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Since 2009, more than 100,000 homeowners have made energy efficiency and renewable energy improvements to their homes through residential Property Assessed Clean Energy (PACE) programs, representing nearly $2 billion in investments. Qualifying homeowners in states that offer PACE financing have made these energy upgrades with no upfront costs, electing instead to repay the costs over time through a special assessment on their property tax bill. With PACE, homeowners are installing high-efficiency equipment and products, including ENERGY STAR qualified heating and cooling systems, as well as other clean energy technologies that can reduce their energy consumption and lower costs, while improving their home’s comfort, health and safety. Homeowners in California, Florida, and Missouri currently have access to PACE, but other states and localities are actively working to develop their own programs.
This week, as part of the Obama Administration’s Clean Energy Savings for All Initiative, the Energy Department released updated Best Practice Guidelines for Residential PACE Financing Programs, which aim to bring the benefits of PACE financing to more homeowners. The guidelines outline best practices that can help states, local governments, PACE program administrators, and their partners develop and implement programs and improvements that effectively deliver home energy and related upgrades. Special emphasis is placed in the guidelines on recommended protections that PACE programs should establish for consumers who voluntarily opt into the service, as well as for lenders that hold mortgages on properties with PACE assessments. The guidelines also provide additional guidance and program design recommendations that address the unique needs and potential vulnerabilities of low-income and elderly households, to help ensure that PACE financing is used appropriately and at the least cost for low-income households that meet program eligibility criteria.
Revisions to the guidelines incorporate lessons learned from the experiences of state and local governments that have implemented PACE programs since 2010. These updated best practices also reflect input gained from over 200 comments submitted by 30 organizations or individuals on a draft of the guidelines that was released for public review earlier this summer.
In combination with guidance for lenders from the Federal Housing Administration and the U.S. Department of Veterans Affairs, these best practices will enable more states and communities to develop and implement residential PACE programs. As the PACE market continues to grow, the Energy Department recommends that state and local governments incorporate these guidelines into existing or planned residential PACE programs, engaging local stakeholders to ensure these programs remain a sustainable model for financing energy upgrades that meet community goals. DOE will be working with interested parties to help them adopt these best practices.
For more information, visit the State and Local Solution Center to learn about PACE financing and the revised guidelines.