Starting today, more than 240,000 homeowners in 28 more California communities who want to go solar, or make efficiency-related repairs and upgrades can finance 100% of their home projects through the HERO Property Assessed Clean Energy (PACE) Program. HERO financing allows homeowners to pay for projects like new heating and air conditioning systems, drought-tolerant landscaping and efficient windows and doors over time and at a fixed interest rate. They do so through an additional line item on their property taxes. As a result, HERO financing payments may have tax benefits, and many homeowners see immediate savings on their utility bills by investing in efficiency upgrades.
“HERO is already empowering homeowners across California to make their homes more comfortable, lower their utility bills and combat climate change. We look forward to doing the same thing for the homeowners in these new communities,” said Blair McNeill, Vice President of Market Development at Renovate America, the company that administers the HERO Program. “HERO will also provide a boost to local businesses and create jobs in these cities and counties, just as it has across California.”
By stimulating home renovation activity, the HERO Program increases demand for local contractor services and is estimated to have spurred the creation of 18,100 local California jobs since its launch. Many of these jobs, like those in the construction industry, cannot be outsourced or automated. In total, HERO has already generated a positive economic impact of $3.69 billion in California.
With today’s announcement, 88 percent of California households now have access to this innovative financing program. HERO launched this week in the cities of Belmont, Blue Lake, Dorris, Etna, Fort Bragg, Fremont, Grass Valley, Half Moon Bay, Hillsborough, Isleton, Loyalton, Nevada City, Newark, Pacifica, Paradise, Point Arena, Portola Valley, Redding, San Leandro, San Luis Obispo, Sutter Creek, Tehama, Watsonville, Weed, Yreka and Yuba City, and in the unincorporated areas of Colusa and Shasta Counties. Residents of these communities may now submit applications for HERO financing. Over the last five years, HERO has helped fund residential efficiency projects in more than 88,100 households across California.
A wide variety of energy-saving and water-conserving products are available through HERO. Some of HERO’s most popular energy products include rooftop solar panels, HVAC systems, energy-saving windows and doors, roofing, and insulation. For cutting down on water use, homeowners commonly use HERO to install high-efficiency toilets and showerheads, drip irrigation systems, rainwater catchment systems, and artificial turf and other drought-tolerant landscaping.
The home improvements 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).
PACE addresses a problem conventional financing products have not solved. Each year, several million U.S. homes will have systems replaced that affect energy or water consumption. Unfortunately, most homeowners select less-efficient solutions based on the sticker price. Compared to more efficient products that may have a higher sticker price, these less-efficient products end up costing more over time to operate and maintain.
The HERO Program provides crucial new options to homeowners to choose more efficient improvements: PACE 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.
PACE enables local governments to add additional requirements to safeguard 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, and each contractor must agree to not be paid until the homeowner signs off that the job has been successfully completed.
PACE programs like HERO have put in place policies that are raising the bar for how homeowners experience home improvement. For example, HERO was the first residential PACE program to provide written disclosures to its customers modelled after the federal Know-Before-You-Owe mortgage form. A HERO employee calls each customer to ensure they understand the financing terms before they sign their contract. Finally, HERO provides extensive post-funding investigative and dispute resolution support, if necessary.
