New Financing Model for Home-Energy Efficiency Upgrades Goes to Governor

Homeowners in Rhode Island can increase the energy efficiency of their homes under a new model of financing that was approved by the General Assembly last week. 

The legislation would allow homeowners in participating cities and towns to access a low-cost, fixed-rate loan for energy upgrades that would become an assessment on the property, much like a sewer assessment. 

The legislation was sponsored by the chairman of the House Environment and Natural Resources Committee, Rep. Arthur Handy, and Sen. William J. Conley Jr. of East Providence. 

The Property-Assessed Clean Energy (PACE) program is modeled after a similar program in Vermont. It would allow homeowners to make otherwise costly energy efficiency or renewable energy generation improvements without the up-front costs, allowing them to pay for them incrementally over the course of up to 20 years.

The assessment would stay with the property and would transfer to the next owner if the home were to change hands before it is completely paid. 

“PACE will make it practical for mainly middle-class homeowners who might otherwise be unable to afford energy improvements to make them, saving them money on their energy bills now and in the future and adding to the value of their property. Besides helping those homeowners, PACE will contribute to our economy by generating construction and renovation activity, and will help reduce our state’s carbon footprint. This legislation is a win-win-win for our state,” said Rep. Handy (D-Dist. 18, Cranston). 

Sen. Conley added: “This is an innovative and fair way to make improvements that will benefit not only the current owner of a property, but anyone who might live there in the future, as well as our communities, our environment and our economy. PACE is a great opportunity for Rhode Island in so many ways.”

The legislation has been forwarded to the governor. It would be up to each municipality in the state to decide whether to become a participating PACE community. 

Under the PACE designation, a municipality may enter into a written agreement with any homeowner who has met the following requirements:

• An energy savings analysis approved by the Office of Energy Resources or an analysis performed under plans approved by the Public Utilities Commission (PUC);
• An energy efficiency and/or renewable energy project description approved by the Office of Energy Resources;
• A commitment from a financial institution to provide funds to complete a qualifying energy-efficiency or renewable energy project.

The debt would then be assessed to the house, much like an assessment from a sewer or water connection, so if the property were to change hands, the debt would become a lien on the property that the new owner would pay off up front or by continuing the future payments.