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Published on February 1st, 2013 | by Andrew

7

Riverside County’s Property Assessed Clean Energy Program Tops $100mm, Goes State-Wide

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February 1st, 2013 by
 
Homeowners are helping fuel the transition to a clean energy economy, conservation, and more efficient use of energy, water, and other natural resources. Home to the most successful Property Assessed Clean Energy (PACE) program in the nation, California’s Riverside County has announced that its HERO (Home Energy Renovation Opportunity) Program financing is now available throughout the Golden State.

Launched in December 2011 by a partnership made up of 17 cities, Riverside County, Renovate America, SAMAS Capital, Public Financial Management, and David Tausig and Associates, nearly 6,000 homeowners have applied for HERO financing. More than $100 million has been provided for successful applicants to carry out home clean energy and energy efficiency projects, according to the HERO program partnership.

Photo Credit: GRID Alternatives

Financing Home Clean Energy & Water Upgrades & Retrofits

It was just back in late September that the Western Riverside Council of Governments (WRCOG) announced that $40 million in home energy retrofits had been financed via the HERO program.

Now expanding state-wide, WRCOG’s HERO Program is based on the principles set out in California’s AB811, “which allows property owners to pay for permanently affixed energy and water efficient products and renewable energy systems over time through their property taxes.” Eligible projects include Heating, Ventilation and Air Conditioning (HVAC) systems, insulation, water heating, and solar PV systems, the partnership explains.

Municipal bonds are issued and loans made from banks participating in HERO and other PACE programs to finance residential clean energy, energy efficiency, and water conservation projects. To repay them, homeowners agree to pay more in property taxes over varying periods of time, from 5 to 20 years, with interest payments tax deductible. The payments can be transferred if the home is sold before all payments have been made.

“The rapid expansion of the HERO Financing Program shows us that this is the right program at the right time for our residents,” City of Calimesa Council Member Jim Hyatt commented. “Homeowners are ready to make these investments, and convenient access to affordable financing seems to be making a difference in encouraging homeowners to move forward with these types of projects.”

“Cities and counties that are looking to provide a residential and commercial PACE solution can now do so through HERO. The Program can co-exist with other PACE programs or serve as a stand-alone solution for cities and counties,” added Renovate America’s Mark Rodgers.

The PACE program has also been a boon to local contractors and economies. More than 530 Riverside County contractors have signed on as program participants to date.

“HERO Financing has been a huge part of the growth my business has seen over the past few months. After years of having customers make upgrades only when absolutely necessary, I have been pleasantly surprised to see homeowners coming out of the woodwork to make the changes they have long dreamed about,” Synergy Companies’ Glen Rusche elaborated.

Also adding to the momentum behind growing residential and small-scale solar deployment, New York Governor Andrew Cuomo in January announced the state government will provide $150 million a year for the NY-Sun initiative, the goal of which is “to quadruple customer-sited solar capacity in New York State,” sister site Red, Green & Blue recently reported.

“Solar is the fastest-growing energy source in the US, up 500 percent” since President Obama took office, rising from 1,100 megawatts (MW) to more than 6,400 at the end of Q3 2012, Solar Energy Industry Association senior VP Carrie Cullen Hitt noted, adding that the US solar industry now employs more than 119,000 workers at 5,600 companies, mostly small businesses.

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About the Author

I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.



  • http://www.facebook.com/matthew.t.peffly Matthew Todd Peffly

    So what happen with Fanny/Freddy did they back down from their attempt to kill PACE programs? IMHO, PACE is one of the bast way for local government to get a lot of energy/water improvements done to property in their tax base, plus push local jobs. The only cost is the risk of default, and a little checking before hand keeps that very low.

    • http://zacharyshahan.com/ Zachary Shahan

      It’s all still in limbo. Ridiculous, since energy efficiency and solar improvements are incredibly low risk.

  • Otis11

    So we have permanent fact pages for solar, wind and clean energy on the side bar, any chance that we could get an overview of energy-efficient improvements?

    Been trying to sell my parents and brother on upgrading their homes (mainly double pained windows, more insulation and an HVAC system that’s not from the 90s – but I always run into the argument, “But I might not live here in 5 years” after I show them that they are all cost effective and have a better 5 year return than most other investments. Having a collective page of incentives/opportunities like what are in this article could be very helpful in that.

    Anyway – thanks for a great read. Efficiency is often the most overlooked answer!

    • Bob_Wallace

      There’s some good stuff on the web about payback time. It could make for a good article and, perhaps, a sidebar feature.

      One thing to consider in addition to payback time is what the improvement might add to the resale value if you did sell before full cost recovery. Some places include energy costs in the listing. And a feature like double pane windows might make the difference in which house some buyers pick.

      There was a study a couple years back on resale price for California homes which had installed solar systems. Turns out that those houses sold at a price premium which was greater than the cost of the solar system.

      • Otis11

        Yeah, I found the stuff about payback times and managed to put together a fairly decent argument for upgrading, but the effect on resale value was not documented significantly enough to make a concrete argument (or not enough that I could find anyway – but then again I don’t have the background many people here appear to have).

        And having resale value greater than the system? I can believe that – lots of people would pay a premium not to have to do the work to find the best contractor, figure out how to claim it on their taxes, etc, etc, and even more don’t know what they cost anymore (as it’s been dropping so fast).

        • Bob_Wallace

          I’ve lost the link to that earlier study that found that sellers were gaining more than the cost of the system. I think it was done by a realtors group and it was a few years back.

          Here’s an article about a larger, more recent study which finds that installed solar was averaging about $5.50/watt in increased sales price.

          Given that the seller had already pocked the 30% federal subsidy that meant breaking even if they paid ~$8/watt. And the state and local subsidies would have made an even higher installation price worthwhile.

          http://green.blogs.nytimes.com/2011/04/21/study-finds-solar-panels-increase-home-values/

    • http://zacharyshahan.com/ Zachary Shahan

      Good call. I was actually in a similar situation recently, but with my best friend from college. Had nowhere to direct him. We’ve got an energy efficiency expert on our Important Media team — might be something he’d be up for.

      Thanks for the idea.

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