By Luis Amezcua
To stem the tide of climate change, we are all going to have to contribute in ways both large and small. When we examine our personal carbon footprints, we see the way we power our homes is one of the most important choices we make. Residential heating, cooling, and the electricity we use to power our lights and appliances together generate about 20% of our country's greenhouse gas (GHG) emissions.
Solar power has become a cost-effective way to power our homes and energy-efficient appliances. Home retrofits often more than pay for themselves over time, providing individuals with a compelling opportunity to take individual action in the fight against climate change and reducing their utility bills. For example, in 2015, Californians saved on average $550 on utility bills due to innovations in energy efficient appliances and other efficiency measures.
So why isn't everyone investing in energy efficiency, or going solar? The answer usually lies in the up-front costs. Property Assessed Clean Energy (PACE) provides a solution to this up-front cost barrier by opening residential energy (and water) efficiency investments to most homeowners. Introduced by the California state legislature in 2008, PACE financing provides 100% of project costs upfront, allowing homeowners of all income levels to make meaningful efficiency upgrades. The improvements are then paid off over time through an additional line item on their property tax bill. Homeowners can slash their fossil fuel consumption immediately, and later cover the upfront costs through savings reaped from lower utility bills.
There are some unique aspects of the PACE model that have made it especially effective for California homeowners. For example, oversight from city and county governments provides consumer safeguards not found in other home improvement financing options. Approval is based on home equity, not personal credit, and the financing is attached to the property. So say if the home is sold, it can sometimes be transferred to the new owner — who then reaps the benefits of low energy costs and a more comfortable home.
The San Francisco Bay Area is well known for its leadership in the green energy economy. As local governments have approved PACE programs for their communities and homeowners have started to hear about the benefits, more and more homes have renovated to produce renewable electricity and become more energy efficient through PACE financing. Across California, more than 90,000 homes have been upgraded this way. Of course, this is just the tip of the iceberg. There are almost 9 million houses in California. If just one-tenth of them added solar panels or made the kind of energy efficiency upgrades financed by PACE, that could save 136 billion kWh of electricity and reduce 36 million tons of carbon dioxide emissions. As PACE continues to scale up, what started as an idealistic concept is on track to take a hefty bite out of California's carbon footprint.
The economic benefits of this home renovation activity are also significant. Residential PACE-driven home improvement activity spurs demand for construction-services and has led to the creation of almost 20,000 new jobs across California, most of which cannot be outsourced or automated. In the Bay Area alone, 800 jobs have been created as a direct result of residential PACE financing.
California has always held a leadership position in the fight against climate change. The state's renewable portfolio standard (RPS) policy mandates 50% renewably-sourced electricity by 2030, and a recent bill in the state Senate would mandate 100% clean energy by 2045. The PACE movement supports this goal by providing the means and the momentum to implement home energy and efficiency upgrades for a broad cross-section of homeowners.
In the realm of home energy use, the PACE model presents us with an opportunity to step up and be leaders in our communities. Unlike other environmental choices, we don't have to choose between our ethics and our wallet. With PACE, homeowners can reduce monthly expenses and support the local economy, all while reducing our collective carbon footprint.