The ECOreport recently published an excellent story on the rise, fall and rise again of PACE programs. Property-assessed-clean-energy or PACE got it’s start in Berkeley, California when the then mayor’s Chief of Staff, Cisco DeVries, put the pieces together for the idea in 2007.
PACE is a special tax assessment to help finance solar or other clean energy improvements at homes. Rather than require the homeowners to finance the project upfront, municipalities will fund the projects through bonds created. The loans are then paid back in the form of an additional property tax assessment. PACE financing programs require the cooperation of local governments that assess property taxes.
In 2010, at the peak of the housing crisis, Fannie Mae and Freddie Mac put the programs to a halt by discouraging local governments from implementing them out of fear that they may aversely affect an already unstable mortgage system. This was despite the fact that PACE, like any other property assessment placed by a local government take precedence over any private debt.
Meanwhile, DeVries kept plugging away, providing commercial PACE programs until the California housing market eventually recovered and Governor Jerry Brown was able to establish a fund to cover the mortgage lenders from potential losses.
Last year, DeVries’ company, Renewable Funding, relaunched the residential PACE program in 17 counties and 142 cities in California. Soon they’ll be able to accommodate every municipality in California.
According to DeVries, Florida is probably the next state with the insurance funds available to implement residential PACE programs again!