PACE Lost in Ironies.
PACE financing (Property Assessed Clean Energy), a powerful financing tool that helps homeowners repay the cost of energy efficiency improvements and renewable energy systems through a surcharge on their property tax bill, is struggling to emerge from the ironies and inefficiencies of the federal government.
PACE programs in 22 states are on hold as the Federal Housing and Finance Administration maintains it’s position that Fannie Mae and Freddie Mac, which buys and sells most home mortgages, can reject PACE liens to take priority over the mortgage. The liens, like other property taxes, would be paid first if the mortgage default. Additionally, $150 million of ARRA stimulus money allocated for PACE programs, may be spent elsewhere.
In Massachusetts, PACE enabling legislation is making good headway as the success of these programs have been proven nation wide. In MA, The prospect of PACE (as well as Home Star), have effectively motivated the well funded utility RCS programs to prepare for a market driven energy efficiency sector.
The Obama administration have so far unsuccessfully moved the FHFA to reconsider. Congressman Henry Waxman and Congressman Barney Frank appealed to top level officials in a letter beginning:
” We are writing with regard to the innovative energy efficiency financing mechanism Perhaps said best in less than 140 characters: @votesolar: Fannie & Freddie spent last decade handing out mortgages like mardi gras beads. PACE saves prop owners $; now there’s a prob?
known as property-assessed clean energy (PACE) programs. Where these programs are being
implemented they are enabling American cities to reduce their need for energy while reducing
the energy cost burden borne by their residents. We are requesting your agencies’ full
cooperation in establishing guidelines that will allow these programs to continue while protecting
taxpayers and private lenders. ” See full text here The irony is that Fannie and Freddie were bailed-out as a result of a failed business model of doling out mortgages and almost bringing down our entire economy. Now FHFA has a problem with forward thinking communities using a creative and safe financing mechanism to help American homeowners invest in energy efficiency to save money and effectively prepare for an Energy Smart Future.PACE has tremendous potential to not only change how we invest in energy efficiency, but to empower local communities to create programs to deliver the benefits of increased home performance. It is a creative solution to our leaky building stock; a problem fueled by our hunger for quick fixes and cheap oil.
