February 22, 2017
BY MIKE LEMYRE, YGRENE'S SENIOR VP OF MARKET DEVELOPMENT & GOVERNMENT AFFAIRS
There’s no question that PACE (property assessed clean energy) financing is taking off across the nation. We have begun 2017 with a significantly larger PACE industry—many new capital providers, administrators and servicing firms have entered the market. Overall industry origination has nearly tripled, with all signs pointing to a bigger and stronger PACE industry that promises to have a greater impact on communities across the country.
Despite this success, or perhaps because of it, PACE continues to be met with some resistance: competition that offers alternative financing, and a housing financing industry (including real estate agents and mortgage bankers) that struggles to absorb PACE into its entrenched business models. The bottom line is that PACE has proven to be one of the most effective policy implementations and financing options for property owners, contractors and state and local governments—one that has produced enormous benefits and positive outcomes across the board.
Backed by Industry Data
PACE is safe and secure; it is not only an effective tool not only for job creation and local economic development but also for generating utility savings for homeowners and increasing property values. PACENation has a collected a wealth of data from program administrators and capital providers, recently reporting a cumulative $3.7 billion of private capital put to work on over 130,000 projects from California to Connecticut to Florida and beyond. This 'micro-infrastructure' finance tool has created or sustained 33,000 good-paying local jobs that cannot be exported.
With significant growth typically comes a number of threats and challenges. And despite producing incredibly positive outcomes, as evidenced by near-zero default, delinquency, and foreclosure rates on properties that have completed a PACE financed project, the industry has its share of critics.
Opponents of PACE often point out:
- The lack of a single industry regulatory (we have hundreds—every community that has approved PACE)
- The absence of sufficient consumer protections (there are many, including proactive steps taken by PACENation and the leading programs such as Ygrene)
- The fact that we do not adhere to effective underwriting standards (based on outcomes we argue that PACE standards are best in class).
By enabling property owners to enjoy increased energy efficiency, while stimulating communities through new business opportunities, PACE will continue to thrive.
Visit Ygrene to learn more about PACE and find out if this financing option is available in your area.