PACE Lives!

Energy efficiency, an advanced energy technology with great economic benefits, faces a unique challenge.  Residential energy efficiency projects require upfront costs and pay back reliably, but over time.  It can be tough to convince homeowners to spend hundreds or thousands of dollars to insulate their homes in order to save a few bucks a month in heating and cooling bills.

To solve this economic puzzle, residential Property Assessed Clean Energy programs (PACE for short) enjoyed a brief period of popularity between 2008, when the first pilot was introduced, and 2010, when the program stalled out.  PACE programs allow property owners to borrow money for advanced energy upgrades, and then repay the money over time on their property tax bill.

Back in 2010, the Federal Housing Finance Agency (FHFA) put residential PACE in limbo.  The FHFA advised Fannie Mae and Freddie Mac not to buy mortgages with PACE assessments, since liens on the property stood in the way of mortgage holders in the event of foreclosure.

CaliforniaFirst (which stands for “Financing Initiative for Renewable and Solar Technology”) allows for loans up to $75,000 and a variety of repayment times ranging from five years to 20 years.  It is backed by a state insurance fund created last year to cover any losses suffered by lenders due to PACE liens on property.  With $300 million raised, it’s the biggest PACE program ever, prompting the Greentech Media headline, “The Narrative That Residential PACE Is ‘Dead’ Is Now Pretty Much Dead Itself.”

PACE Lives!