The Pace Financing Energy Project
Modern society is increasingly struggling with the idea that it needs to significantly reduce its dependency on non-renewable sources of energy.As a result, there have been nation-wide and even global attempts to progressively rely on cleaner and more sustainable renewable energy, with solar energy being at the top of the list.
Nevertheless, this has come with a cost that many home and business owners find difficult to shoulder, which has resulted in the implementation of a solar financing option known as PACE financing.
What is pace financing?
PACE or Property Assessed Clean Energy financing is an initiative that is designed to motivate business and home owners to install renewable energy systems in their commercial and residential properties respectively and in so doing, enhance energy efficiency. The aim of PACE financing is to help properties owners to avoid the pitfalls of high upfront energy installation costs. This is achieved by making the solar energy system affordable by extending the cost of installing the system over a prolonged duration of time.
Primarily, the program successfully permits owners of property to implement renewable energy systems in their properties by borrowing from the local government, and later repaying the borrowings through special assessments, taxes or bills.
Note that there are several cash and financing options to buy solar: cash, leasing options, or PACE.
The 4-Step Process Of How Pace Financing Operates
Ideally meant to cover residential and commercial properties, pace financing works in 4 basic steps;
I. The local government creates pace charges
II. The property owner assesses the initiative, which minimizes energy installation costs
III. The local government offers financing and includes assessment to the property owner’s tax roll
IV. The property owner has up to 20 years to pay the assessment
History of Pace Energy Financing Projects
When the idea of pace financing was initially conceptualized in 2005, it was embraced with open arms across majority of states in America. This is because pace financing not only enhanced clean energy efficiency but also helped property owners to recover the investments they had made in their property. These investments included buying the solar systems, installing, repairing and maintaining them, which they could not recoup prior to the implementation of the program.
By 2008, the pace financing initiative had garnered sufficient support to a record of 28 states, which have currently adopted it. Some of the states that have adopted the program include
- New York
- And Colorado
There are numerous other locations whose PACE legislation is either on progress or on hold including
- New Jersey
- And North Carolina
Despite the great strides made with the initiative, pace financing hit a snag by 2010 when concerns were raised that pace financing debts for residential properties could take precedence over mortgage in case of a default. In fact, the Federal Housing Finance Agency threatened to not only impose limits on residential pace charge but also foreclose all properties operating on residential pace initiative. This resulted in residential pace financing being put on hold in many locations and the focus of the program was directed at commercial properties only.
The snag did not last for long and by the end of 2012, the new extensive utilization of pace financing on commercial properties and the increasing pressure by the American population to access effective clean energy financing solutions gradually stimulated resurgence in the accessibility and uptake of pace financing.
PACE Financing Today
Arguably, the year 2013 is set to be the record breaking year for pace financing, and it is highly expected that there will be as many as 150 million US dollars pace loans allocated to financing solar panels systems on rooftops across America, this year alone. Large international business players such as Clean Fund, Wells Fargo & Co., Ameresco Inc. Simon Property Group Inc and Citigroup are some of the financial heavy hitters giving pace financing a new facelift.
Reliable reports indicates that from the year 2013, pace financing will be on an upward trajectory as more municipalities across the United States embrace pace financing initiatives as a valuable service they provide to the population. The benefits of pace financing programs outweigh their limitations. This might explain the current trend of passing residential, commercial and even industrial pace financing bills in various states that had either not implemented pace financing before or who had, but had placed it on hold following the threats from the Federal Housing Finance Agency.
For more general information on home solar energy, check out http://understandsolar.com