The U.S. Department of Energy (DOE) has released updated guidelines for residential property-assessed clean energy (PACE) financing, and industry stakeholders have welcomed the new best practices, saying they believe the guidelines provide an important framework for expanding the financing model nationwide.
The DOE says that since 2009, more than 100,000 homeowners have made energy-efficiency and renewable energy improvements, including installing solar, to their homes through residential PACE programs. By 2016, residential PACE programs had allowed homeowners to invest nearly $2 billion in energy-efficiency, solar and other upgrades to their homes. Homeowners have made these energy upgrades with no upfront costs by electing to repay their loan through a special assessment along with their property taxes.
According to the DOE, the new guidelines outline best practices that can help state and local governments, PACE program administrators, contractors, and other partners develop and implement programs and improvements that effectively deliver home energy and related upgrades. The updated best practices reflect input gained from over 200 comments on a draft of the guidelines that was released for public review earlier this summer.
In the guidelines, special emphasis is placed on recommended protections that PACE programs should put in place for consumers who voluntarily opt into the service, as well as for lenders that hold mortgages on properties with PACE assessments. The DOE says it also provides additional program design recommendations that address the unique needs and potential vulnerabilities of low-income and elderly households, to help ensure that PACE financing is used appropriately and at the least cost for low-income households that otherwise meet program eligibility criteria.
In combination with guidance for lenders from the Federal Housing Administration and the U.S. Department of Veterans Affairs, these best practices will help enable more states and communities to develop and implement residential PACE programs. Although the guidelines are non-binding, the DOE recommends that state and local governments incorporate them into existing or planned residential PACE programs.
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