SACRAMENTO, Calif. (March 6, 2019) – The Schwarzenegger Institute, part of the University of Southern California’s Sol Price School of Public Policy, today released a comprehensive study highlighting the significant positive impacts of the Property Assessed Clean Energy (PACE) program, including job creation, economic investment, energy savings and insurance savings. The PACE program was established in California by state legislation in 2008 and is enabled by local governments. It provides lower-cost, long-term financing for energy and resiliency improvements that is more accessible than other types of financing and includes built-in consumer protections.
The study, “Impacts of the Property Assessed Clean Energy (PACE) Program on the Economies of California and Florida,” was conducted by USC Price School Research Professor Adam Rose and Associate Research Professor Dan Wei by performing a regional economic impact analysis of PACE financing by the nation’s leading PACE provider, Ygrene Energy Fund. USC’s findings account for only a fraction of the total PACE market, but highlight the positive impacts on a range of economic, energy and environmental indicators, including:
- Job creation: Ygrene PACE financings to date are projected to create more than 21,000 new job-years of employment in the three states in which Ygrene operates, including approximately 10,000 new job-years in California.
- Community investment: Ygrene PACE investments in communities across three states have grown and will grow local economies by more than $1.5 billion as a broad measure of Gross Domestic Product (GDP), including more than $850 million in California.
- Energy savings: In California, over the useful life of improvements, PACE is on track to reduce electricity consumption by more than 3.6 million megawatt hours, natural gas consumption by more than 2.8 billion cubic feet and will save more than 2.3 billion gallons of water.
- Reduced GHG emissions: Ygrene PACE improvements are projected to reduce greenhouse gas emissions by more than 1.1 million metric tons since its inception.
“In addition to the direct benefits of PACE financing, which are rather straightforward, we also examined the indirect benefits of PACE and utilized principles from Benefit-Cost Analysis (BCA) to determine our findings,” said Professor Rose. “As states and communities look to build more resilient communities and meet both their environmental and economic goals, it’s clear PACE is a valuable public policy tool.”
The study also found that PACE programs have broadened significantly in recent years and now also include financing for saving water and reducing vulnerability to disasters for both residential and commercial properties. It achieves its direct societal objectives while providing financial gains to financing recipients and those implementing the building improvements. The program does so by reducing utility bills, saving on disaster insurance premiums, preventing business disruption, and generating cost savings on building repairs or reconstruction following a natural disaster. In addition, PACE financing is easier to obtain and more accessible to some who could not otherwise secure financing through more conventional lending-related instruments.
The study was funded by Ygrene Energy Fund. A complete copy of the study is available at http://schwarzeneggerinstitute.com/research