PACE Program Details

What is PACE?

PACE was first piloted in the city of Berkeley nearly ten years ago as an innovative way to help homeowners install clean energy projects by overcoming the high first-cost barrier. Since then, it has steadily grown to become one of the most successful energy efficiency financing programs ever, providing nearly $4 billion in upfront capital for wide range of energy improvements in residential, commercial, and nonprofit properties across California. The repayments are typically paid through an owner’s regular property taxes as a special assessment.

 

PACE offers many benefits to its public and private partners. For local governments, PACE helps meet climate action plan goals, reduces emissions, and creates local jobs. For property owners, PACE provides a 100% financing solution for a wide variety of projects that lower operating costs, address deferred maintenance, and enhance property value. And PACE gives energy contractors a new tool to sell projects and gain visibility.

 

In order for property owners to use PACE, a local jurisdiction’s governing body must pass resolutions to opt-in to a program, which is run as partnership between private administrators, who provide capital and operational services, and a joint powers authority, who issues the PACE bonds that funds projects.

 

Commercial PACE

BayREN is authorized to directly support Commercial PACE programs in the Bay Area by helping to facilitate projects that make financial sense for building owners. We are partnering with Sustainable Real Estate Solutions, a national leader in the building energy performance industry, to provide hands-on technical project development services to energy contractors, assist with accessing available incentives and rebates, and coordinate financing with all major PACE financing providers. Please visit https://bayren.paceworx.com/ to learn more about the free services that the program offers to contractors and building owners.

 
Residential PACE

BayREN has been approved to directly support Commercial PACE programs, yet there are overlapping issues with Residential PACE that warrant discussion; for example, some PACE providers serve both residential and commercial properties, while others only serve just one sector. Residential PACE, which has generated the majority of financing volume in California (in dollars and number of properties), has also experienced some challenges that are common within new rapid growth industries. Examples include: mitigating risks to lenders; incorporating consumer protections such as providing transparent pricing and clear disclosures; and sharing data for performance monitoring. Over the past few years, BayREN, and the State, through the Governor’s Office and the Legislature, have taken proactive steps to address these issues.

 

In 2013, the state created the PACE Loss Reserve Program, a $10 million fund that covers mortgage lenders’ losses in case a home that has used PACE defaults or is foreclosed on. All residential PACE providers in California participate in this program.

 

In 2015, BayREN created the Regional Collaborative Services Agreement (RCSA) to support consistent application of residential PACE best practices throughout the Bay Area. See below for more information. In 2016, Governor Brown signed AB 2693 into law, which requires standard written disclosures for property owners, and mandates a 3-day right to cancel modeled after mortgage documents.

 

In 2017, two new PACE bills that became law, SB 242 and AB 1284, establish a clear, enforceable statewide consumer protection framework for residential PACE. Regulations are currently being developed by the Department of Business Oversight (DBO), which will serve as the regulating agency and will enforce compliance under a licensing regime.

Visit DBO’s website for updates.

 
 
PACE Programs in California
  • Alliance NRG

    • Sponsored by California Statewide Community Development Authority (CSCDA)

    • Part of CSCDA "Open PACE"

    • Opt-in process: requires (1) city/county “opt-in resolution” if your jurisdiction is already a member of CSCDA

    • Residential and commercial properties

    • Contact: Bob Schuman, bob.schuman@counterpointees.com, (561) 409-0533​

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  • CaliforniaFIRST

    • Sponsored by California Statewide Community Development Authority (CSCDA)

    • Part of CSCDA "Open PACE"

    • Opt-in process: requires (1) city/county "Opt-in resolution" if your jurisdiction is already a member of CSCDA

    • Residential and commercial properties

    • Contact: Jonathan Kevles, jkevles@renewfund.com, (510) 350-3709

​​

  • HERO

    • Sponsored by Western Riverside Council of Governments

    • Opt-in process: requires (1) city/county "Opt-in resolution," and (1) JPA amendment (attachment) also approved by the local legislative body.

    • Residential properties only

    • Contact: Dustin Reilich, dreilich@heroprogram.com, (949) 237-0965

​​

  • Energy Efficient Equity

    • Sponsored by California Municipal Finance Authority (CMFA)

    • Residential only

    • Opt-in process: requires (1) city/county "Opt-in resolution" if your jurisdiction is already a member of CMFA

    • Contact: Taylor Libolt, taylor@energyefficientequity.com, (909) 336-8790

​​

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  • PACE Funding Group

    • Sponsored by California Statewide Community Development Authority (CSCDA)

    • Part of CSCDA "Open PACE"

    • Opt-in process: requires (1) city/county "Opt-in resolution" if your jurisdiction is already a member of CSCDA

    • Residential only

    • Contact: Rachel Hobbs, rachel@pacefunding.com, (408) 207-5750

​​

  • Spruce PACE

    • Sponsored by California Statewide Community Development Authority (CSCDA)

    • Part of CSCDA "Open PACE"

    • Opt-in process: requires (1) city/county “opt-in resolution” if your jurisdiction is already a member of CSCDA

    • Residential only

    • Contact:  Joe Livaich, jwgl@livaichce.com, (916) 396.7659​

​​

  • Ygrene Energy Fund

    • Sponsored by Golden State Financing Authority (GSFA) formerly known as California Home Finance Authority or CRHMFA Homebuyers Fund/CHF, the Joint Powers Authority (JPA) partner

    • Opt-in process for Counties: 3 resolutions are required

      • AB 811 authorization

      • SB 555 authorization

      • Agreement for placing PACE assessments on tax rolls

    • For the cities/towns: 2 resolutions are required

      • AB 811 authorization

      • SB 555 authorization

    • Contact: Emily Goodwin, emily.goodwin@ygrene.com, (415) 261-7578

 

Regional Collaborative Services Agreement (RCSA)

Best Practices and Consumer Protections

ABAG created the Regional Collaborative Services Agreement (RCSA) with PACE providers active in the Bay Area to support consistent application "best practices" considered to be critically important for local government partners; these include: consumer protections and disclosures; local government risk mitigation and indemnification; coordinating with ratepayer-funded energy efficiency programs; contractor and project quality assurance; and performance tracking, data, and reporting.

 

To date, ABAG has executed the RCSA with the following program administrators & JPA sponsors:

  • CounterPointe Energy Solutions LLC (AllianceNRG Program)

  • Energy Efficient Equity (E3)

  • Figtree Financing (Dividend Solar) 

  • PACE Funding Group LLC 

  • Spruce

  • Western Riverside Council of Governments (HERO program)

  • Ygrene Energy Fund California LLC

 

Bay Area member jurisdictions that wish to have RCSA terms apply to PACE activities in their community can sign an "ABAG Member Acknowledgement Form" to the RCSA, and return the executed Acknowledgment to ABAG/MTC.

NOTE: Local jurisdictions still need to pass the required resolution(s) to join a residential PACE program(s); the RCSA adds supplementary safeguards and ensures homeowners and local governments will receive the highest level of service.

 

Documents for Local Governments

Template Partnership Agreement

 

ABAG Member Acknowledgement Form

 

Sample Staff Report

Program Comparison Matrix

 

In order for new PACE Providers to sign on to the RCSA, they need to respond to ABAG's Criteria for Participation, available here. Upon review of the submittal, if ABAG determines that the Provider has met the requisite criteria, they will be invited to sign onto the RCSA. All PACE providers that are signatories to the RCSA will be subject to the termination process. 

Association of Bay Area Governments 

375 Beale Street, 7th Floor

San Francisco, CA 94105-2066

www.bayareametro.gov

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