In an attempt to have more Santa Monica businesses and homeowners proactively install more energy efficient and renewable energy systems within their respective homes, the City Council unanimously approved last Tuesday night as part of its consent calendar to make homeowners eligible to participate in a financing program to cover the costs of such improvements.
Known as the California Home Energy Retrofit Opportunity (HERO) Program and part of the Property Assessed Clean Energy (PACE) financing program, property owners in Santa Monica will, according to City staff, now be able “to borrow the cost of energy efficiency improvements and renewable energy systems by placing a voluntary assessment on their property tax bill.”
“Making PACE financing available to Santa Monica property owners has the potential to stimulate the installation of energy efficiency improvements and renewable energy systems,” City staff stated.
Both commercial and residential property owners in Santa Monica are eligible to participate in the HERO program. Any and all participation in the program is voluntary, according to City staff.
As the financial burden of installing energy efficiency improvements and renewable energy systems would fall entirely on the property owner, no costs would be endured by City Hall.
Those who choose to participate in the program would receive financing through a bond attached to the property.
“Participating property owners repay the cost of the improvements through an assessment levied against their property which is payable in semi-annual installments on property tax bills,” City staff stated. “A lien is filed against the property as security until the assessment is re-paid. The assessment remains with the property should the owner transfer or sell the property before the loan is re-paid.”
According to City staff, the HERO program was launched in 2012 and funded more than $25 million in energy and water efficiency and renewable energy investments in 4,000-plus homes within its first year.
A statewide program, council members had to adopt a resolution to allow Santa Monica property owners to participate in HERO. Such a resolution was attached to the consent calendar item.
The program specifically aims to help property owners install energy and water efficiency improvements, renewable energy systems, and electric vehicle charging infrastructure.
“PACE financing through a program such as the California HERO Program mitigates two key barriers that often prevent property owners from installing energy efficiency, water efficiency and renewable energy projects,” City staff stated. “It eliminates the need for property owners to pay out of pocket up-front costs for improvements, and … it establishes a loan obligation that is attached to the property and not to the individual borrower.”
In its report to council members, City staff stated the financing program could help spur the economy.
“The availability of PACE financing can be a catalyst in spurring the local economy by creating energy retrofit jobs and stimulating construction activities,” City staff stated. “Energy retrofit improvements to existing buildings would allow property owners to reduce energy and water use as well as greenhouse gas emissions. Participating property owners would reduce operating costs for electricity, natural gas and water and improve the comfort and safety of their homes and businesses.”