David Downs still carries around his electric bill from last June, eager to bring it up at any opportunity. It may seem like an odd conversation piece, but one peek shows why it comes in handy in his line of work selling residential solar panels. The total: $1.79. Sure, everyone would love a bill like his. But affording solar panels like those on the roof of his Ballwin home has long been the problem. “People think about solar like a luxury sports car: Everyone wants one but they think it’s too expensive,” says Downs, a sales representative for StraightUp Solar in St. Louis.

Indeed, whether it’s mounting rooftop solar panels or buying a high-efficiency heating and cooling system, one paradox of eco-conscious home improvement is that it’s usually only available to those who can afford hefty investments — and not the less-wealthy homeowners in greater need of the savings those projects make possible.

But that’s starting to change.

In some communities around St. Louis, as well as in select states around the country, creative financing mechanisms based on property value are now making upgrades accessible to those for whom traditional upfront payments of cash or credit aren’t an option.

“(Solar) is no longer for people who just have a ton of money,” said Mark Walter, a Kansas City-based sales manager for US Sun Solar, a Missouri company that performs household solar installations and energy efficiency projects facilitated by financing tools known as Property Assessed Clean Energy, or PACE programs.

“PACE has been really helpful for us in unlocking a market of people who can’t access traditional financing,” Walter says. “Now that you can use home equity to finance solar, you don’t have to have gobs of cash and a super credit score.”

PACE has been on the table in Missouri since gaining legislative approval in 2010. It was first applied to small commercial projects, and only in the last several months have the programs finally been extended to residential Missouri properties, as local counties and municipalities grant them necessary authorization.

In September, Jackson County, in the Kansas City metro area, became the first place in Missouri to offer PACE to residents, and since November, communities in St. Charles County, St. Louis County, Franklin County and Jefferson County have been among those to follow suit.

Currently, the lone broker of residential PACE financing in Missouri is Renovate America, a California-based company that operates the Home Energy Renovation Opportunity, or HERO, program — the largest home PACE program in the country. Next month, however, a competing PACE program called Ygrene will also begin operation in the state.

The programs enable property owners in participating communities to pay for certain improvements through a bump in property taxes, typically spread over a five- or 20-year period. Instead of shouldering the upfront cost, homeowners under the HERO program, for instance, are eligible for lending of up to 20 percent of their assessed property value. That often provides more than enough for energy efficiency investments or even solar arrays, which can commonly cost $26,000 to $28,000, depending on the size of the home. PACE programs can also cover household projects that promote water efficiency and even hurricane preparedness in places such as Florida.

“What you’re essentially doing with PACE is you’re agreeing to an assessment on your property,” Downs said.

Besides collecting higher property taxes, PACE proponents say benefits to local communities include an economic boost for area contractors, as well as the increased spending power that households free up through energy savings.

Some resistance

But PACE has faced some complications that have stalled the growth of its residential markets.

PACE investments are tied to property, not individuals, and take precedence over mortgage repayment in the event of foreclosure. That had deterred the Federal Housing Administration and large housing lenders such as Fannie Mae and Freddie Mac from approving loans for homes that use PACE financing. Freddie Mac still won’t, but the FHA partially reversed its policy last July, and Fannie Mae will only do business with homes that have outstanding PACE loans if special conditions are made to prioritize repayment differently.

That hiccup is one reason only three states — California, Florida, and now, Missouri — have active residential PACE programs, while 16 have them for commercial properties.

But those in the business are confident it will continue to expand in Missouri and beyond. PACE has been approved in 33 states total, but many have yet to activate or fully adopt the programs, as authorization shifts from the hands of state policymakers to local jurisdictions.

“We’re still in that education phase,” said John Maslowski, the vice president of market development in Renovate America’s Kansas City office. “It’s new. I think for county tax collectors, it’s a little scary.”

Linda Emmons, the tax collector in Franklin County, confirmed that there is concern among her counterparts as they try to understand how PACE changes their roles.

“I think that most of the collectors do not want to do this at all,” Emmons said. “We are to be tax collectors and not really become tax collection agencies for private vendors.”

Beyond the potential administrative complication of tracking long-term PACE payments, Emmons worries that some homeowners may balk at their annual property tax bill once it includes the additional principal and interest tied to solar-panel financing.

“Dealing with people as long as I have — and taxpayers — I just know it’s going to be a shock to them when they see it,” Emmons said, explaining that a $25,000 PACE loan would carry $29,773 in cumulative interest payments at 9 percent over 20 years. “The interest rate at 8 or 9 percent, that’s a little hefty.”

Maslowski says interest rates currently range between 6.9 percent and 8.9 percent in Missouri, and contractors will soon be able to offer lower rates.

Increasingly competitive

Despite the cost of financing, the prospect of long-term savings is drawing attention to PACE since its residential rollout. Maslowski says that, so far, only about $245,000 in PACE-funded projects have been completed at 27 homes in the St. Louis area, out of $4.2 million across 267 total homes in the state. But he said scores of area applications are still being processed.

Only about 10 to 15 percent of that statewide PACE investment, Maslowski says, has been for residential solar projects. The bulk of the money has gone toward projects to shore up household energy efficiency. Targeting the basics, such as insulation, duct work and LED lighting, can amount to reductions in household energy usage of 20 percent or greater.

Of course, even without the help of PACE financing and a 30 percent federal tax credit, plunging prices continue to make solar more competitive with time.

But Downs says PACE gives solar an added boost by breaking down that initial cost, pushing it toward a “new threshold” in which some customers he’s done estimates for could realize first-year savings, instead of waiting years to see a return.

“We’ve never been able to show those proposals before,” Downs said. “We’ve crossed into a new era.”

While such rapid savings would surely win over consumers, Josh Campbell, executive director of the Missouri Energy Initiative and an administrator of the state’s Show Me PACE organization, says local gatekeepers are the ones who will first need to see positive results elsewhere before warming up to PACE programs.

“It’s the Show-Me State,” Campbell said. “Let’s see that they work, see that consumers are protected and then we’ll let it grow.”

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