In July 2010, US Senator Barbara Boxer (D-California) and senators from three other states introduced legislation to preserve property assessed clean energy (PACE) programs, which have come under attack by large lenders and an agency of the US federal government. PACE provides government financing for solar photovoltaic (PV) systems and energy efficiency retrofits in a highly successful model that is being replicated in multiple US states and municipalities. Also on July 27, Senator Boxer visited Solaria Corporation's (Fremont, California, US) manufacturing facilities, pledging to support renewable energy development at the federal level. "The current uncertainty surrounding PACE programs is jeopardizing $110 million in federal investments for California communities, which is simply unacceptable", stated Senator Boxer. "We must take action to protect these initiatives because they create jobs, save homeowners money on their energy bills and help our environment."

The PACE debate

PACE programs offer a model for government financing whereby a municipality, state government or other entity issues bonds to pay for the up-front costs of installing PV or making energy efficiency improvements, which are paid back through property taxes as a form of lien. The PACE model is based on the highly successful Berkeley First Program in Berkeley, California. The program has been imitated in other cities including Boulder, Colorado, and states including the state of California. More than a dozen states have passed legislation enabling PACE.

Two federally controlled lending agencies, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation and the (known colloquially as Fannie Mae and Freddie Mac) took issue with the programs. As early as May 2010, the agencies began sending out letters stating that homes mortgaged through the agencies, which account for a large share of US homes, would not be eligible to participate in PACE programs.

The agencies state concerns that in a situation of default, PACE liens would be paid back before mortgages. These semi-private lenders gained the support of the Federal Housing Finance Agency, which on July 6^th, 2010, called for a stop to PACE programs. Since then PACE programs nationwide have been in a legal limbo.

PACE and California

PACE has been seen as a tremendously beneficial program for both the solar industry and homeowners, particularly in Senator Boxer's state of California, as the program makes the option of owning a solar system or making energy efficiency improvements available to a much wider range of residents. Nearly half of California's 58 counties and a number of cities have developed PACE programs or stated their intention to do so.

Senator Boxer voiced concerns that barring PACE would also deprive California of USD$110 million in American Recovery and Reinvestment Act (also called the “stimulus package”) funds, and states that her legislation would require lenders to adopt new underwriting standards that support PACE legislation. Senator Boxer's office says the legislation would require that PACE programs be treated like any other property tax assessment and would respect the legal authority of US states. Similar legislation is being introduced in the US House of Representatives by Congressman Mike Thompson (D-California) and twenty other representatives.

Other sponsors of the Senate legislation include Senators Jeff Merkley (D-Oregon), Kirsten Gillibrand (D-New York) and Mark Begich (D-Alaska).

Solaria visit

On July 27^th, 2010, Senator Boxer toured the headquarters and manufacturing facility of crystalline silicon PV maker Solaria. Solaria reports that while at the facilities she spoke with executives about clean energy legislation at the state and federal level that will support the PV industry and create clean technology jobs in California and throughout the United States. "We’re delighted to welcome Senator Boxer to Solaria", noted Solar CEO Daniel Shugar. "Time after time, Senator Boxer has demonstrated her commitment to supporting policies that further the growth and deployment of solar in California. Her outstanding work in Washington, DC has been instrumental in furthering laws and policies that help protect the environment and foster the growth of the clean tech economy throughout the nation."

2010-07-31 | Courtesy: Office of Senator Barbara Boxer, Solaria | solarserver.com © Heindl Server GmbH