Property Assessed Clean Energy (PACE) financing is in the spotlight again. Right now, two pieces of state legislation that could impact Californians’ access to PACE financing are in committee hearings. After careful consideration, Build It Green (BIG) has joined a coalition of environmental nonprofits and clean energy organizations that strongly support the first bill, SB 242, which would strengthen consumer protections for homeowners; but we would oppose the second bill, AB 271, which could fundamentally undermine PACE.
Build It Green believes that PACE has established itself as one of many strong financing options for consumers. It is a powerful tool that has helped homeowners finance billions of dollars in energy efficiency and clean energy upgrades. We also recognize that industry stakeholders—from contractors to real estate professionals—have a range of viewpoints about PACE. Build It Green sees itself in a connector and facilitator role, to help bring together different groups in our professional network for constructive dialogue, to share their questions and eliminate misinformation. To that end, we have been working closing with California’s real estate community on PACE.
Read on for more information about why we support SB 242 to strengthen PACE, and consider contacting your state legislators to share your opinion.
What Is PACE and Why Does It Matter?
PACE is an idea first born in California in Berkeley in the mid-2000s, and quickly embraced by many state and local governments. PACE financing enables individual property owners to obtain long-term financing for energy efficiency, seismic retrofits and other property renovations; it is repaid as an additional line item on the property’s regular tax bill.
In addition, PACE plays an important role in California’s plan to meet our greenhouse-gas reduction goals by promoting greater adoption of energy and efficiency technologies. PACE-financed home improvements will significantly reduce California’s carbon dioxide emissions, cut homeowners’ utility bills, and conserve water.
PACE is a job creator as well. It is estimated that PACE financing has created more than 25,000 local, clean-energy jobs that cannot be automated or off-shored, while also pumping more than $5 billion into local economies across the state.
As it has matured, the PACE industry has repeatedly shown a willingness to strengthen its consumer protections. Most recently, the industry’s work with state lawmakers last year on AB 2693 (Dababneh) resulted in the passage of the most comprehensive PACE consumer protection and disclosure law in the nation.
About SB 242
SB 242, proposed by Senator Nancy Skinner (D-9th District), seeks to build on the protections created last year by AB 2693. Senator Skinner’s bill would enact a comprehensive set of program requirements that will further protect homeowners and ensure the integrity of PACE assessments.
Specifically, SB 242 calls for PACE providers to confirm financing terms via live telephone calls with homeowners; consider income and monthly obligations to underwriting; create a forbearance protocol for homeowners who demonstrate they cannot make a payment; and refrain from providing a contractor with an estimated approval amount for a homeowner. These measures will bolster PACE’s existing consumer safeguards and ultimately strengthen this important financing resource. If you agree, contact your state senator and express your support for SB 242. BIG supports this legislation, along with the following organizations:
About AB 271
While we appreciate the diligent work of Assemblywoman Anna Caballero in crafting the second bill, AB 271, we are concerned that this bill would impose regressive changes that will eliminate current consumer protections and fundamentally undermine the PACE program. Removing PACE from the secured tax roll, as AB 271 proposes, would remove the enforceability of the obligation. This would ultimately increase the costs to local governments and homeowners and have the unintended consequence of increasing foreclosures. For these reasons, we oppose AB 271. If you agree, consider contacting your legislators.