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Paying for Energy Efficient Upgrades through PACE

By
Real Estate Sales Representative with Green Gamut

www.whitehouse.gov/assets/documents/PACE_Principles.pdf

As professionals dedicated to the promotion of green and energy efficient housing, we have been faced with finding ways to pay for energy upgrades. Under this plan the local government could assess taxes on properties that use a PACE fund to implement energy upgrades. 

I have provided the link to the PACE program so you can better understand how this proposal is to work.

This program is said to have built in consumer protection, and overall benefits that would allow the consumer to realize savings greater than the tax assessed on the property. This could provide many more people with an opportunity to fund energy efficient improvements.

However, with any such government lending, the risks seem to be wide reaching. A large risk is in foreclosure and repayment. Under this program a home could be repossessed for failure to repay. While many banks and mortgage providers have varied ways in which to help home owners stay in their home, the government does not have the flexibility to offer repayment options. This could jeopardize thousands of homeowners currently faced with unemployment and under employment.

A far greater risk is the "setting" of service charges under such a program. While this program is set to use Energy Professionals such as Energy Auditors to preform retrofit analysis, it is also set to control the charges an auditor can charge under the program. This could easily cause energy professionals to not be competitive in their prospective market place. Simply put what someone would expect to pay in Michigan would not be the same in Washington DC where cost are significantly higher. This could have a direct impact on the quality of inspections being performed.

I want to hear from you on this program. Please share your thoughts and opinions. Let me know if you think this type of program will be effective, or create undue burdens on municipalities. Your opions and ideas matter! So speak out and let me hear what you think!

John Thomas
E3 Green HOMES - Boulder, CO
EcoBroker, MSEE, MBA

Interesting...I saw VP Biden's report on the 15th but I missed this one. Thanks for posting it. In my view, there are risks with virtually any type of program like this. The real issues is do the benefits offset the risks. I think they do. The EE improvements create value and as long as the value stays with the property, there is no reason the risk shouldn't be there too. Not unlike any other property that could go into foreclosure. I'm uncertain about the auditor charges. That door could swing both ways. No regulations for a program like that could lead the program being taken advantage of. On the other hand, as you pointed out, too tight of controls could undermine the integrity of the energy professionals. Frankly, all of these are problems I welcome considering there is not too much to choose from otherwise. Hopefully, the industry will self-regulate to some degree. Nice post Tony...Thanks for bringing this up. It will be interesting to see what others have to say.

Cheers,

john

Nov 03, 2009 03:33 PM
Mary McGraw
GLREA - Rockford, MI
2015: Solar Energy Is Still A Simple Machine!

Nice post Tony ~ I'm still trying to find time to look over the materials you gave me. When I do I will post a more intelligent response!

Nov 05, 2009 11:21 AM