A growing number of California communities – including the region’s second largest city, Elk Grove – are allowing homeowners to finance energy-saving improvements through their property tax bills.
The approach enables homeowners to install costly green upgrades without having to pay cash upfront; loan payments are made along with property taxes. Known as Property Assessed Clean Energy, or PACE, the financing programs began in California in 2001.
The programs are now authorized in 31 states and are seen by local officials as an economic generator and a way for homeowners to reduce their carbon footprint and utility bills. A wide range of improvements qualify, from solar panels to electric vehicle charging stations.
But the approach can add a layer of complexity to home sales and refinance applications. Interest rates also tend to be higher than for mortgages and home equity loans, from 6.75 to 8.35 percent in the Home Energy Renovation Opportunity, or HERO, program that Elk Grove has authorized.
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