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MALTA, NY – February 15, 2017 – On Nov. 18, 2016, the U.S. Department of Energy (DOE) released Best Practice Guidelines for Residential PACE Financing Programs. Since 2009, more than 100,000 homeowners have made energy efficiency and renewable energy improvements to their homes through residential Property Assessed Clean Energy (R-PACE) programs. The updated release provides guidance to states and communities looking to implement residential R-PACE programs. The document includes guidance on program design and protections for consumers and lenders. The Building Performance Institute (BPI) provided extensive comments to DOE during the open comment period regarding the need for a trained and certified workforce, strong consumer protections, companies who commit to following quality standards in installation, and the inclusion of health and safety upgrades as qualified measures. BPI is pleased to outline in this paper an approach for communities to take when designing R-PACE programs that are consistent with the revised DOE Best Practices Guidelines and ensure strong consumer protections through the work of a qualified workforce.

States and communities see R-PACE as a mechanism to deliver accessible financing for energy efficiency upgrades, creating local jobs and making homes more comfortable, healthy, safe, and durable. However, R-PACE programs could experience strong, negative consumer reactions if assurances for consumer protections against unscrupulous contractor and lender practices are not embedded into program design. BPI stands ready to work with state and local governments in the design of R-PACE programs that ensure consumer protection.

Residential home improvement has long been riddled with unscrupulous contractors not looking out for the customer’s best interest and performing subpar work that does not get completed. To curtail such activity, many Energy Efficiency (EE) Program Administrators point to BPI credentials and technical standards. The New York State Energy Research and Development Authority (NYSERDA) and the New Jersey Clean Energy Program have included BPI credentials for technicians and contracting companies participating in their programs since their inception. With 62 counties and over 900 towns and virtually no licensing requirement for home improvement contracting in NYS, it made sense to have one entity responsible for administering risk management for the program, and to provide a safety net for its customers. Consumers need assurances that the contractors they select have been vetted to an industry accepted criteria, have the proper business practices and quality management controls in place, utilize trained and certified staff in their installations, and conduct whole-house assessments to recommend prioritized, cost-effective upgrades to homeowners based on home assessment findings. Not putting these safeguards in place sets the stage for unhappy customers, lawsuits, and media backlash. The Wall Street Journal, for example, compared PACE to the subprime crisis.

The DOE Best Practice Guidelines for Residential PACE Financing Programs points to specific areas in which states and local governments should focus when developing their R-PACE program design in order to protect consumer interests and set minimum criteria for contractors, disclosure, quality assurance and standards. The following illustration and sections outline language from the DOE Best Practices documents and specific areas in which BPI capabilities will enhance R-PACE program design

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