties), unless and until a project loan is obtained. Mr. Greenberger intends to be repaid these and other project-related advances provided by him at such time as ACE receives funds from a loan. These project-related advances are currently estimated to become approximately $128,000. If a project loan is not obtained, Mr. Greenberger may or may not seek repayment for these advances from the proceeds of this Offering. 

ACE continues to explore a number of other avenues to finance the project and may use proceeds of this campaign to pay for portions of the Mercy/ACE Portfolio Project as it works to find a third-party financial partner that will provide a project loan

What were the reasons for the separation of the ACE mission from Hispanic Housing Development Corporation?

Early in 2012, Hispanic Housing Development Corporation (“HHDC”), a non-profit owner and manager of affordable housing, formed an energy efficiency subsidiary, Affordable Community Energy, Inc. (“HHDC Energy Subsidiary”)—which is not the same as ACE, the company engaged in this offering of Class B Common Stock. The goal of HHDC, which was generously supported by an Energy Innovation Fund grant from the U.S. Department of Housing and Urban Development (“HUD”), was to determine whether a replicable, sustainable business model could be developed to provide broad-based efficiency, conservation and renewable improvements to affordable housing owners. The HHDC Energy Subsidiary used the HHDC portfolio of properties to prove the financial and technical elements of a viable business model. During the four years of its existence, the HHDC Energy Subsidiary completed more than $10 million of improvements across the HHDC portfolio.

In early 2016, once the model proved successful, HHDC and Jeff Greenberger recognized that HHDC’s primary mission was the development and ownership of affordable housing and not sustainability. In addition, Mr. Greenberger recognized that he could execute the original business strategy more organically as a stand-alone business. As a result, ACE was formed on July 1, 2016 as a totally separate entity to carry on the mission of the HHDC Energy Subsidiary.

HHDC invested substantial capital and time in the creation of HHDC Energy Subsidiary. Much of that investment has been repaid by the performance of the improvements made at the HHDC portfolio and the remainder is expected to be repaid through HHDC Energy Subsidiary’s share of savings and the revenue from the renewable electricity being produced on-site. The Company has no obligations to HHDC. From HHDC’s viewpoint the efforts that led to "proof of concept" for ACE were a success