The first thing you notice is the sea of blue tarps. I think PACE can help.
Last week, I spent time in Puerto Rico to explore whether Renew Financial could help the residents of this hurricane-battered island rebuild and prepare for the next storm. Since the hurricane, I’d received calls and emails from many different contacts looking to see if Property Assessed Clean Energy (PACE) – or some variation like it – could be used to finance solar, hurricane mitigation, energy repair, and other critical projects. Not only are there pressing recovery needs, but many want to use this crisis as an opportunity to rebuild Puerto Rico’s energy grid in a much cleaner, more robust, and distributed way.
My trip came together when the Solar and Energy Storage Association of Puerto Rico asked me to visit to speak at a conference and see the situation on the ground for myself. As my flight was on approach to San Juan airport, the reality of the situation was pretty obvious. I could see thousands of blue plastic tarps still covering roof damage on properties. Once on the ground, you can still see the tarps, but the damage is far more extensive than compromised roofs.
Even where the power is back on, many traffic signals are out of service, awaiting repairs to their water-fried electronic controls. Entire commercial areas are completely shuttered. Thousands of people are still without power and many more have not been able to repair damage to their homes or businesses. Reporting indicates that at least 250,000 homes sustained damage and as many as 70,000 homes were destroyed. Even before the storm, Puerto Rico was in financial crisis with an official poverty rate of 44%.
Clearly, the need for repairs – and the capital to pay for them – is enormous.
Can PACE help get this amazing island back on its feet and transition to a more reliable clean energy future? I hope so – PACE could be transformative in Puerto Rico. People in Puerto Rico need reliable power and safer homes but lack the capital to make the improvements. A successful PACE program could help hundreds of thousands of families get solar with battery storage and secure their homes against future storms. We are seeing the power of PACE in these situations right now in Florida and the needs in Puerto Rico are even greater.
There are moves afoot to pass PACE legislation, but that might end up being the easy part. Many homeowners would appear to be ineligible for PACE financing based on the industry’s common underwriting. For example, PACE generally requires that homeowners are current on their mortgages, but in Puerto Rico at least a quarter of all mortgages are delinquent. The unemployment rate is 2.5 times the US average, and probably that is underreported. The government itself is bankrupt and in no position to provide additional guarantees.
This may be a great opportunity for foundation or other philanthropic support. If coupled with a capital backstop by one of the many philanthropies or foundations currently active in Puerto Rico’s recovery, we may be able to put PACE to work in a powerful way.
The people pf Puerto Rico are in the midst of a humanitarian crisis. PACE can help in a big way, but we may have to couple it with some other financial support if we want to have a large impact. As storms become more destructive, we need to figure out new ways to keep families safe and keep the lights on. Perhaps the legacy of Hurricane Maria will not just be widespread misery, but also a model for how we can help millions of working and middle-class families throughout the U.S. be better prepared for the storms to come.
In the meantime, if you want to help with solar in Puerto Rico I recommend solarforpuertorico.org.
I’ll keep working on this. And I welcome ideas or support from others in the industry. More soon, I hope.
