A California leader in funding energy upgrades at homes and businesses is expanding to Florida by purchasing a small partner in the Sunshine State.
Renew Financial of Oakland announced Tuesday that it had bought Florida’s EcoCity Partners, which runs one of the state’s loan programs for Property Assessed Clean Energy, or PACE.
“We think we can replicate the great success we’re having in California very quickly in Florida,” Renew Financial CEO Cisco DeVries said by phone. He figures his company will provide “several hundred million” in PACE loans in California this year, more than triple its volume last year.
PACE lets owners of homes and commercial buildings pay for solar panels, hurricane windows, new air conditioning and other energy-saving improvements — without spending a dime of their own money up front.
The loans are paid back together with property taxes, similar to an assessment. In some cases, the loans pay for themselves, when savings on electric bills are big enough to cover the loan payments.
DeVries came up with the PACE concept when he was chief of staff for Berkeley Mayor Tom Bates. He formed Renew Financial in 2008 to accelerate funding for solar and energy efficient projects nationwide.
EcoCity launched in Florida following Renew Financial’s model and partnering informally with it.
The purchase means that EcoCity leaders, including Erin L. Deady, Amy Elliott and Maureen Eppley, will join Renew Financial.Terms of the transaction were not disclosed.
The deal also calls for Renew Financial to team up with Demeter Power Group of West Palm Beach, a separate venture led by Michael Wallander, an EcoCity principal who will be leaving EcoCity.
Wallander’s Demeter Power recently unveiled a new twist on PACE called “PACE Lease” aimed to fund small businesses that lease their properties and often face hurdles for bank loans for energy upgrades. Demeter’s program should help unlock PACE for small- and mid-sized businesses, DeVries said.
Renew Financial already has a partnership with California’s publicly traded SolarCity panel installer that targets PACE funding for small- and mid-sized businesses, DeVries said.
“The company is in a very aggressive growth phase,” DeVries said of his business, which employs about 150 people. EcoCity offered a “seamless” acquistiion because of its common model and existing partnership. “Florida, we think, is a really exciting market.”
Nationwide, PACE has funded about $1 billion in projects to date, including more than $500 million in California last year. Florida has been slow to roll out its programs, partly because of concerns from the Florida Bankers Association that PACE liens would be paid before mortgages.
But DeVries is optimistic about PACE’s taking off in Florida, partly because of measures announced by President Obama and the Federal Housing Administration in late August. New guidelines call for PACE liens to be paid after mortgages on homes insured by FHA.
Once challenges are overcome, he sees potential for varied PACE lenders to fund energy upgrades on roughly 50,000 to 75,000 Florida homes per year for about $1 billion in loans annually. Projects would include some solar-panel installations but also lots of replacements for air conditioning, windows, roofs and other basics in more efficient formats.
PACE lenders could fund another $1 billion per year in energy upgrades on businesses in the Sunshine State, especially for small- and mid-sized companies, DeVries forecast.
In southeast Florida, the largest PACE lender so far is Ygrene Energy Fund Florida, which works in cities in Miami-Dade County. Ygrene has funded more than $23 million in PACE projects in Miami-Dade since mid-2013, said Joe Spector, vice president of operations.
Broward County has yet to finalize its two countywide PACE programs, to be offered by EcoCity and Ygrene. In Palm Beach County, EcoCity’s biggest PACE loan so far was $2.225 million for energy improvements at a Brandsmart USA store in West Palm Beach..
Originally posted by Sun-Sentinel
