DEL MAR — Property and business owners can more easily finance energy-efficient improvements following a Dec.15 City Council decision to take part in Property Assessed Clean Energy, or PACE, programs.
State law authorizes public agencies to establish special districts that can enter into a voluntary contract with property owners to finance upgrades and repay the loan through property tax bills.
PACE financing can be used for energy- and water-efficient upgrades for everything from low-flush toilets and solar panels to electric vehicle charging infrastructure.
“They’re considered to be a critical tool to help make it feasible for some properties to pursue energy and water efficiency projects, which are increasingly important as cities like Del Mar are charged with establishing climate action plans to reduce greenhouse gas emissions long term and also to reduce water use long term,” Kristen Crane, city manager assistant, said.
The cost of the improvements is recorded as a lien or special assessment on the property. Payments are collected through the property owner’s tax bill with the traditional tax assessments.
The property owner chooses the length of time for the loan, ranging from five to 25 years. Interest rates vary between 6.75 percent to a little more than 8 percent depending on the length of the loan, Crane said.
The unpaid portion is transferred with the property if the property is sold before the loan is paid off, and the new owner assumes responsibility for the unpaid portion of the loan.
There are three main financing programs available in the region.
CaliforniaFIRST can be used for residential and commercial properties. Home Energy Retrofit Opportunity is for residential only. Fig Tree will be available for residential and commercial beginning in February.
Del Mar agreed to allow all three to establish programs in the city. Since these are not city programs there is no risk to Del Mar. All liability falls on the joint powers authority that issues the debt.
Del Mar is the last city in the county to authorize participation in the financing programs.
In March 2010 council agreed to join CaliforniaFIRST, but things were put on hold following concerns raised by Federal Housing Finance Agency rulings regarding Freddie Mae and Fannie Mac.
Those issues have since been resolved.
County Supervisor Dave Roberts recently used PACE financing to replace his lawn with synthetic turf.