Recent US Regulatory Developments Regarding Renewable Energy Loans

July 10, 2012
To promote renewable energy sources and efficient energy consumption, more than 25 states have instituted Property Assessed Clean Energy (PACE) programs. PACE programs authorize local governments to make loans to homeowners for energy related home improvement projects such as the installation of solar panels or energy efficient windows. However, mortgage holders have raised concerns about provisions in many PACE programs that give liens securing PACE loans priority over mortgages. This update discusses recent regulatory actions that may affect PACE loans as well as issues regarding financing or securitizing such loans.