New Law Bolsters Local Solar & Efficiency Retrofit Financing

By Published On: April 23, 2010

Legislation enacted into law this week uses the state clout to reduce interest rates on loans for private property owners opting to finance solar and/or energy efficiency retrofits via property assessments. The governor signed SB 77 by Senator Fran Pavley (D-Santa Monica) April 20. “I signed SB 77 to help build our green economy, create thousands of jobs and create a cleaner environment by making energy efficient investments easier to make,” stated Governor Arnold Schwarzenegger. Numerous local governments offer--and plan to offer--financing to cover the steep upfront costs of solar and energy and water efficiency installations of participating businesses and homeowners. Under these emerging “Property Assessed Clean Energy” or PACE programs, the public loan would be paid back with long-term property tax assessments. SB 77 diverts $50 million from the Renewable Resources Trust Fund to the California Alternative Energy and Advanced Transportation Financing Authority to buy and sell local bonds. The bill caps loan costs at 10 percent of property value. The Authority, which is to establish loan eligibility criteria for cities, was created in 1980 with $200 million in revenue bonds to finance cogeneration, wind, and geothermal projects. Its mandate was subsequently expanded, the last time being during the 2000-01 energy crisis to finance renewable energy development.

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