Homeowners go green now, pay later

Homeowners go green now, pay later

Feb 22 - USA TODAY - By Julie Schmit

Putting solar or other green upgrades on homes and businesses is getting less painful in more cities that are rapidly launching programs to enable owners to pay back upfront costs over years.

The programs let property owners borrow money for upgrades, then pay it back over up to 20 years as a special assessment on property tax bills.

The long payback removes a hurdle to going green: big initial costs, especially for solar panels, that can take years to recoup in lower energy bills.

The idea "seems to be catching on like wildfire," says Ann Livingston of Boulder County, Colo., which started its program last year.

The Property Assessed Clean Energy, or PACE programs, work like this: A city, county or other municipal entity creates a district to issue bonds to raise money to lend to property owners. Investors buy the bonds. If properties sell, payments transfer to new owners.

The concept was launched in a pilot in Berkeley, Calif., in 2008. Boulder County has lent almost $10 million to 612 homeowners for everything from solar to new insulation and energy-efficient furnaces, Livingston says.

Three other programs have started in California and New York, says Cisco DeVries, president of Renewable Funding, a California firm that helps agencies administer the programs.

San Francisco is next with a $150 million program. Starting March 1, homeowners and businesses there can apply for loans of $5,000 to about $50,000 to make energy upgrades.

Santa Fe County in New Mexico is working on a program for solar, geothermal and wind, says economic development director Duncan Sill. San Antonio is studying whether to do one alone or with other Texas cities, says San Antonio official Laurence Doxsey. In California, a program is slated to launch this summer that would include 14 counties and at least 90 cities, says Annie Henderson of Renewable Funding.

States enable the programs with laws to let cities or counties create them. In the past 18 months, 16 states have passed such laws. At least 10 others are working on them, DeVries says.

Costs differ by program. In California, Sonoma County's $100 million program offers loans at 7% interest, which some have seen as "too expensive," spokeswoman Amy Bolten says. Still, the county's received 1,200 applications in 11 months. Boulder County's rates have ranged from 5.2% to 6.8%.