PACE (Property Assessed Clean Energy) Explained

PACE (Property Assessed Clean Energy) is a new way to finance home solar power systems or other types of energy efficiency retrofits which first started in Berkeley with the “Berkeley First Program.” The way this program works is the city provides you with a loan to pay for your solar system; you then pay back the loan through your property tax bills over a period of fifteen to twenty years.

This program is gaining momentum as the benefits of it are quite obvious to both homeowners and local governments for a couple reasons.


  1. You, the homeowner, aren’t stuck having to come up with all the cash upfront for the initial installation or forced to reduce the precious equity in your home as a means to to finance your system.
  2. Your loan is backed by the city, and you know they will be around for a while. No need to worry that the third party you are financing through will close up shop and leave you holding the bag, so to speak.
  3. The transferring of the cost and benefits of the system are easily transferred to any new homeowner since the payments of the system are part of the property taxes. So whatever tax liability still remains on the system at the time of purchase is transferred directly to the new homeowner by continual incorporation into the property taxes of the property purchased.


  1. The city administers the program or partners with another company to administer it.
  2. Municipal bonds are then used to finance the program.
  3. The homeowner then gets a site evaluation for the installation of solar power system from whatever company they decide to have install their system.
  4. After the homeowner receives the quote they can apply to the city’s program administrator (for a small processing fee) for funding.
  5. Once the project is approved by the city administrator, the installer is paid directly by the city for the solar system the homeowner chose to install. That’s right, the homeowner pays nothing upfront, unless of course there is a deposit necessary. :-)
  6. The homeowner then begins paying off the system through their property tax bills over the next 15 to 20 years.
  7. If the homeowner ever decides to sell the home then the solar system stays as part of the tax liability on the property. Transferring seamlessly to the next homeowner for their benefit.

You can get more detailed information for specific cities at

Below is a great video about the program and below that is an example of a one such program from the DSIRE website.

PACE program, solar power for your home