Friday, July 9, 2010

Reeling PACE program gets another thumbs up


A program tying financing of energy efficiency upgrades to a homeowner's tax bill got another voice of support this week after taking a beating much of the past several months.

The beleaguered property assessed clean energy, or PACE, program has been sullied by a thumbs down from real estate financing behemoths Fannie Mae and Freddie Mac and more recently by the Federal Housing Finance Agency which issued a release this week said the "energy retrofit lending programs present significant safety and soundness concerns."

Steven Cohen, executive director at the Earth Institute at Columbia University, said in a piece in the Huffington Post that the financial institutions' complaints, which center on PACE loans getting priority should a house go into foreclosure, are shortsighted and "narrow view of the world that willfully ignores the value of reducing the cost of energy in the home.

"The financial geniuses at Fannie Mae and Freddie Mac who managed to lose billions of dollars in the housing market have decided in their new-found fiscal conservatism to do their best to derail a promising and innovative mechanism for financing local green energy retrofits. The federal housing agencies' attack on an energy and money-saving program ... demonstrates an obtuse hostility toward green energy initiatives."

Cohen's post comes just days after California Gov. Arnold Schwarzenegger blasted the Federal Housing Finance Agency for failing to support the program, saying, "The FHFA's bureaucratic breakdown threatens one of California's most promising new engines of job creation in this struggling economy."

Many cities in the San Joaquin Valley were looking to start PACE programs of their own through AB 811 , which enabled the practice. Detractors' efforts may have taken the opportunity from homeowners, at least for the time being. However, some in the industry said this week the movement may shift to providing energy efficiency retrofits such as solar systems to commercial buildings.

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