Oakland, CA – Millions of California homeowners and businesses that want to make energy efficiency, renewable energy and water efficiency improvements to their properties will experience an easier process thanks to two new bills recently signed into law by Gov. Jerry Brown.
Renewable Funding, a leading national clean energy finance company, sponsored both bills in partnership with other entities that seek to expand the availability of new finance options known as Property Assessed Clean Energy (PACE) liens, which enable property owners to install water and energy upgrades with no money down and to repay installation costs over time through an annual property tax assessment.
Assembly Bill 1883, authored by Assemblymember Nancy Skinner (D-Berkeley) allows local governments participating in PACE financing to combine multiple projects together in order to issue a more cost effective bond that finances the various projects. Prior to the bill, financing had to be done on a case-by-case basis, which made the costs associated with issuing the bonds prohibitive to many business owners that wanted to make improvements to their properties. The bill was co-sponsored by the Environmental Defense Fund and Alameda County.
Assembly Bill 2597, authored by Assemblymember Phil Ting (D-San Francisco), allows for PACE financing up to 15 percent of property value for the first $700,000 in home value followed by 10 percent of the remaining home value thereafter. The previous cap for financing was set at 10 percent of property value for all properties. This change will help facilitate energy and water efficiency upgrades at lower value properties. The bills were signed into law on Friday, Sept. 26 by Gov. Brown.
“These bills will help make PACE financing available for millions of middle-income homeowners throughout California and make it much easier for businesses to go green,” said Renewable Funding CEO Cisco DeVries. “In addition to allowing homeowners to save energy, PACE can help residents and communities address the crippling drought by financing improvements that dramatically reduce water use.”
Assembly Bill 1883 also makes it easier to finance pre-paid solar leases for commercial properties with PACE. In the residential market, PACE has been a popular tool to finance pre-paid solar leases. AB 1883 will make open up this market for commercial solar providers. The bill also addresses a number of technical issues in PACE financing. By making a number of technical and conforming changes to California law, Skinner’s legislation makes features such as variable rate financing available to PACE programs.
Assembly Bill 2597 was also sponsored by Sonoma County and the Western Riverside Council of Governments. The bill also clarifies that PACE financing is a special tax assessment, rather than a loan, an important distinction that is intended to allay the concerns of federal housing regulators. Earlier this year, California Governor Edmund G. Brown Jr. and State Treasurer Bill Lockyer announced the creation of a PACE mortgage loss reserve program to address concerns raised by mortgage entities. Administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), the loss reserve program will refund mortgage holders from losses associated with a PACE lien on the property.
Renewable Funding in August launched its residential PACE program, CaliforniaFIRST, in 17 California counties and 142 cities in California, with plans to expand statewide by the end of the year. The CaliforniaFIRST Program is a program of the California Statewide Communities Development Authority (CSCDA), a joint powers authority co-sponsored by the California State Association of Counties and the League of California Cities.
More information is available at californiafirst.org
