31Mar

PACE Financing, Property assessed clean energy = Local Jobs, Lower Home Utility Bills & Substantial Home Savings

Wednesday | Filed in: Solar Power Products Kits

PACE is an acronym for property assessed clean energy. (PACE) programs enable local governments to finance renewable energy and energy efficiency projects on private property, including residential, commercial and industrial properties. The programs eliminate the chief barrier to clean energy installations: the large upfront cost. If the cities in America were to get behind this program for their local citizens, this country could take the initiative to rid us of the burden of importing oil from people who do not like Americans. An additional bonus is it would create local jobs and putting more money into your local economy by reducing your monthly energy increasing your home cash flow.

PACE is based on Cisco Devrys’ Berkeley FIRST program that helped Berkeley go solar in 2008. After leaving the Berkeley government, Cisco went and founded Renewable Funding to help make a program like Berkeley FIRST work all over California. California is trying to use the same financing plan to help renewable energy development state-wide in a program called California FIRST. Renewable Funding is hoping to launch in May of 2010.

Generally, PACE is rooted in traditional land-secured municipal finance. A local government creates an improvement district; a bond, secured by real property within the district, is issued; and the bond proceeds are used to fund renewable energy and energy efficiency projects. Property owners then repay the debt service on the bond in fixed payments as part of their property tax bill.

There are two major characteristics, however, that make PACE unique. First, property owner participation is 100% voluntary. Only those property owners who choose to participate in the PACE program pay additional costs. Second, the bond proceeds are used to pay for prequalified clean energy improvements on participating properties. Improvements that a property owner may often choose from include renewable energy technology like solar panels, energy efficiency projects like a high efficiency furnace, and in some states water conservation measures.

PACE is a powerful tool for municipal governments to stimulate the local green economy while providing a competitive financing program for residents.

History of PACE

As the Chief of Staff to Berkeley Mayor Tom Bates, Cisco DeVries was tasked with helping to lead efforts to meet the city’s ambitious climate goals. He was aware these goals would be impossible to meet without dramatically reducing the energy use of Berkeley’s residences and businesses, but the policy tools at his disposal were inadequate to overcome the barrier of the high upfront cost of solar and energy efficiency projects.

In early 2007, while working on a neighborhood effort to use a special tax district to finance the under grounding of utilities, Cisco realized that by using a similar tool the city could provide low interest, long term loans for energy saving measures. This would allow property owners to payback the cost of the system over a 20-year period, while they simultaneously saved on their energy bills. Additionally, the debt would transfer to the new owner upon sale of the property.

Today, Berkeley homeowners are now enjoying solar systems financed by BerkeleyFIRST. Cisco went on to become the President of Renewable Funding, which administers and finances similar programs for local and state governments across the country.

To read more about Cisco and his work developing PACE, check out the following article published by Miller-McCune in June of 2009.

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