Solar power with no upfront payment

PACE (property-assessed clean energy) programs that were alive in no fewer than twenty-seven states before they were killed by the overlords of Fannie Mae and Freddie Macnow have a chance of being reborn.
PACE, you’ll remember, are programs in which local government bodies fund, through private investment, energy efficiency and renewable energy improvements on residential and commercial properties; owners then repay the government body through property tax assessments over twenty years, with new owners becoming responsible for unpaid balances on the assessments. In this way, homeowners can have solar arrays, for example, installed with no upfront cost.

A bill was recently introduced in the U.S. House of Representatives aimed at satisfying the concerns of the Federal Housing Finance Agency (FHFA), which effectively strangled PACE programs last year over concerns about superiority of liens. FHFA was, and is, worried that the lien associated with the mortgage would take second place to the lien belonging to PACE money. This, they thought, would jeopardize the bank’s chances of repayment in the event of default. The huge error in this line of thought is that PACE programs aren’t loans at all, but tax obligations. And the most innovative and popular method we’ve seen for financing rooftop solar atrophied for a full year because of this error.

Hope, as they say, springs eternal, and you know where. The new, very bipartisan bill – the PACE Protection Act of 2011 (HR2599) would prevent the FHFA from adopting policies that work against local PACE laws, so long as certain provisions applied to applicants, e.g:

  • the proposed energy efficiency or renewable energy installation could not cost more than 10% of the value of the property;
  • the property owner had more than 15% equity in the property;
  • PACE-financed projects have positive savings-to-investment ratios.

Everything about PACE should appeal to legislators on both sides of the aisle. The programs are based on private capital, not subsidies from ratepayers, government funds or the taxpayer. They’re also based on state and local government initiatives, not federal mandates. And they serve to deploy more distributed clean energy resources, reducing carbon emissions and saving homeowners money.

What’s not to like?

Congresspersons will likely be debating the PACE Protection Act after the summer recess, which makes this a perfect time for letters to be appearing in their hometown papers. Can you write one or more of those letters? We’ve provided some ‘talking points’ on the next page for you to mold into a suitable letter-to-the-editor, calling on your Congressional delegation to vote PACE back to life!

For more information, check out the PACE support site here; and press Go! below to TAKE ACTION NOW! 

Solar power with no upfront payment

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