PACE program offers energy efficiency loans

Homeowners and businesses in Orlando, Winter Park and Longwood have new options this week to finance loans for energy-efficiency improvements, such as air conditioning, roofing, hurricane windows or solar panels.

National finance company Renovate America is rolling out loans under the Property Assessed Clean Energy program for the first time in Florida. It joins three other private companies now arranging PACE loans for residents in those Orange County cities and elsewhere in Florida.

“It’s a great solution for middleand lower-income homeowners because it’s not dependent on your credit,” said Remo Eyal, CEO and part-owner of Superior Solar Systems contractors. “As long as you have equity in your home and are current on payments.” The interest qualifies for a tax credit, he said.

The goal is to lower the utility bill at a property and use those savings to help pay back the loan. PACE loans stay with the property, so the homeowner doesn’t keep paying for the improvements if the house is sold.

The new property owner would still benefit from the utility savings, and sellers are required to disclose the assessment for the loan upon sale of the property. The payments are attached to the property itself and paid as part of property tax bill.

Eyal said his solar-energy company has done dozens of jobs that are PACE financed since Winter Park approved the method about two years ago. But he said acceptance of the program, called Home Energy Renovation Opportunity (HERO), has been slow to start.

“Business should pick up now that HERO is here,” Eyal said. “They offer a 5.99 percent rate.”

The PACE concept dates to around 2001, when the city of Berkeley, Calif., first explored it. It was designed to overcome a big barrier for solar power and expensive retrofits for energy efficiency: up-front costs. More than 30 states have enabled local governments to authorize PACE financing.

PACE was approved for use in 2015 in Osceola County, the first location in Central Florida. Orlando launched it in fall of 2016. The first PACE project locally was a new central air conditioning system for registered nurse Deborah Guldenschuh in Kissimmee. She said she spent $10,000 on a new central air system for her home and is on a fiveyear payment plan.

Renovate America intends to open its Florida hub in Orlando as home base for Florida Director Mike Antheil. Based in San Diego, the company has up to 600 employees elsewhere and will be hiring as the program expands in Florida.

“What makes PACE unique is the consumer protection’s built in … that we’re getting the right products for the right customer,” Antheil said. “We hold the contractors accountable, and help them out by financing projects.”

Local electricians, roofers, window installers and solar companies will sign up with Renovate America during the next few weeks, he said.

The HERO program is also unique for the way it rates contractors by social media reviews on Google, Yelp and Facebook.

“We say we’re a technology company that is doing finance,” said Matthew Bevens, spokesman for Renovate America. “Contractors without good ratings on social media don’t even pass our first hurdle.”

Other contractors operating in the Orlando area are Ygrene, the RenewPACE program of the Florida Green Finance Authority and the AllianceNRG program of the Orlando-based Florida PACE Funding Agency.

PACE financing isn’t without controversy.

Starting in 2010, the Federal Housing Finance Agency opposed PACE financing because PACE liens take first position in a foreclosure or bankruptcy, ahead of a mortgage for Fannie Mae or Freddie Mac. But the program has continued growing anyway.

HERO is focused on homes; Bevens said there are about 79,000 homes in Orlando and about 11,000 in Winter Park that are eligible. But Renovate America may offer commercial loans also, and the other agencies are already working on commercial loans, said Chris Castro, director of sustainability for Orlando.

Castro said Orlando was among the first to use several finance companies for PACE, which he said would foster more options and competition.