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  • Impacts of the Property Assessed Clean Energy (PACE) program on the economies of California and Florida

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Impacts of the Property Assessed Clean Energy (PACE) program on the economies of California and Florida

Source(s):  University of Southern California (USC)

Property Assessed Clean Energy (PACE) is a way to finance a wide range of energy and water efficiency, renewable energy, and hazard mitigation improvements permanently attached to residential and commercial properties. PACE financing is structured as an assessment to the property and not the property owner. PACE provides one hundred percent of the cost of qualified structural improvements, which the property owner repays annually or semiannually through a special assessment added to the property tax bill. Hazard mitigation improvements help prevent the need to dip into savings to repair damaged structures, prevent business interruption and temporary relocation costs, and also result in insurance premium reductions that stimulate further spending on regional goods and services. 

This study performs a regional economic impact analysis of PACE financing by one of the leading firms in the market—Ygrene Energy Fund, Inc. Since 2013, and through the end of July 2018, Ygrene has provided more than $1.16 billion to finance over 54,500 property improvement projects in over 500 cities and counties, primarily in the residential sector of California and Florida. The authors estimate the net impact of these financing projects on the economies of these two states, focusing on major macroeconomic indicators of gross output (sales revenue), gross domestic product (GDP), personal income, and employment. The authors also estimate the impacts on tax revenues for various levels of government. The estimation methodology includes both direct and various types of indirect effects rippling through the supply chains of the economy. Much of this analysis is based on the use of the Regional Economic Models, Inc. (REMI) Policy Insight Plus (PI+) Model.

The results for California indicate that, during the up-front investment period (2013-2018) of the Ygrene PACE financed property improvements, an average annual increase of gross state product (GSP) of $134.7 million and employment of 1,305 full-time equivalent (FTE) jobs result from the aggregate stimulus effects from the expenditure of the PACE financing. In Florida, the average annual stimulus impacts are a $51 million increase in GSP and 603 FTE jobs during the investment period.

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  • Impacts of the Property Assessed Clean Energy (PACE) program on the economies of California and Florida
  • Publication date 2019
  • Author(s) Rose, Adam; Wei, Dan
  • Number of pages 37 p.

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