First, how does PACE work? Or at least, how has it worked in the United States?
Municipalities set up special clean energy finance districts capable of issuing low-interest bonds. Participating homeowners can opt to use the bond money to pay for renewable energy and energy efficiency improvements, and then pay the loan back through a long-term assessment on their property taxes. This arrangement spreads the cost of a new clean energy project (e.g. solar PV installation) out across a 20-year payment plan that is easily transferable to the next property owner – a particular benefit for solar PV projects which may have extended payback periods. The cost of that assessment has typically been less than the power bill savings generated by the improvements. It’s a budget-friendly way that cities can empower property-owners to invest in a local clean energy future.
It is worth noting that this finance model can - and we believe should - be used to finance a host of technologies: solar PV systems, solar hot water systems, energy efficiency installations, and even water conservation upgrades.
The following is a list of some resources that may be useful in better understanding PACE:
- PACE Programs - Considerations for the Financial Community White Paper: A deeper dive into opportunities, benefits and strategies for success including considerations for the financial community by Vote Solar, NRDC, PACENow.org and Renewable Funding LLC.
- PACE FAQ: A general fact sheet exploring common questions about PACE.
- Bonding and Tax Specific FAQs: A fact sheet addressing PACE’s financial mechanics.
And there is reason to believe that this mechanism can work extremely well in Canada. As was mentioned to me at the OSEA conference, Canadians simply are not over-leveraged on their mortgages the way their Yankee neighbors are. This makes this mechanism an even more secure route to achieving renewable energy and energy efficiency success.
We look forward to hearing of more success from our neighbors to the north. Be sure to follow us here: www.votesolar.org
Shaun Chapman serves as the East Coast Campaigns Director of the Vote Solar Initiative, a position he has held since February 2008. He is author of numerous articles on solar PV policy at the state and federal level.
The Vote Solar Initiative was founded after a successful effort to pass a San Francisco ballot initiative for solar on city-owned buildings in November, 2001. Vote Solar works at the state, federal and local level to implement programs and policies that allow strong solar markets to grow - and pave the way for a transition to a renewable energy economy.