Do New DOE PACE Guidelines Do Enough For Low-Income Residents?
Tuesday November 29, 2016
As PACE expands beyond California, stricter consumer protections will be needed.
The U.S. Department of Energy has updated its guidelines for property-assessed clean energy financing for homes, as residential property-assessed clean energy programs begin to blossom beyond California.
In a few short years, the residential PACE market has grown from nearly nothing to more than $2 billion. Most of the projects are in California, but there are also expanding markets in Florida and Missouri.
PACE programs allow investments in water- and energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for both lenders and property owners.
PACE financing can potentially open up a far larger swath of the energy-efficiency market than traditional programs have been able to. For example, in a few short years, PACE has become one of the largest loan programs by volume, according to Lawrence Berkeley Lab, with the Mass Save HEAT Loan program being the other leader.
The DOE guidelines are not binding, and are therefore limited — since they are essentially voluntary. Even if they were binding, they do not go far enough to protect consumers, some consumer groups argue.
At a minimum, PACE loans should have at least as strong of protections as conventional mortgages. States also need to adopt enforceable rules to protect homeowners from abusive sales practices,†Brian Simmonds Marshall, policy counsel at Americans for Financial Reform, said in a statement.
No one argues that the most recent guidelines are not an improvement, however. The guidelines suggest there should be an eligible products list and that the term of the assessment of the PACE loan should not exceed the useful life of what's being installed. The DOE also calls for PACE contractors to recommend basic weatherization as part of their package, which can boost energy savings.
People don't often set out to do energy efficiency,†said Ellen Qualls, VP of communications at Renovate America, the largest residential PACE administrator by far with its HERO program. They set out to do solar or another project, then they'll ge...
