Pace Financing

Property Assessed Clean Energy (PACE) Financing

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.

So why is PACE good for you?

  • For starters, the program doesn’t require shelling out any cash upfront or reducing equity in your home.
  • Secondly, property tax financing solves the problem of “what happens when I sell my home?”  The simple answer is that the solar power system and whatever tax liability you have both go to the new owner of your home.
  • Third, it’s backed by the city, so people know they won’t get scammed, and the financing is obviously secure.

When did PACE get started?

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 solar systems 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.

How does PACE work?

  1. The city partners with a company to administer the program.
  2. The program is then usually funded with municipal bonds.
  3. The homeowner gets a site evaluation for solar power or energy efficiency improvements with any company they choose.
  4. Once a quote is given, the property owner applies with the city program administrator. A small fee covers the cost of the municipal solar financing program administration and discourages frivolous applications.
  5. Once the homeowner’s solar system 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 solar installer. There is no upfront payment for the homeowner, except possibly a deposit.
  6. The property owner pays it off on his or her property tax bill over 20 years, at a competitive rate of interest.
  7. If the home is ever sold, the solar system goes with it along with any tax liability.

Where can I go for more information?

There’s more detailed information on PACE in specific cities at Check it out!