The nation's biggest mortgage agencies Fannie Mae and Freddie Mac oppose loans from PACE, the Property Assessed Clean Energy program, that would enable homeowners to finance renewable energy improvements for their homes. Their opposition has put a hold on the PACE program because the loans would have lien priority over mortgages.

On July 21, 2008, Governor Arnold Schwarzenegger signed Assembly Bill 811 to allow cities to receive financing for the installation of "energy efficiency improvements" that are permanently fixed on property. These low-interest loans would be repaid through the property tax over a period of 15 to 20 years.

"Financing from conventional sources is difficult for the average homeowner and small business to come by. AB 811 would allow those property owners with equity in their properties and who are current on their property taxes to have a vehicle to add energy efficiency improvements to their building," said owner of Solarponics Mike Emrich.

The program would make renewable energy more affordable and accessible, reduce electrical bills, reduce our dependence on foreign energy and create jobs. Critics of the bill believe that it may create more debt with the decreased value of homes and property taxes may be more expensive than the energy bill. AB 811 does not cover properties being developed, nor does it cover any improvements that are not permanently fixed to the house, such as updated appliances. 

The Wall Street Journal quoted Edward DeMarco, the acting head of FHFA saying, "Homeowners should not be placed at risk by programs that alter lien priorities and fail to operate with sound underwriting guidelines and consumer protections."

Robin Hayhurst, executive director of Santa Maria Valley Contractors Association, said that Santa Barbara County, which includes Santa Maria and Santa Ynez Valley, is ready to move forward with the program, but cannot because of Fannie and Freddie's oppositions.  

"No lender wants a lien, but if the house is close to being paid off, there should be no problem. The people who would be going through our program in Santa Barbara would not be Freddie and Fannie users. They would be people who are close to paying off their homes and don't have a lot of debt," said Hayhurst.

Even with PACE on hold, there are other government incentives that help make energy efficiency improvements like Solar more affordable. There is a 30 percent tax credit and a 30 percent treasury grant for those that qualify.

Those interested that already have a line of credit with a bank, have a high FICO score and have 80 percent equity in their home can receive funding easily. Dianna Schmaeling of the Atascadero Citibank branch said they offer two types of loans for home improvements.  Customers can either refinance or take a home equity line of credit.

"AB 811 won't be a tool for all customers.  If you have the ability to borrow, or money invested at one to four percent taxable, then waiting to invest in a solar system is just burning money with the utility company. Why rent when you can own your utility company?  The problems we face are now and we can change directions to make this a more independent and self-sufficient nation," said Emrich.

This article was press release submitted by SLO Chamber member Solarponics and does not reflect the opinions or views of the San Luis Obipso Chamber of Commerce board and staff. Solarponics is the Central Coast's alternative energy pioneer, helping residents achieve energy independence for 35 years. The longest continuously owned and operated solar company in California, Solarponics has been family owned and operated since 1975. Solarponics can install and service solar electric systems, solar hot water, wind energy systems, solar pool heating and radiant heating systems. For more information, visit solarponics.com.