Every year, about one in six homeowners replace a system or product in their home that affects energy consumption. Too often, they do not choose the product most likely to save energy or water or reduce carbon emissions – products that ultimately may help pay for themselves over time. And in many instances, they pay for such improvements with unsecured credit and with no quality assurance of products being installed, checks on contractors doing the work, and little, if any, assistance and recourse for work gone bad.
A few years after legislation provided for the implementation of Property Assessed Clean Energy (PACE) Programs in 2008, the Western Riverside Council of Governments (WRCOG) established its own PACE Program in Western Riverside County. PACE Programs provide property owners with a financing option to retrofit their homes or businesses for energy efficiency, water conservation, and seismic strengthening improvements. Financing for improvements is repaid through a line item added to the property tax bill.
The idea for PACE is simple; to help people make what is usually their most valuable investment – their property – more comfortable and more resilient to extreme weather. Seeing PACE as a viable and vibrant opportunity for the region, WRCOG pursued establishing this Program based on its ability to address the following policy objectives:
- Provides a voluntary mechanism to retrofit thousands of properties for increased energy efficiency and water conservation
- Improves the region’s older housing stock
- Creates and retains jobs for area contractors
- Reduces greenhouse gas emissions and betters air quality
WRCOG viewed PACE as a comprehensive approach to grow the economy with multifaceted and compounding benefits for member agencies, the local workforce, and property owners. When WRCOG founded its PACE program in 2011, most local agencies were implementing the enabling legislation on a city by city basis. In Western Riverside County, however, the local agencies came together to build one program across several communities through WRCOG. The result was that WRCOG had an economy of scale that allowed it to invest in developing better processes and controls and streamline the program.
Since its inception, WRCOG’s PACE Program has grown significantly and now includes 77% of California municipalities, making WRCOG the largest bond issuer of PACE in the United States. One of the main reasons that the WRCOG program was such a success is that is was born out of collaboration. When it was founded, other cities had also started individual PACE programs. But the cities and county in Western Riverside came together and asked the COG to deliver a program across the region. This allowed the WRCOG program to achieve an early economy of scale and had a lot to do with the future success of the program.
To date over 90,000 projects have been completed statewide, resulting in $2 billion of funding for California projects. PACE improvement projects range from solar panel installation, new windows and doors, roofing, landscaping, and much more. Collectively, PACE projects have succeeded to achieve the policy objectives and have profound estimated environmental impacts; 555 million gallons of water saved, $117 million in annual savings from installed improvements, and 222,221 tons of greenhouse gas emissions eliminated, the equivalent to removing the emissions of 40,000 vehicles each year.
Additionally, for each PACE project financed, WRCOG reinvests a portion of the administrative fee collected back into Western Riverside County. This has resulted in $12 million going to a variety of regional programs, including investment in WRCOG’s Public Service Fellowship Program that has provided over 50 local university students with career opportunities in the public sector. More than 80 projects aimed at improving the quality of life throughout member jurisdictions have also been funded. WRCOG’s Grant Writing Assistance Program, also funded with PACE revenues, has secured $15 million in grants for projects related to improving the resiliency of infrastructure and diversifying transportation options throughout the region.
Notwithstanding the benefits of PACE, there have been challenges, as can be imagined when a new program such as PACE comes around and involves, consumers, contractors, financing, the private sector and government. PACE Program providers are continually evolving their programs to improve consumer protections to make PACE not just a financing option, but one that is unparalleled when it comes to consumer experience and safeguards compared to other forms of financing. WRCOG has set the pace for consumer protections and was the first bond issuer to develop and adopt consumer protection policies for its programs; many of these protections have since been adopted by the PACE industry and have been also been codified in statute, now applying to all PACE providers statewide.
Interested in learning more about WRCOG’s PACE Programs? Click here to listen to the PACE WRCOGcast (WRCOG podcast) episode.