TAMPA — Hillsborough County is close to creating a new way for property owners to pay for upgrades to make their homes or businesses more energy-efficient or hurricane-resistant.
The County Commission recently signaled that it wants to start a Property Assessed Clean Energy, or PACE, program that allows certain environmentally friendly improvements to be financed through a home or business property tax bill.
Under the program, third-party vendors can provide loans to property owners to put toward installing certain renewable energy generators, such as solar panels, or to fixes that lower energy consumption, like a more modern air conditioning unit. Fortifying a property with wind-resistant improvements would qualify as well.
Unlike with more traditional lenders, a homeowner or business in the PACE program would pay back the loan through an assessment on their property.
Commissioners voted unanimously in November to have county staff draw up requirements for vendors wishing to participate.
“A lot of people are looking at energy savings when they’re redoing their houses,” Commissioner Sandy Murman said. “They’re making costly home improvements, and they want energy savings in their homes, and I do believe that this could be very beneficial to those, and it will be their decision not ours.”
The Florida Legislature gave the green light for localities to create PACE programs in 2010. Since then, counties across the state have slowly implemented their own versions. In 2013, Pinellas County allowed commercial businesses to seek out PACE loans, but not homeowners.
Under Hillsborough’s proposal, any property owner can participate. While the county will allow certain qualifying vendors to offer the loans and it will advertise the program on its website, the county will not be the lender and won’t be liable if an individual has a bad experience.
For property owners, the advantage is they can pay for expensive upgrades without any cash up front. The improvements could save them money in the long-run and increase the value of their homes.
Typically, there are fewer eligibility requirements for a PACE loan than other financing options.
However, that can also mean higher interest rates than a traditional loan. State law also requires PACE liens to take precedent over other mortgages, which can make selling a home or refinancing more complicated.
There’s uncertainty, too, since it’s still relatively new.
“The thing about the PACE program is they’ve only been around for five years,” said county finance director Tom Fesler. “I imagine a lot of jurisdictions are going to have them shortly. And some (problems) may show up.”
Companies looking to provide PACE loans say they are in high demand elsewhere in Florida and can help businesses grow.
“Every week when I drop into my contractors’ offices, they ask me when is the program going to be available in Hillsborough,” Arturo Gonzalez, a regional account manager at Ygrene Energy Fund, told commissioners this month.
Commissioners have considered implementing a PACE program several times in the past but didn’t act. That is likely to change.
“This is a long time coming,” then-commissioner Kevin Beckner said. “There were a lot of questions, there was a lot of uncertainty about these programs, but I think it’s been very clear that this is the direction we need to go.”
Contact Steve Contorno at [email protected] Follow @scontorno.