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Property Assessed Clean Energy Financing

Also known as PACE, Property Assessed Clean Energy Financing provides long term, low rate municipal financing administered through property tax.

What is PACE?

A popular new solar financing program is called PACE or Property Assessed Clean Energy. It provides long term, low cost municipal financing for solar power at your home.

Your local property tax authority, typically the county, raises money by issuing low cost bonds to investors like pension funds, banks and private investors. The local community then provides low cost, long term loans to homeowners who install solar panels or upgrade for energy efficiency. The loans are paid back to the local tax authority.

Benefits of PACE Financing

  • No upfront cost to the homeowner
  • Increases home value
  • Homeowners owns the solar system
  • Homeowner gets federal energy tax credit, utility rebates and renewable energy credits
  • System and tax assessment transfers with the home upon sale of the property
  • Low, fixed rate payments over 20 years

How PACE started

It began with the “Berkeley First Program” in California. A private company called Renewable Funding developed a system for financing home solar energy systems and energy efficiency improvements by partnering with a city and adding the cost of the solar systems or improvements onto the homeowner’s property tax bill, amortized over twenty years.

The program was very popular when it launched, and now, about a year later, cities are starting to run pilots of this program left and right. California has also passed AB811 to let any city that wants to do this go for it.

How does PACE works

  • The city or county partners with a company to administer the program (or the city decides to do it themselves).
  • The program is then usually funded with municipal bonds.
  • The homeowner gets a site evaluation for solar power or energy efficiency improvements with any company they choose.
  • Once a quote is given, the property owner applies with the city program administrator. A small fee covers the cost of the municipal solar financing program administration and discourages frivolous applications.
  • Once the homeowner’s solar system is approved by the city, the program administrator pays the installer for the system that the homeowner purchased. The check is forwarded directly to the solar installer. There is no upfront payment for the homeowner, except possibly a small deposit.
  • The property owner pays off the PACE loan over 20 years, at a competitive rate of interest. If the home is ever sold, the solar system goes with it along with any tax liability.


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