Offered through the California Statewide Communities Development Authority (CSCDA), the CaliforniaFIRST residential PACE program will launch this summer in 17 California counties and 167 cities, making energy and water efficiency projects more affordable and accessible for millions of California homeowners.
Under the CaliforniaFIRST program administered by Renewable Funding, homeowners will be able to choose a contractor and install a custom-tailored clean energy project — including the purchase and installation of HVAC systems, solar panels, low-flow toilets, home insulation, windows and roofs. Through PACE, local government agencies sell bonds to finance the projects, with the investors’ repayment secured through a special tax assessment levied on the property and repaid by the homeowner through the property tax bill over the course of up to 20 years. This allows property owners to save on energy costs while they pay for their green initiatives over time rather than upfront.
Earlier this month, Gov. Jerry Brown and State Treasurer Bill Lockyer announced key actions to create a $10 million mortgage loss reserve program, administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), which Treasurer Lockyer chairs. In the event of a home mortgage default, the loss reserve program will protect mortgage holders from losses associated with a PACE lien on the property. In addition, the reserve will cover past due PACE assessments in the event the county sells the property for unpaid taxes.
The PACE financing mechanism was first pioneered by the city of Berkeley for its residential owners in 2008. The promising residential energy upgrade platform ran into regulatory headwinds in 2010. PACE programs for commercial properties successfully launched after that time in local jurisdictions in California and across the United States.
Numerous studies, including the Johnson Controls annual Energy Efficiency Indicator, and market analyses in recent years have pointed to the lack of attractive financing options as one of the key barriers that prevent owners from making deep energy efficiency upgrades on their buildings. With CaliforniaFIRST, many people view California as having the greatest potential to unlock the promising energy efficiency market.
CaliforniaFIRST is a program of CSCDA which was created in 1988 to provide California’s local governments with an effective tool for the timely financing of community-based public benefit projects. CSCDA is sponsored by the California State Association of Counties and the League of California Cities.