Property Assessed Clean Energy (PACE) was a key breakthrough benefit for homeowners to easily install solar. Fanny Mae and Freddie Mac put the kibosh on the program because they said it was to risky. (PACE was risky but subprime loans were OK? See cartoon at bottom of post to explain why.)
Anyhoo, since then, PACE, the California Energy Commission and dozens of solar installation companies have been working to come up with an alternative financing program. Well it looks like they may have one.
Last week “Energy Upgrade California” was cleared by the California Energy Commission funded by federal stimulus money. Nice work folks. Creative financing methods make solar affordable for a lot more people. Lets get residential solar installations in California back on track with Energy Upgrade California financing keeping local renewable energy jobs on the upswing.
The time is right to install solar on your home. Installing solar means you will be improving your home, saving money on your utility bill, and helping the environment. Read More
New solar financing program emerges after collapse of state’s property tax plan, Mercury News By Kurtis Alexander, Santa Cruz Sentinel
Mike Arenson, aka “Solar Mike” and head of Arenson Solar Inc.. says he still gets asked by homeowners whether they can finance the installation of solar panels through their property tax bill.
The novel Property Assessed Clean Energy program, or PACE, which was touted as way to boost efficiency across the state by allowing property owners to pay for energy upgrades, solar installation with a special tax assessment, was shot down by federal regulators in June after it was deemed too risky.
“This hasn’t been good news at many levels,” said Arenson, noting it’s a missed benefit for residents, solar installers like himself and the environment. “Almost everybody who has asked me about solar has asked my about PACE. This was a major piece of the pie in terms incentivizing solar installation.”
The backers of PACE, however, are not giving up. The $33 million of federal stimulus slated for the program are being redirected to a new program that also aims to expedite financing for projects like installing solar panels, new heating and cooling systems and window insulation.
The program, Energy Upgrade California, was cleared by the California Energy Commission last week, and its coordinators are now seeking buy-in from individual counties, including Sacramento.
“The services will be similar to the services that would have been provided (before),” said Virginia Johnson, executive director of Santa Cruz based Ecology Action, one of the coordinators for Energy Upgrade California. “It’s a great opportunity for property owners.”
The program, which will use a pooled demand for solar installation financing to leverage competitive loans, does not, however, allow property owners to pay down projects on their property tax bill. Among the advantages of PACE were that it was available to most property owners and that payments stayed with the property, should the owner choose to sell.
“What was so good about the solar model was that a lot of people could get into it,” said county Supervisor John Leopold, who has been pushing for local solar installation financing for almost two years.
Leopold, like others watching what will emerge, say success of any new solar financing plan will hinge on the accessibility of solar kit residential loans. “The question is whether the solar financing will be appealing,” said Erik Schapiro, the county’s housing program chief.
Johnson, who anticipates lending details to be in place next month, says the new solar installation financing program will have very favorable financing. Several lenders, she says, have stepped up to compete for the potentially huge market that exists for energy efficiency loans.
Property owners, she says, can expect to pay 6.5 to 7 percent annually on 20-year solar installation loans, the same as what the PACE would have offered, and both homeowners and business owners will be eligible.
In addition to solar residential installation financing, Energy Upgrade California Solar Kits i will link property owners to rebates and tax incentives. Technical assistance will also be available.
“People will be able to go to a Web portal, type in their ZIP code, and immediately access the solar rebates, incentives and financing options available to them,” Johnson said.
The program is expected to be up and running in January, and the county Board of Supervisors today is scheduled to direct county planners to begin preparing.
Although plans for PACE solar installation financing collapsed, coordinators of Energy Upgrade California hope the property tax model will eventually return and can be assimilated into the new program.
The state’s congressional Democrats are pursuing legislation that would require federal regulators to accept PACE. At the same time, California Attorney General Jerry Brown is suing Fannie Mae and Freddie Mac, claiming the federal mortgage giants thwarted the program.
Fannie Mae and Freddie Mac, who won the ear of the Federal Housing Finance Agency, lobbied against PACE solar financing out of fear that homeowners who default on their mortgage would be obligated to pay the new tax assessment before making good on their home loan a high tech seo services concept at best.
The solar installation finance program, before the funding was pulled, was slated to begin in Santa Cruz and Sacramento County California this fall.