Dive Brief:
- California’s programs to fund energy efficiency retrofits and distributed generation installations for homes and businesses backed about $600 million in projects in 2014, up from about $60 million in 2013, Greentech Media reports. About 75% of the funding went to energy efficiency and 25% to distributed generation.
- The property-assessed clean energy (PACE) loan programs make loans to home and business owners and collect payments through property tax assessments. The residences and businesses save on their energy bills and the publicly-funded loans put taxpayers at little risk because property owners pay their taxes.
- More growth is expected in the programs in 2015. The commercial side of the California program is said to have $400 million in projects in its pipeline. Renovate America, which handled 95% of California’s $500 million in 25,000 residential projects, securitized more than $200 million in bonds in 2014, opening up new sources of funding.
Dive Insight:
California’s funding program, according to advocacy group PACENow, covers new heating and cooling systems, lighting improvements, solar panels, water pumps, and insulation, among other things, and 100% of the upfront costs can be handled through loans secured with residential, commercial, industrial, non-profit, or agricultural property.
The improvements add marketable value to the properties. The PACE repayment period can be extended up to 20 years and the loan is transferable with property ownership.
PACE programs require state-level legislation allowing local governments to provide the loans. Local officials identify qualified service providers to approve cost-effective projects, then process applications. Assessments are added to property taxes only after the loan is dispersed.
30 of the 50 states and the District of Columbia have enacted PACE legislation. Legislatures in Arizona, Pennsylvania, and Kentucky are working on new laws. Arkansas passed its law in 2014.
