PACE, or Property Assessed Clean Energy, is a way of financing your solar panel system. If you don’t have the cash on hand to install your solar panels or the solar price is concerning you, the PACE program may be a good option for you to look into.
What is the PACE Program?
The PACE Program was put in place for not just solar panel system financing, but was a mechanism designed to help property owners finance other renewable energy improvements as well. In the state of California, the PACE Program is called CaliforniaFIRST. Under CaliforniaFIRST, the cost of a renewable energy project, like solar panels, through their property tax bill.
What is the minimum and maximum amount you can finance?
When going through the PACE Program, the minimum amount you can finance is $5,000 and the maximum is $75,000. This is a large range that will cover an array of both residential solar systems and business solar systems.
How does the PACE Program work?
If you are looking into using PACE as a financing option, it is important that you understand how it relates to your solar panel needs.
- The local or state government has their own system to administer the PACE Program. California’s is CaliforniaFIRST.
- You will have your property evaluated by a solar power installation company.
- Following a quote, you will then apply for the PACE Program with your city program administrator. There is a fee involved to cover the cost of the municipal solar financing program, but it is typically minimal.
- After being approved by the city, the PACE Program administrator will pay your solar contactor for the solar panel system that you are financing for. The payment will go directly from the administrator to the contractor, leaving you out of the deal. You will have no upfront costs.
- Over the course of 20 years, you will pay off the financing loan as part of your property tax bill. There will be interest involved, but they keep it competitive.
- If the property is sold to someone else in the future, the financing is switched to the new owner and their property tax liability. You will not be responsible for it once the house with the solar panels is sold. It is considered a “debt of property,” so if the property is not yours any longer, then it is not your debt.
Does PACE work on future properties?
PACE cannot be applied to properties that are not yet constructed. The purpose is to finance energy improvements, like installing solar panels, on homes and other buildings that could be more energy efficient. A home or building that has not been constructed yet cannot apply for improvements.
What happens if you don’t pay it back?
The repercussions for not paying back the PACE Program are the same as not paying any other part of your property bill tax. Failure to pay will result in penalties, an increase in interest rate, and a default could result in a loss of the property.