An innovative financing method is helping thousands of homeowners across San Diego County to lower their utility bills by installing solar panels, insulation and high-efficiency heating and cooling systems. Their home improvement projects became affordable by using a loan program called PACE, for property assessed clean energy.
PACE programs allow property owners in participating districts to finance up to 100 percent of their energy efficiency, water efficiency or renewable energy projects. What makes PACE different is that property owners pay back their loans over time as assessments through their regular property tax bills.
Since launching in 2014, residential PACE programs in seven local cities – Carlsbad, Chula Vista, Lemon Grove, Oceanside, San Marcos, Solana Beach and Vista – have provided more than $48 million in home energy upgrades.
New residential PACE programs are expected to launch this month in the city and county of San Diego, Escondido and El Cajon, with several other jurisdictions joining in by the end of the year.
“We’re seeing strong interest in PACE financing in the San Diego area,” said Susan Davison, a CCSE building performance project manager. “PACE enables homeowners to make decisions to upgrade their homes with loan repayments that fit within their budgets.”
Depending on the type of improvements installed, PACE loans can be amortized for a period of up to 20 years. Because utility bill savings often exceed the PACE payment, it can result in an immediate positive cash flow. An additional benefit is that the interest may be tax deductible depending on the homeowner’s tax status.
The community also sees a benefit from PACE-financed home improvement projects because the construction and installation work stimulates the local economy.
“PACE will help to create local jobs while providing energy and water savings for San Diego residents,” said Dustin Reilich, director of municipal development for the HERO Program, one of four PACE providers. “It’s a win-win for the whole community.”