PACE Financing

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PACE financing is a program that enables homeowners to pay for energy efficiency or renewable energy upgrades to their home with no upfront or out-of-pocket expenses. Municipal bonds offered by states, towns, or financing businesses fully support approved energy efficiency initiatives, including photovoltaic residential solar power systems. The cost of the developments is then added to a property tax assessment and reimbursed over a 25 or even 30-year period.

PACE was previously known as a "Special Energy Financing District" and was first launched in 2008 as the BerkeleyFIRST climate program in Berkeley, CA, as the brainchild of Cisco DeVries, the mayor's chief of staff at the time. Although the program was welcomed and viewed as a viable solution to assist California in meeting its long-term energy efficiency goals, it was thwarted in 2010 when the FHA refused to back mortgages that were part of the pace program. Because of the FHA's perspective, PACE has only benefited the commercial market. That has recently changed, and on August 24th, 2015, Ed Golding, the FHA's Head, acknowledged the benefits of the PACE program and issued the following statement:

“PACE allows homeowners to benefit from the improvements immediately and spread the cost over time. When the property is sold, the PACE loan may transfer to the next owner who is responsible for repaying the loan. The ability to transfer the loan to the new owner allows for both the payment and the value of the retrofit to be transferred from one owner to the next.”