Gathering PACE

We wouldn’t normally revisit a subject as many times as this, but things are moving even faster than we thought on the subject of solar installations funded through property taxes.

We first reported on this phenomenon a year ago in connection with the first community to activate such a program: Berkeley, CA, in November 2008.   This was, appropriately enough, the Berkeley FIRST program.  By July 2009, interest in property-assessed clean energy (PACE) programs was spreading across the country, and in November last year we wrote about the efforts of the state of New York to allow for special tax financing districts as a precursor to launching their own PACE program.

Nothing succeeds like success, and there are now no fewer than eighteen states with PACE legislation on their books.*  Better yet, the U.S. Department of Energy (DoE) is offering free technical assistance to local governments who are starting PACE programs with ARRA (stimulus) funds.

Resources.

You’ll find a concise introduction to the PACE concept on the Department’s Energy Efficiency & Renewable Energy web site.  It makes the points that while PACE allows for secure financing over a long term and reduces the homeowner’s exposure and upfront barriers, it also involves a more tortuous legal and administrative process that can, for now at least, drag the financing and permitting process out.

It also references, significantly, the fact that traditional lenders may be resistive to the idea of being second lien holder to the city on the financial instrument.  In some places, according to Merrian Fuller of Lawrence Berkeley National Laboratory, banking associations have challenged state enabling legislation.  As a result, most communities are taking precautions, e.g., limiting the assessment size, notifying lenders, and in the case of commercial property requiring lender sign-off.   If this is a trend, it’s worth monitoring, for although the law has, to date, been on the side of PACE programs, it would be a tragedy if today’s banking industry were to pour cold water on tomorrow’s prospects for  affordable solar.

The Energy Efficiency & Renewable Energy web site also contains links to these webcasts that DoE has given:

Introduction to PACE financing programs

Legal issues re PACE financing programs

Getting Started: legal authority & administering PACE financing programs

Another valuable tool is the University of California at Berkeley’s Guide to Establishing a PACE Program, a “how-to” for municipalities and regions.

Why are we providing all this information?  Because if you’re a local government official, you may want to jump on this accelerating bandwagon that’s such an obvious crowd-pleaser (and here’s how to ask for DoE’s help:  FinancingRapidResponse@ee.doe.gov. )  If you’re a solar citizen who thinks (rightly) that this is the best thing since sliced silicon, you can present all this information to officials at your next public meeting and ask if they plan to get on board.

And don’t take no for an answer!

*California, Colorado, Florida (under existing law), Hawaii (under existing law), Illinois, Louisiana, Maryland, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and Wisconsin