If you want to install a solar energy system on your property, one of the first questions you’ve probably asked is, “How will I pay for it?” There are many financing options available today for homeowners who want to enjoy the benefits of solar. In many areas, an increasingly popular option for home energy improvements like solar is property assessed clean energy (PACE) financing.
How does PACE financing work?
Property owners who aren’t able to or interested in buying solar panels in cash can finance their solar energy system with a solar loan or a solar lease or power purchase agreement. PACE financing is a special type of financing that is available in areas where the local government has allocated funds.
Here’s the general process for using PACE financing to install solar panels on your property:
A county, local, or municipal government passes legislation that establishes a PACE program and makes funds available to investors, usually through the sale of municipal bonds.
An authorized PACE lender (such as Renew Financial or Ygrene) provides those funds to property owners who want to make clean energy improvements, like installing solar panels on their home or business.
Property owners repay the financial institution through an assessment attached to their annual property tax bill.
If you are a residential or a commercial property owner, you can use PACE financing to pay for new heating and cooling systems, insulation, and other energy efficiency upgrades in addition to solar panels.