Just when we thought that property assessed clean energy (PACE) programs were down for the count, there are signs of life these innovative programs for financing homeowner solar energy projects may yet again become available. PACE programs were sweeping the country, after having been innovated in Berkeley, California. The idea was simple. If you wanted to finance your solar panel system on your home, then all you needed to do was to agree to a special assessment on your property and then pay off the price of the system with your property taxes. If you moved, the new homeowner would assume responsibility for the assessment, just like any other assessment on the property.
There was just one minor problem: Fannie Mae and Freddie Mac strenuously objected to having this tax assessment be superior to their loans on the home. If you got a second mortgage on your home to finance your solar energy system, then the first mortgage of course would be paid off first if there were ever a foreclosure. But if you put the solar energy system on a PACE program, Fannie Mae and Freddie Mac would have the second position.
The Energy Collective summarizes the two key advantages to PACE programs: "First, these programs are designed to have a direct payback that is easily measurable over time. While rebates and other subsidies drive demand and generate electricity savings (not to mention saved environmental and social costs), those benefits are hard to capture, and more importantly, to quantify over a set period of time. PACE programs have a predictable, measurable payback for the public's investment. Second, PACE programs are less likely to become muddled in disputes over ‘choosing winners and losers', as we've grown accustomed to after Solyndra and Evergreen Solar. Most states in which PACE financing would even be possible already have a list of qualified installers for other incentive programs, and because the incentive goes straight to the homeowner (not a solar company), the community that seeds the funding has greater security in their collective investment."
The Federal Housing Finance Agency has now issued a proposed rule and invited comments regarding mortgage assets affected by PACE programs. According to the RegBlog, the proposed rule will make it "more difficult to obtain loans from their local governments for energy saving home improvements." GreenTechMedia reports that "PACE backers from the industry and the nonprofit world are promising to make their views known." And the article also points out that the "FHFA's ruling doesn't apply to commercial mortgages." This has "allowed cities and counties to form special districts that promise building owners the key benefit of PACE: tying investments to the property, not the owner. That way, it costs them nothing. In fact, if the energy savings outpace the quarterly tax payments, it's actually making them money."
Cleantechnica encourages its readers to weigh in on the argument by commenting on the proposed rule and "fight misinformation, develop the record with supportive facts, and make the case for PACE on the merits." It also points out that there is a pending bill HR 2599 with bipartisan report that "would put PACE back on track."
The Energy Collective article concludes that " it looks as though PACE might not be completely phased out just yet..."
Related Solar News Articles:
PACE Program Challenges Grow
PACE Will Not Go Down Without a Fight
New Life for PACE