The Impact of PACE Funding on Solar Adoption
Jonathan Eyer, Research Assistant Professor in Policy Analysis and Economics
Abstract: The Property Assessed Clean Energy (PACE) Act allows the cost of energy saving investments like solar panels to be paid via property taxes rather than with traditional loan payments. The costs of PACE financing are low to the government and may provide a more cost-effective method of inducing solar panel installations than other mechanisms like subsidies. This paper provides evidence that PACE availability results in large increases in solar panel installations. This behavior exists both in California, which was an early PACE adopter, but also in Missouri, a later PACE adopter which may be considered less amenable to green solar preferences. Importantly, the installation benefits of PACE are not permanent and there is evidence that the installations decline in the instances where PACE authority is removed.