As PACE Financing Grows Up, the Industry Grapples With Lending Standards and Consumer Protections

By many measures, the financing programs referred to as PACE — or property-assessed clean energy — are among the most successful energy-efficiency financing tools in U.S. history.

The programs, which fund building efficiency upgrades and rooftop solar panels through loans paid off in tandem with property taxes, are closing in on $4 billion in transactions across 140,000 American homes, and have created 35,000 jobs.

But if you’ve read any number of headlines on the model in recent months, or if you count yourself among the seemingly small group of homeowners who have had a negative experience with this type of financing, you may be more circumspect about PACE’s prospects.

Critics contend that residential PACE programs have used questionable lending practices akin to those that led to the subprime crisis — and lack both consumer protections and accountability in terms of energy savings achieved.

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