Many people regularly hear that their neighbors installed solar panels through PACE. What is it, and how can it be used? Here we look at what the PACE funding program is and whether to take advantage of it.
The acronym PACE stands for Property Assessed Clean Energy (official website). The main goal of this initiative is that owners of houses and enterprises can increase energy efficiency, use renewable energy sources, improve thermal insulation, etc. The program supports many initiatives designed to improve the life of an ordinary citizen.
The main feature of PACE loans is the long-term. In addition to a more extended repayment period, you do not overpay for the use of credit funds. Also, each citizen receives a property attached loan. Also, the property tax bill allows you to make a loan refund. If you own a home, the PACE financing program is an attractive option for you. First of all, the savings relate to spending on electricity, heating a house and any other activities.
Starting from the first year, this will allow you to save and improve the energy efficiency of your property. The convenience of obtaining a loan is also an advantage. Currently, the PACE program is available to US citizens living in California, Missouri, and Florida. You can ask your local solar company about a loan. It will install solar panels in your home very fast.
What is it: the start of a PACE program?
The PACE program was established by state law in 2008. The first initiatives were created in Berkeley, California. The program allows you to get a loan on favorable terms to be able to install solar panels. It improves energy efficiency and helps reduce costs. Local municipalities also play an essential role in this process, namely:
- loan financing;
- partnership with local organizations;
- property tax assessments repayment.
The program is suitable for people who want more energy freedom. You should not be afraid of blackout or maintenance problems. Now you can always count on stable power and operation of household appliances. The program is exciting for many American families. Thanks to the state initiative, support is provided to citizens.
Why is this program so popular?
First and foremost, PACE is committed to improving energy efficiency. Electricity production is rising, and people can gain access to cheap energy — secondly, a loan provided on favorable terms. You do not need to overpay for this. Carbon is also reduced, which helps to combat environmental pollution. The local economy is offloaded, and residents can solve several economic problems.
The program is popular because of the opportunity to get an independent source of electricity. You can also unload the city electrical network. You do not need to service solar panels regularly. Besides, it is a very environmentally friendly form of energy production. Modern solar panels have a high permeability of sunlight. It means that even cloudy weather is not an obstacle to generating electricity.
The difference between R-PACE and C-PACE
R-PACE is intended for residential buildings and private property.
C-PACE is focused on the commercial segment, companies, and organizations. Both options are incredibly beneficial in the long run. According to the PACE Nation report for 2019, more than 220 thousand people have already taken advantage of the program for installing solar power plants. It indicates the high popularity of the program and the foreseeable benefits for all property owners.
The nuances of financial options
PACE is advancing in the media as a financing program, as it is attached to the property instead. Nevertheless, the program has all the signs of lending, as you get a certain amount with the need to return on time. So, you can count on the amount from $ 5,000 to $ 100,000. Repayment periods fluctuate around 5-20 years. As a rule, lending has favorable repayment terms, so citizens use financing. There are also several nuances that you should know before concluding a financing agreement:
Basic moments of a PACE program
It is tied to the property, not borrowers. It is the main difference from the mortgage. The loan body is repaid through property tax bills. It means that when selling a house, the new owner will be required to pay off the remaining debt. The main advantage of this program is the ability to improve the home without using your own money. It is especially beneficial if you have financial problems, or if you do not have the required amount for a one-time transaction. But there are several nuances. You cannot declare bankruptcy for two to three years.
PACE loans for solar: to be or not to be
Before choosing PACE, you need to clarify a few points for yourself. First of all, you should calculate the forecast of expenses for the next 25 years, given the payback period of solar panels. Make a detailed estimate, consider all the benefits and discounts, as well as depreciation panels. It is another nuance that is extremely important. The final calculation should show the total payback, monthly savings, and other parameters. It’s important to understand that choosing PACE is not for everyone.
For example, HELOC or a mortgage loan has a lower interest rate. If your credit history is in good condition, then you can pay attention to such options. In some cases, a credit rating is not in the best position. Then PACE is the only option to join the green energy. You also need to choose a professional solar installation company. Compare prices and read company reviews. It will help make the right choice.
This program is beneficial if you can save at least 10-15% on electricity. In other cases, the connection may not be practical. It is important to remember that this program is beneficial in that case. If you want to become energy independent and save significantly on electricity, if your state has low electricity tariffs, then this program may not be very useful. You should make a preliminary calculation before using PACE in your state.