Cities and counties across the U.S. are exploring a new solar financing option that helps homeowners tap the sun at no up-front cost. The city translates that daunting cost into a manageable property tax payment that’s spread over 20 years. Known as Property Assessed Clean Energy (PACE) financing, the concept is spreading like wildfire. And here at Vote Solar we are doing our part to a fan the flames.
The city-run solar finance model got its start in California, but cities across the country are quickly proving that it’s not just for left coasters. Just last week Austin became the first city in Texas to pass a resolution to get the ball rolling on a PACE style program. The plan, called Project Energize, would likely replace the solar rebate program that residents can currently use to lower the cost of going solar.
Texas is now one of 14 states (CA, CO, FL, LA, MD, NV, NM, OH, OK, OR, TX, VT, VA and WI) where PACE financing is an option thanks to new state law. Check out the resources in Vote Solar’s PACE Toolkit if you live in one of those states and want to encourage your city to start a program. Vote Solar is also working in the remaining states to pass legislation to ensure that all cities can create a PACE program. Don’t see your state on the list above, and want to help us bring PACE to your state? Click here to take action.
It’s not just local governments that see the value in PACE. Just last week Vice President Joe Biden announced the White House’s support for widespread use of the PACE financing model. Biden sang the praises of PACE financing at a press conference releasing the “Recovery through Retrofit” plan, which details how stimulus funds will be spent to maximize energy savings and spur job creation.
According to the plan, the Department of Energy (DOE) received $80 million in requests from states to use federal recovery funds to support the development and implementation of local PACE programs. DOE is reviewing those requests right now. In addition, the Department of Energy plans to release $454 million more to states as part of a “Retrofit-Ramp-Up” program, some of which will be used to support PACE programs.
Want to know more about how PACE works? Cities set up special clean energy finance districts capable of issuing low-interest bonds. Participating homeowners can opt-in, use the bond money to pay for renewable energy and energy efficiency improvements, and pay the loan back through a long-term assessment on their property taxes. This arrangement spreads the cost of a new solar system out across a 20-year payment plan that is easily transferable to the next property owner if the current resident decides to move. The cost of that assessment is typically less than the electricity bill savings generated by the new solar system.