PACE isn’t broken — don’t fix it

An aerial view of homes in Temecula, in southern California. (Photo: Jacob Findlay, via Shutterstock)

Anyone who has lived through a summer in Sacramento knows that air conditioning is not a luxury, it is a necessity. When the temperature is well into the 90s, fans can only do so much; and when wildfire smoke blows in and blankets the area for weeks at a time, or when a heat wave strikes, conditions can get dangerous for people without air conditioning.

Yet, about 10 percent of the customers at my home improvement contracting business have been living for years with no AC – or in some cases, no heat, a leaky roof, or with outdated and inefficient heating and cooling systems that cost them a fortune to run.

I can help these folks access the critical home upgrades they need by using PACE (Property Assessed Clean Energy) financing. But a proposed PACE bill in Sacramento, SB 476 would make PACE financing inaccessible for many California homeowners, forcing me to lay off workers at a time when our region needs more secure, good-paying jobs.

PACE is an innovative form of home improvement financing that covers energy and water efficiency and renewable energy upgrades, as well as earthquake and wildfire hardening and repair projects.

But the fact is that existing PACE laws and regulations already provide the best consumer protections in the industry.

California first passed legislation approving PACE financing back in 2008, with a vision of working toward the state’s climate goals while helping homeowners achieve significant energy savings. Subsequent legislation brought oversight by the Department of Financial Protection and Innovation, as well as enhanced consumer protections.

Today PACE is active in hundreds of communities across the state, driving growth in the home improvement industry and accelerating our state’s pursuit of energy efficiency and climate resilience. PACE also helps homeowners add earthquake or wildfire hardening upgrades, or quickly make repairs after a natural disaster.

SB 476 aims to add more consumer protections and require a home energy audit to prevent homeowners from being oversold unneeded solar projects. That sounds laudable on the surface.

But the fact is that existing PACE laws and regulations already provide the best consumer protections in the industry. And the added cost and trouble of the energy audit – which isn’t even relevant for many types of projects like roofing, heating or AC – would be too much of a hurdle for many homeowners.

The PACE industry is already tightly regulated. PACE uses a rigorous approval process to make sure homeowners are in good financial standing to repay the financing. Additional consumer protections include live, recorded phone calls with property owners on every project to go over the details of the assessment; project inspection prior to payment,  and background checks and extensive training for contractors.

Price controls and other stringent rules prevent overcharging, and homeowners must confirm a project has been completed to their satisfaction before the contractor gets paid. With the strong regulatory oversight and extensive legislation already in place, PACE provides consumer protections that go far above other options like HELOCs or unsecured loans.

PACE is also a proven job creator. I have about 50 employees, and a good 60 percent of my business is financed through PACE. Throughout California, PACE supports several thousand more good-paying jobs. This includes everything from solar designers, to roofers, to window installers and more.

I have completed thousands of PACE-financed projects, many of them for lower-income homeowners needing critical, money-saving energy upgrades. Not one customer has ever come back with a complaint about PACE. This includes the quality of the project but also the way the assessment is processed through their property taxes.

New legislation is not needed when existing laws and regulation are working. A lot of contractor and related jobs are on the line with SB 476. So too is a powerful tool in the state’s effort to reach its climate goals. Ultimately, if this bill passes, homeowners will pay the price.

I urge our leaders in Sacramento to recognize that this bill is harmful and unnecessary.

Editor’s Note:  Jaime Schulz is the owner of American Home Energy Savers, a home contractor business serving the greater Sacramento area.

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