Put PACE back in place
On March 25, 2009, the Sonoma County Board of Supervisors created the Sonoma County Energy Independence Project (SCEIP) and on April 22 of that year, a Healdsburg couple went online with a $25,000, 5-kilowatt solar energy system paid for from a $100-million loan fund made possible by a program called Property Assessed Clean Energy (PACE).
PACE, in case this is all new to you, is an innovative federal program that allows local jurisdictions to make energy-efficiency loans to residential and commercial building owners that are repaid as property tax increments over five to 20 years.
The loans stay with the property, are set at fixed interest rates, only cover permanent property improvements - such as energy-efficient heating and cooling systems, cool roofs and improved insulation - and don't involve any federal, state or local subsidies.
By definitio,n PACE loans reduce energy and water consumption, significantly lower the cost of home ownership and partially - if not completely - pay for themselves. They are, in a sense, self-perpetuating, self-funding and job-creating, since the loans are paid back into a fund that can be rolled over into new loans while stimulating the growth of green building companies and more jobs.
Since that first residential installation in 2009, SCEIP has approved 1,683 applications in Sonoma County and has funded more than $47 million in energy efficiency projects. The result has increased construction jobs in an industry practically flattened by the Great Recession, while reducing the energy costs for a growing number of county residents.
But then, a year ago, the Federal Housing Finance Agency - along with Fannie Mae and Freddie Mac - issued "advice letters" that brought the PACE program to a screeching halt. Fannie and Freddie, the federally-chartered mortgage lenders, warned that PACE loans, because they have lien priority, would be first in line in the case of foreclosures and would therefore put Freddie and Fannie at risk. States argued the loans are only assessments and PACE foreclosures are rare, but the feds wouldn't listen.
Now a bipartisan coalition of Congress members, including our own Mike Thompson, D-St. Helena, have come up with a legislative solution, the PACE Protection Act of 2011.
On a Wednesday conference call, Thompson, Rep. Dan Lungren, R-Gold River, Rep. Nan Hayworth, R-N.Y., and Sonoma County Supervisor Valerie Brown, agreed PACE is a win-win solution for homeowners and the national economy. Brown pointed out that 27 other states have passed PACE programs and those states have registered a 7 percent increase in construction jobs while non-PACE states have suffered a 2 percent drop. Lundgren said the PACE bill is "Bi-coastal, bipartisan, and does not put government on the hook."
The PACE Protection Act simply guarantees that PACE assessments will only be allowed for credit-worthy participants, and that improvements must be revenue positive. What's wrong with that?
We applaud Thompson and his colleagues and hope Congress speedily approves the bill.