The Susanville City Council unanimously approved a resolution authorizing the city’s participation in the HERO Property Assessed Clean Energy program at its Wednesday, Feb. 1 meeting.
HERO PACE financing enables homeowners to make energy- and water-efficiency improvements and pay for them over time at a fixed interest rate through an additional line item on their property taxes. HERO payments may have tax benefits, and homeowners may see immediate savings on their utility bills. Residents of Susanville may begin submitting applications to HERO this summer, according to a statement from the company.
“HERO financing is a public-private partnership that can save Susanville homeowners money on their utility bills, provide a boost to local businesses, and reduce emissions — all at no cost to taxpayers,” said Robert Bendorf, Market Development Manager for Renovate America, the company that administers the HERO Program. “With HERO, a broad range of homeowners will be able to access energy- and water-saving home improvements, while enjoying several consumer safeguards that aren’t found with other types of financing.”
HERO is launching in neighboring Shasta County later this month, and further action is still needed to bring HERO to unincorporated areas of Lassen County.
HERO has helped fund residential efficiency projects in 88,100 households in California, totaling $2.13 billion in financing. By stimulating home renovation activity, the HERO Program increases demand for local contractor services. Since launching in 2011, HERO is estimated to have spurred the creation of 18,100 local California jobs, many in sectors like construction that cannot be outsourced or automated. Cities and counties benefit through economic stimulus and local job growth while helping their communities reach state-imposed water and energy savings goals.
A wide variety of energy-saving products are available through HERO. Some of HERO’s most popular products include including solar power panel installations, energy efficient HVAC systems, energy-saving windows and doors, and roofing and insulation.
HERO can also be used to finance a wide variety of products to help homeowners cut down on water use, including high-efficiency toilets, faucets and showerheads; drip irrigation systems; rainwater catchment systems; gray water systems; and artificial turf and other drought-tolerant landscaping.
PACE has been adopted to address a problem conventional financing products have not solved. Each year, several million American homeowners replace a system that affects home energy or water consumption. Unfortunately, the majority of homeowners still select the least-efficient solution.
As the country’s largest PACE platform, HERO allows homeowners to choose more efficient improvements: HERO finances 100 percent of the home improvement, requiring no upfront cash outlay; the term of the financing is based on the useful life of the product, up to 25 years, lowering the size of monthly payments; and collection is conducted through regular property tax payments. The products installed must meet federal and state efficiency standards, potentially enabling homeowners to lower monthly utility bills and help pay for the cost of the improvement over time.
PACE was also designed to help achieve public policy objectives. The $2.13 billion financed through HERO to date are projected to save $3.51 billion on energy bills, conserve 13.4 billion kWh of electricity, reduce greenhouse gas emissions by 3.6 million tons (the equivalent of taking 761,000 SUVs off the road for a year), and save 7.9 billion gallons of water (the equivalent of 252 million showers). HERO has already generated a local economic impact of $3.69 billion in California.
Because of the public-private nature of the program, PACE enables local governments to add additional requirements to protect consumers not found in other payment options like credit cards or home equity loans.
For example, the HERO Program requires contractors to be licensed with the state and in good standing with HERO, homeowners to obtain all required permits, products and labor to meet fair pricing standards, homeowners to use products certified as efficient by the U.S. Department of Energy or water-conserving by the Environmental Protection Agency, and that payment only be made when the homeowner signs off that the job has been successfully completed.
The HERO Program has now been adopted by 442 communities in California, within 50 counties. HERO’s success in California is part of a national trend, with commercial PACE legislation now enabled in 33 states and residential PACE expanding in Missouri and Florida. The White House last year held up the PACE model as a mechanism to expand access to clean energy to more homeowners. At the same time, FHA issued clear policy guidance endorsing PACE and allowing residential PACE assessments to exist concurrently with home mortgages secured by the FHA in the event of purchases and refinances.
Cities and counties need only pass a resolution in order to make PACE programs like HERO available to local property owners. The HERO Program has received numerous awards, including the Governor’s Environmental and Economic Leadership Award, the Urban Land Institute Best of the Best, the Southern California Association of Governments President’s Award for Excellence, and most recently, inclusion in the 2015 Global Cleantech 100.
Taking part in the HERO Program is 100 percent voluntary for both jurisdictions and property owners. The program is cost neutral to participating local governments.
Through HERO property advisors, the program provides assistance free of charge to real estate professionals involved in selling or refinancing properties with active HERO financing. Residents interested in HERO financing for their homes, visit heroprogram.com/ca/northern-california.