There’s a lot of buzz around a new concept alternatively called the PACE program, or property assessed clean energy. Basically, it’s a way to finance solar systems or energy efficiency retrofits, where the city offers you a loan, and you pay it back through your property tax bills over 15 to 20 years.
For starters, the program doesn’t require shelling out any cash upfront or reducing equity in your home.
It all started with Berkeley and the “Berkeley First Program.” A company called Renewable Funding developed a system for financing home solar energy systems and energy efficiency improvements by partnering with a city and adding the cost of the HVAC or improvements onto the homeowner’s property tax bill, amortized over twenty years.
The program was absurdly popular when it launched, and now, about a year later, cities are starting to run pilots of this program left and right. California has also passed AB811 to let any city that wants to do this go for it.
- The city partners with a company to administer the program (or the city decides to do it themselves).
- The program is then usually funded with municipal bonds.
- Once a quote is given, the property owner applies with the city program administrator. A small fee covers the cost of the municipal HVAC financing program administration and discourages frivolous applications.
- Once the homeownerâ€™s HVAC is approved by the city, the program administrator pays the installer for the system that the homeowner purchased. The check is forwarded directly to the HVAC installer. There is no upfront payment for the homeowner, except possibly a deposit.
- The property owner pays it off on his or her property tax bill over 20 years, at a competitive rate of interest.
There’s more detailed information on PACE in specific cities at energy.gov. Check it out!
You can also speak to one of our expert HVAC advisors who will provide you with all the PACE information you need.