News and analysis about energy in California with an eye toward renewables.

Commercial Renewable Energy Loans Take Off as Residential Program Stalls

Rooftop HVAC units like these could be upgraded, for instance | Photo: Pacific Northwest National Laboratory/Flickr/Creative Commons License

Property Assisted Clean Energy (PACE) programs may be languishing nationwide due to opposition by federal mortgage agencies, but a version of the program for commercial properties is finally getting under way in California. The CaliforniaFIRST program, launched Tuesday by a consortium of 126 California cities and 14 counties, allows commercial property owners to finance energy upgrades and pay the loan off through their property tax bills.

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PACE loan programs were first instituted for homeowners in Berkeley in 2008, but despite immediate popularity across the country the Federal Home Finance Administration (FHFA) put the kibosh on such programs in 2010 by declining to underwrite mortgages on residential properties that had PACE loans attached. PACE advocates are still waiting for FHFA's final ruling on the matter.

The California FIRST program for commercial properties is administered by the financial services firm Renewable Funding, which also ran the pioneering Berkeley PACE program. Though commercial PACE programs exist in a number of cities, CaliforniaFIRST is the first such program to operate on what is essentially a statewide basis, with participating communities from Yolo County to San Diego. To be eligible for PACE loans under the program, properties must be industrial or agricultural in nature, or residential properties of more than five units.

The program can be used to finance renewable energy, energy efficiency and water conservation projects costing $50,000 or more, with repayment periods ranging from 5 to 20 years. Like their residential equivalents, commercial PACE loans can be structured so that energy and water savings more than make up for the cost of the loan.

The program, overseen by the joint-powers body the California Statewide Communities Development Authority, expects to expand to other cities and counties in short order.

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About the Author

Chris Clarke is a natural history writer and environmental journalist currently at work on a book about the Joshua tree. He lives in Joshua Tree.
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