There are many options when it comes to financing green improvements to your home or property, such as home equity loans, energy efficient mortgages, rebates from utilities, and more. Researching your options can help you determine what financing will work best for you. Some options that may be less well known are highlighted below, but should be compared with other financing options.
PG&E 0% On-Bill Financing (Commercial/Business)PG&E offers 0% interest loans of $5,000-$100,000 to companies for energy efficient upgrades, like LEDs, HVAC, and refrigeration. The loans are repaid over a period of 5 years. Find out more about the 0% interest loan program.
Energy Efficient Mortgages
An Energy Efficient Mortgage (EEM) is a mortgage that credits a home's energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home. Learn more about an Energy Efficient Mortgage.
- There are many options for financing solar, including home equity loans and power purchase agreements (PPA) agreements, so consider what is best for you. Learn more about financing options specific to solar here.
- PACE Financing allows property owners to finance energy efficiency, water conservation, renewable energy, and electric vehicle infrastructure upgrades to their property by repaying the cost of the improvements through a voluntary assessment on their property tax bill. Some lenders may require the PACE assessment to be repaid before refinancing or selling your home.
Rebates and Incentives
- PG&E customers are eligible for net energy metering (NEM), which credits excess electricity production at the 12-month average of the market rate for energy. Over a 12-month period, the customer has to pay for only the net amount of electricity used from PG&E over-and-above the amount of electricity generated by their solar system. You can find out more about how to participate here.
- California Solar Initiative is accepting rebate applications from low-income customers in two programs, the Single-Family Affordable Solar Housing (SASH) Program and the Multifamily Affordable Solar Housing (MASH) Program. Find out more at their website.
- An extensive list of incentives throughout the country can be found at the Database of State Incentives for Renewable Energy (DSIRE).
- The Federal Tax Credit for residential renewable energy systems applies to solar PV, solar water-heaters, fuel cells, wind, and geothermal heat pumps. Credits for solar technologies expire at the end of 2021; for all other technologies, credits expire at the end of 2016. Homeowners who install rooftop solar in 2016 may be eligible for a 30% federal tax credit. For more information about federal tax credits for residential systems, click here.
- The Federal Tax Credit for commercial renewable energy systems applies to many technologies. This tax credit is applicable to utilities, commercial, industrial, and agricultural sectors. Properties that have solar technologies installed in 2016 may be eligible for a 30% federal tax credit. For more information about federal tax credits for commercial systems, click here.
What is PACE?
Property Assessed Clean Energy (PACE) financing allows property owners to finance energy efficiency, water conservation, renewable energy, and electric vehicle infrastructure upgrades to their property by repaying the cost of the improvements through a voluntary assessment on their property tax bill. There are residential PACE programs and commercial PACE programs. Commercial property owners and multi-family property owners (5+ units) are eligible for commercial PACE financing.
Three PACE programs are available in Walnut Creek. The City of Walnut Creek allows PACE programs to operate within its jurisdiction to give consumers an additional financing option, but does not administer the programs. For questions, contact the programs directly. Pick the program that best fits your needs.
- CaliforniaFIRST launched on November 18, 2014 (residential and commercial)
- California HERO Program launched Spring 2015 (residential and commercial)
- Figtree Financing PACE Program launched in early 2015 (commercial only), residential program being developed
Benefits of PACE
- No money down, fixed interest rates, and low annual payments: Long term PACE financing of up to 20 years results in low annual payments allowing energy savings to offset PACE payments.
- Voluntary: Property owners choose to participate in the program at their own discretion.
- Payment obligation is tied to the property: A voluntary assessment lien stays with the property upon transfer of building ownership (NOTE: Some residential lenders may not allow payment obligations to transfer and will require repayment, so ask your PACE program for more information. You may be required to pay off the assessment before selling or refinancing your home)
- Increased property values: More efficient properties are typically worth more.
- Get Tax Incentives and Rebates: The property owner owns the system so they can apply for rebates and tax incentives for the improvement.
- Reduce energy and water use: Energy efficiency and water conservation improvements can help lower utility bills.
Potential PACE drawbacks
- While residential PACE payment obligations are designed to be tied to the property, some residential lenders may not allow payment obligations to transfer and will require repayment, so ask your PACE program for more information. You may be required to pay off the assessment before selling or refinancing your home. Those homeowners who are looking to sell or refinance in the near future should consider whether PACE works for their situation.