Property Assessed Clean Energy (PACE) is a California program that allows property owners to borrow up to 15% of their home’s value to pay for their solar power systems through supplementary county property tax assessments over time. Financing your solar system through PACE is based on your home equity and may also provide additional federal and state income tax benefits on top of the 30% Residential Renewable Energy Tax Credit.
PACE allows property owners who have 10% equity in your home to go solar with no money down and no credit score requirements. The financing arrangement stays with the property and can be transferred to a new owner if you sell your property before the 5-, 10-, 15- or 20-year term is up.
HERO, YGRENE, CalFirst and Figtree are all lenders under the PACE program. Check with your city to see which PACE programs are operating in your area.
With a PACE assessment, there is:
The chart below represents a sample of the cumulative cost of buying a 7-kilowatt Sunpower solar system with a PACE loan compared to staying with your local power utility over a 20-year period. The savings and costs shown are samples for a typical Southern California homeowner and not necessarily representative of what you would pay or save by going solar. The pricing and savings in the chart are just estimates and should not be considered a quote of pricing from Sullivan Solar Power.
One line shows the costs of the PACE loan over time and the other line shows the rising costs of buying utility power. As you can see, the costs of buying power from your utility historically have increased at a rate of 6% per year.
The chart shows that while over 20 years a typical homeowner would pay $139,663 to their local electricity utility, they would pay just $52,292 for a PACE loan, saving more than $87,000 over the term of the loan.
First year monthly payment, you get tax credit in the 2nd year. It goes negative because the incentives to you are greater than the payments you made in the first year.
If you want to own your system and finance your purchase through your property and not your personal finances, then a PACE property tax assessment can provide an easy and affordable way to accomplish that goal and is better than what you are doing now, paying your utility.
The other three financing options – cash, loan and PACE -- are most attractive because they include the 30% Residential Renewable Energy Tax Credit. However, if your circumstances dictate that you don’t quality for the tax credit, a solar power lease or Power Purchase Agreement may be a viable option for you to go solar.