It took the better part of a decade to come but, finally, Property Assessed Clean Energy (PACE) financing is now  available for residents in select cities throughout  San Diego County by which property owners can finance solar power systems through property taxes with no up-front costs.  This is a significant development as it helps property owners overcome the barrier of upfront energy investment costs.  The local government sponsored PACE program is repaid annually through a tax assessment and the interest is tax deductible. This allows homeowners to tie their solar investment to property taxes rather than taking a personal loan and the investment stays with the property when a homeowner moves. Additional energy efficiency products that can be permanently affixed to a property and reduce on-site electric, gas or water consumption are also eligible, including attic insulation; heating, ventilation and air conditioning replacements, solar thermal systems; and low-flow toilets.  In San Diego County, the PACE program is being offered by Hero Financing and Figtree Finance.

Three Benefits to PACE Financing

PACE overcomes barriers to the adoption of clean energy that conventional financing options cannot. First, by offering 100% financing on qualifying improvements, PACE eliminates the need to pay out of pocket for your project. Secondly, repayment usually is amortized over 20 years, keeping your monthly payments low enough that your utility savings may exceed your payment, creating a net positive cash flow from day one. Finally, by utilizing your property tax roll and collecting repayments as part of property tax payments ties the loan to the property, not an individual, and therefore may transfer upon sale or refinancing of the property. In other words, you don’t need to worry about recouping the cost of your improvements if you decide to sell before the loan is repaid.  Moreover, homeowners are still eligible for the 30 percent federal tax credit.

How to Use PACE

The San Diego Energy Center offers a number of FAQs about PACE financing.   The City of San Diego and the cities of Oceanside, Santee, San Marcos and Vista have recently opted into FIGTREE’s PACE financing program, joining Oceanside and Escondido.  If you are considering installation of PV on your home, this financing option should be seriously considered.