The San Diego County Board of Supervisors voted this week to make PACE financing more accessible for solar and other renewable energy and conservation investments.
Property Assessed Clean Energy allows commercial property owners to borrow money to invest in solar and other renewable energy projects based on their property values and repay their loans through their property taxes. Business owners can typically borrow up to 10 percent of their property value for energy improvements and solar energy investments.
The programs fell out of favor for residential applications after Fannie Mae and Freddie Mac took issue with them.
However, PACE financing has survived for commercial properties and has started to make a comeback for residential clean energy financing in some areas. The financing model is widely praised for its ease to property owners and has been becoming more prevalent as regional governments pass local legislation making PACE financing easier.
San Diego County had previously allowed PACE financing. But few property owners could meet the $50,000 project qualifying threshold.
The county supervisors voted this week to bring in two third-party PACE financing institutions – Hero and Figtree – to manage the PACE loan program.
The lenders will be able to organize PACE financing for projects costing as little as $5,000, according to a release from Figtree.
PACE doesn’t require any money down and there is no minimum credit score required to qualify. The loan doesn’t impact a borrower’s credit score or ability to borrow other money, according to the release from Figtree. The company can finance projects costing between $5,000 and several million for nearly any kind of commercial property.
The cities of San Diego, Oceanside, Santee, San Marcos and Vista have all opted into the PACE program.
“PACE is another tool in the pro-business tool kit the County is making available to contractors and property owners to create jobs, slash energy costs and improve the integrity of our region’s building stock,” said San Diego County Supervisor Dave Roberts.
Roberts co-sponsored the legislation to improve the PACE option.
“Today’s vote helps put the benefits of solar and energy efficiency improvements within reach of most any commercial property owner,” he said.