The HERO Program
, which launched December 2011 in Riverside County, California, has been named the Nation's largest PACE financing program that helps residential and commercial property owners pay for solar installation, energy retrofits, and water conservation projects.
Authorized by state law (AB 811 and AB 474) the program is facilitated by Renovate America for the Western Riverside Council of Governments (WRCOG). With the HERO program a homeowner enters into an agreement in which the property owner agrees to repay the cost of the improvements through an annual property tax assessment lasting up to 20 years and if a building is sold or transferred, the agreement remains tied to the property. One of the reasons the HERO program is able to close residential PACE deals because it requires property owners to meet Department of Energy lending guidelines.
In September 2012 WRCOG announced the approval of more than $50 million for residential energy retrofits, with half of that funding approved since July. Approximately 2,000 homeowners have applied for HERO PACE financing and most of these applicants- around 1,250, have qualified. About 300 residential projects worth $5 million have been completed and two-thirds of the projects have funded energy efficiency measures. The average loan amounts are $20,000 for residential properties and $600,000 for non-residential properties in increments of 5 years base on the type and cost of improvements at a 5.85-8.25% rate depending on the term.
This program is able to create and maintain construction-related jobs and reduces and delays the need for costly construction of energy generation while increasing property values and tax roll revenues to jurisdictions. They currently have nearly 400 contractors participating in the program.
Reasons why Riverside says their program works is because of the large pool of candidate properties, up-front funding removes investment impediment for property owners, repayment tied to property tax over a period of years, and list of eligible improvements is extensive.
Western Riverside Council of Governments HERO Information