Property Assessed Clean Energy (PACE) bonds have the potential to transform the energy efficiency and distributed solar energy markets by offering property owners financing to offset the high upfront costs of retrofits and solar systems. PACE financing programs have already been named one of the "Breakthrough Ideas for 2010” by Harvard Business Review and a "World Changing Idea” by Scientific American.
PACE bonds offer real estate owners upfront financing for energy efficiency and renewable energy systems, which the owner pays back through property taxes over a 15-20 year time period.
Originally developed in Berkeley, California the PACE financing model has been spreading rapidly across the United States. In the past 18 months, PACE-enabling legislation has been adopted in 18 states. PACE programs have already been successfully implemented in a number of cities and counties including Berkeley and Sonoma County. Currently, a number of large municipalities including Los Angeles, San Diego, and San Francisco are poised to implement their own programs in the next few months.
Despite the rapid increase in PACE programs, there are still a number of questions surrounding PACE programs. Mortgaging agencies, such as Fannie and Freddie Mac, have raised concerns over the senior position of debt from the retrofit to existing mortgage debt. Solar companies have questioned stipulations in PACE programs which require energy consumption reductions before solar power systems can be financed.
Source: AltaTerra Research Network Read full article here.
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