The Property Assessed Clean Energy (PACE) program has been hailed by Scientific American as one of the “top 20 ways to change the world.”
What is PACE solar financing
PACE financing is a program that allows a homeowner to pay for energy efficiency or renewable energy improvements to their home with no upfront or out of pocket costs. Approved energy efficiency projects, including photovoltaic home solar power systems, are fully funded by municipal bonds issued through states, cities, or finance companies. The cost of the improvements are then attached to a property tax assessment and repaid over a period of up to 20 years.
Advantages of the PACE program
One of the really attractive considerations of the PACE program is that the loan is attached to the property rather than an individual; freeing up a homeowners cash, saving money on monthly energy bills, increasing property value and showing a net gain year after year. The PACE program is also applicable to solar leases and PPA’s, two of the most popular and easily obtained options used to go solar.
Why haven’t I heard of PACE before?
PACE was originally known as a “Special Energy Financing District” and was first implemented in 2008 as the BerkeleyFIRST climate program in Berkeley CA as the brainchild of Cisco DeVries who was then the chief of staff to Berkeley’s mayor. Although the program was welcomed with open arms and viewed as a viable solution to help California meet its long term energy efficiency goals, in 2010 the program was thwarted by the FHA that refused to back mortgages that were part of the pace program. Because of the standpoint of the FHA PACE has only been of benefit to the commercial market. That has since changed and as of August 24th, 2015 Ed Golding, Head of the FHA acknowledged the benefits of the PACE program and released this statement:
“PACE allows homeowners to benefit from the improvements immediately and spread the cost over time. When the property is sold, the PACE loan may transfer to the next owner who is responsible for repaying the loan. The ability to transfer the loan to the new owner allows for both the payment and the value of the retrofit to be transferred from one owner to the next.”
Qualify For Pace
The PACE program, while not a new player in the solar energy financing arena, has been on a forced hiatus in the residential market. During this time PACE has proven its value in the commercial energy efficiency markets.