Can the Obama administration Frankenstein a celebrated solar program back to life? The administration announced a new plan on Tuesday to bring solar power to more neighborhoods — but it’s actually an old plan, long-stymied.
The Property Assessed Clean Energy program, known as PACE, was created in 2007 when Berkeley, California, realized the same tools used by neighborhoods to pay for big projects like street paving could also be used to pay for installing solar panels. People in homes with panels had to pay more in property taxes, but they saved money through lower energy bills.
PACE was a hit, and the idea spread across the country. But in 2010, Fannie Mae and Freddie Mac, which own or guarantee roughly 60 percent of mortgages, freaked out and warned lenders to stay away from communities using the PACE program.
They started “acting like East-Coast bankers,” said Gov. Jerry Brown of California, on a White House call to announce the plan. “After the mortgage meltdown, they’re so fearful they won’t step up to the plate.” PACE didn’t go away, but it was frozen, like Han Solo in carbonite.
So, how to fix this? As part of its “Clean Energy Savings for All” initiative, the Obama administration persuaded the Housing and Urban Development Agency and the Department of Veterans Affairs to support the program. As a result, the pool of people who can get a mortgage to buy a house with PACE-funded solar panels has widened to veterans and anyone with a HUD-backed mortgage.
“They’re doing what Fannie and Freddie say you can’t do,” said Brown. “Someday Fannie and Freddie will get on board.”