The California Legislature has passed two bills that will work in tandem to provide strong consumer protections and a regulatory framework for the state’s residential PACE programs. AB 1284, sponsored by Assembly Member Matt Dababneh, and SB 242, sponsored by Senator Nancy Skinner both passed with overwhelming bi-partisan support.
In less than 10 years, PACE has grown from a niche market option to the most successful energy financing program in California history. “Nearly $4 billion in upgrades shows that California homeowners embrace PACE as the best way to pay for improvements that make homes more comfortable, energy efficient and resilient against natural disasters,” said David Gabrielson, Executive Director of PACENation. “State regulation is an important next-step in the evolving PACE marketplace, and we are thrilled that the legislation provides a pathway to ensure the safety and protection of PACE consumers.”
Under AB 1284, the California Department of Business Oversight (DBO) will become the regulatory body for residential PACE administrators operating within the state. The legislation establishes licensing requirements for contractors, new underwriting guidelines that include income verification and ability-to-pay standards, and other consumer protection enhancements. “The leadership of Senator Skinner and Assemblyman Dababneh has evolved PACE into a long-term viable solution for homeowners, while providing a model for states across the nation to base PACE on income and ability-to-pay, and with a comprehensive suite of consumer protections and enforcement tools,” said JP McNeill, CEO of Renovate America.
SB 242 focuses squarely on standardizing best practice guidelines and disclosures for residential PACE administrators. The legislation requires that PACE administrators record a live phone call with customers to confirm agreement of terms, provides homeowners a 3-day right to cancel, and mandates reporting to public agencies. “Renew Financial is honored to stand with Assemblyman Dababneh and Senator Skinner, as well as the consumer advocates, business leaders and environmental organizations who worked so hard to strengthen PACE financing for California homeowners,” said Cisco DeVries, CEO of Renew Financial.
SB 242 was strongly supported by League of Conservation Voters California and Efficiency Demand Management Council – and both bills were strongly supported by Sierra Club California, Natural Resources Defense Council, Environmental Defense Fund, Advanced Energy Economy, California Solar Energy Industries Association, Vote Solar, Climate Action Campaign, Brightline Defense, Build It Green, California Energy Storage Association, Center for Sustainable Energy, and Cleantech San Diego. In addition, a host of local government leaders and the California League of Cities and California State Association of Counties were on board.
PACENation is proud to have been a part of the industry-wide stakeholder coalition that worked for a year on the success of these bills. Negotiations between low-income consumer advocates, environmental groups, PACE program administrators, and the banking industry have resulted in California legislation that sets a regulatory precedent for R-PACE programs throughout the country. “Someday, I would like to see the money and energy saving benefits of PACE become available to every homeowner in the Country, and these bills put in place a framework to scale R-PACE safely and effectively,” said David Gabrielson, Executive Director of PACENation.