How to Qualify for PACE Financing in California

PACE financing in California

Property Assessed Clean Energy (PACE) financing is an innovative way to fund energy-efficient upgrades and renewable energy installations for residential and commercial properties. PACE financing in California offers property owners the opportunity to enhance their properties’ energy efficiency without the burden of upfront costs. If you’re considering PACE financing in California, understanding the qualification process is essential. This guide will walk you through the steps to qualify and benefit from this program.

Understanding PACE Financing

PACE financing allows property owners to finance energy-efficient improvements through a property tax assessment. The loan is repaid over time as part of the property tax bill, making it a convenient and accessible option for many. Common projects funded by PACE include solar panels, energy-efficient windows, HVAC systems, and water conservation measures.

Eligibility Criteria for PACE Financing in California

  1. Property OwnershipTo qualify for PACE financing in California, you must be the legal owner of the property. Both residential and commercial properties are eligible, but they must meet specific criteria set by the PACE program administrators.
  2. Property LocationPACE financing is available in many regions across California. Ensure your property is in a participating area by checking with your local PACE program provider.
  3. Equity in the PropertyPACE financing typically requires that you have sufficient equity in your property. This means the value of your property should exceed the amount of any existing mortgages or liens. Most programs require at least 10-20% equity.
  4. Mortgage StatusYour mortgage payments should be current, and you must not have a history of recent late payments. Some programs may also require that you are not in foreclosure.
  5. Tax Payment HistoryYou must be current on your property taxes. Any delinquencies or unpaid taxes may disqualify you from PACE financing.
  6. Project EligibilityNot all energy-efficient improvements qualify for PACE financing. The project you plan to undertake must be on the list of eligible improvements provided by the PACE program. Common eligible improvements include solar energy systems, energy-efficient HVAC systems, windows and doors, insulation, and water conservation measures.

Steps to Qualify for PACE Financing

  1. Research and Select a PACE Program ProviderSeveral PACE program providers operate in California, including HERO, Ygrene, and CaliforniaFIRST. Research these providers to find the one that best suits your needs.
  2. Verify EligibilityContact your chosen PACE provider to verify your eligibility. Provide them with information about your property, mortgage status, and the proposed project.
  3. Property AssessmentA property assessment will be conducted to determine the feasibility of the proposed improvements. This assessment ensures that the project meets the program’s criteria and will result in energy savings.
  4. Submit an ApplicationOnce your property is deemed eligible, you’ll need to complete a formal application. This application will require details about your property, the proposed improvements, and your financial status.
  5. Approval and Financing AgreementAfter your application is reviewed and approved, you’ll receive a financing agreement. Review the terms carefully, including the interest rate, repayment period, and any associated fees.
  6. Complete the ProjectUpon signing the financing agreement, you can proceed with the approved project. Ensure that you use contractors who are registered with the PACE program to guarantee compliance with program standards.
  7. RepaymentRepayment of the PACE financing will be included in your property tax bill. Payments are typically spread over a period of 10 to 20 years, depending on the program and the type of improvement.

Benefits of PACE Financing

  1. No Upfront CostsPACE financing allows you to undertake significant energy-efficient improvements without the burden of upfront costs. This makes it accessible to a broader range of property owners.
  2. Long Repayment TermsThe repayment period for PACE financing is long, often up to 20 years, making monthly payments manageable.
  3. Increased Property ValueEnergy-efficient improvements can increase the value of your property, making it more attractive to potential buyers.
  4. Environmental ImpactBy investing in energy-efficient upgrades, you contribute to reducing greenhouse gas emissions and promoting environmental sustainability.


PACE financing in California offers an excellent opportunity for property owners to enhance their properties’ energy efficiency and reduce their environmental footprint. By understanding the eligibility criteria and following the qualification steps, you can take advantage of this innovative financing option. Whether you’re looking to install solar panels, upgrade your HVAC system, or implement water conservation measures, PACE financing can help you achieve your goals without the financial strain of upfront costs. Start your journey towards a more energy-efficient property today!

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