Published on February 20th, 2013 | by Zachary Shahan1
PACE Funding In Florida Gets $500 Million Boost
Property Assessed Clean Energy (PACE) funding (or financing) is one of the most attractive solar policies in the world (imho). Very basically, instead of receiving a loan to pay the upfront cost of a solar power system, you have the amount of the system added to your property taxes. You pay off the cost of the solar system over time while you save on electricity (you generally have a 15- to 20-year time period set for incrementally paying of the loan). So, you’re basically saving money from day one while also not giving away the profits of going solar to the bank or a solar leasing company. (Note: PACE financing can also be used toward energy efficiency improvements or other renewable energy projects in many cases.)
The first PACE program was implemented in Berkeley, California in 2008. The idea seemed poised to take off nationally. However, following the US housing crisis and financial crisis, Fannie Mae and Freddie Mac in 2010 decided not to back mortgages with PACE liens on them. Here’s a good, concise summary of the blockade and its “rationale” via Wikipedia:
“Several problems have been raised regarding PACE. Foremost amongst the problems is the issue of involuntary subordination. Property taxes are superior to all other obligations, including mortgages. In case of default, taxes are paid before other creditors. Since the PACE loan is made after a mortgage is taken out, this in effect acts as an involuntary subordination of the lender’s security. While this point is widely disputed, for this reason both FHFA and OCC have issued guidance that has stopped residential PACE finance programs in most locations. Commercial PACE is, however, still being introduced in a number of jurisdictions. Residential PACE financing is available in eight states, California, Colorado, Florida, Maine, Michigan, Missouri, New York, and Wisconsin, and is on hold in twenty others, pending resolution of the Freddie Mac, Fannie Mae objection.“
As you can see in that paragraph above, PACE financing is still available in Florida. Furthermore, as noted in the title, the Florida agency funding PACE projects recently received a nice infusion of cash.
“Florida PACE (Property Assessed Clean Energy) Funding Agency has announced that it has secured up to $500 million in funding through Samas Capital, LLC (Samas) to provide business and residential property owners with financing for energy-related and wind-hardening improvements in counties that choose to participate,” the Florida PACE Funding Agency noted in a press release published earlier this month.
Here’s more info on this specific PACE program:
“Florida PACE Funding Agency was established as a special purpose unit of local government to provide voluntary, low-cost financing to property owners for energy efficiency, renewable energy and wind resistance improvements. Improvements are to be repaid over time by property owners through a voluntary special assessment added onto the owner’s property tax bill. The Florida PACE Funding Agency has the legal authority to issue $2 billion in bonds for the purpose of funding property improvements, without liability, to any subscribing county or city.”
“By using the Agency’s innovative interlocal subscription model, local governments will be able to quickly and easily implement a PACE program without burdening local government staff and without incurring uncertain and enormous costs and liabilities associated with a stand-alone program,” said Mike Steigerwald, Executive Director for Florida PACE Funding Agency. “For property owners, this will mean expedited access to funds for protection of their properties from Florida’s hurricanes, mitigation of rising energy costs through energy efficiency improvements, and increases in property value related to the improvements.”
The press release added that “Samas has been active with PACE financings in California and will bring that knowledge and expertise to Florida property owners through the Agency’s scalable statewide program.”
Of course, through greater demand for construction materials, greater demand for private sector construction and cleantech workers, and the ramifying economic effects, this PACE program and its recent funding boost will help the economies of individual counties and municipalities within Florida as well as the Florida economy as a whole.
Funding for this program is expected to begin within the next 50 days.
For more information or to subscribe to the program, contact Project Manager Jonathan Schaefer at (866) 558-3180 or firstname.lastname@example.org.
Image Credit: Florida PACE Funding Agency
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