PACE Heats Up San Diego’s Economy

Originally published on the ECOreport.

After two years of operation, any concerns that the public held about PACE appear to be a thing of the past. County Supervisors Dianne Jacob and Dave Roberts recently held a press conference to describe how PACE heats up San Diego’s economy.

More than $300 million in local energy improvements, including water-efficiency projects and rooftop solar panels, have been funded through HERO, California First, and Ygrene PACE since since the spring of 2014, and as many as 2,800 people have been employed.

“Solar is now estimated to be a $1 billion industry in San Diego County,” said a county official. “The county expects to issue 9,000 solar permits during the current fiscal year. A significant number of those are expected to be PACE related.”

“It’s good for the economy. It’s good for the job market. And it’s good for ratepayers tired of big, fat utility bills,” said Dianne Jacob, vice-chair of San Diego County Board of Supervisors.

“At my own house, we used PACE financing to rip up 6,000 square feet of water-guzzling lawn and replace it with artificial turf,” Roberts said. “Almost two years later, we have saved thousands of dollars and thousands of gallons of water.”

No Problems with PACE

When the Property Assessed Clean Energy (PACE) loan program was first conceived in 2008, it seemed like the perfect vehicle for enabling the spread of solar energy. Except that as homeowners pay the loan back through their property taxes, it is a tax and takes precedence over mortgages in the advent of a foreclosure. Consequently, in 2010 Fannie Mae and Freddie Mac refused to approve mortgages to homes with PACE liens on them.

Jacob was a member of the Board when it talked about PACE in 2008. This was one of the issues that prompted Roberts to become a County Supervisor in January 2013. At its joint instigation, San Diego performed an analysis of PACE financing options early that year.

There were some concerns about the effect PACE liens might have on homes with mortgages, and the Board of Supervisors did not approve the program until April 2014, months after California passed legislation calling for the formation of a PACE mortgage loss reserve program to address concerns raised by mortgage entities.

San Diego has not experienced any problems with PACE programs.

“Our office heard some initial concerns and complaints, but those have quieted. My understanding is that there was a considerable learning curve initially among some realtors, and that may have spurred some of the concerns. We’re not hearing those now,” said a county official.

A Thriving Solar Industry

“In San Diego we have a thriving solar power industry that is ready and eager to move San Diego away from fossil fuels, and PACE plays an important role in that transition,” said Tara Kelly, director of community development at Sullivan Solar Power and chair of the San Diego chapter of the California Solar Industries Association. “As electricity costs continue to increase, PACE offers a cost-effective mechanism to empower consumers to embrace the renewable technology of today to ensure a better future for tomorrow.”

All images courtesy of San Diego Board of Supervisors. Figures in top photo: Supervisor Dianne Jacob (at podium, in blue blouse) Immediately behind her, l to r: Supervisor Dave Roberts (grey suit), Tara Kelly, chair of the San Diego chapter of the CALSEIA; J.P. McNeill, CEO of Renovate America which operates the HERO PACE program; A Sullivan Solar Power employee