Milwaukee - Milwaukee Shines PACE Solar Loan Program

August 10, 2010

Summary

This program is temporarily suspended and undergoing a redesign; it is likely that it will re-emerge as a revolving loan program rather than PACE. Check the program website for updates. The state of Wisconsin permits political subdivisions (cities, villages, towns, and counties) to offer Property Assessed Clean Energy (PACE) loan programs to assist local residents in making energy efficiency and renewable energy improvements (click here for more information on the state law authorizing PACE programs). PACE programs allow property owners to repay a loan for qualifying equipment through a special assessment attached on their property taxes, which remains attached to the property rather than the property owner. In March 2010 the city of Milwaukee adopted legislation creating one of the state's first PACE loan programs designed to provide low-interest loans for residential solar electric and solar hot water systems. Milwaukee's PACE program offers loans from $5,000 - $20,000 for the installation of qualifying solar equipment on owner-occupied Milwaukee homes. Loan terms may range from 5 - 15 years depending on the size of the loan (e.g., loans of $7,000 or less have a term of 5 years). The interest rate is fixed for the life of the loan at Prime plus 2%, leading to a total interest rate of 5.25% as of this writing. System size is limited to 0.5 - 3 kilowatts (kW) for solar electric systems and 1 - 3 panels for solar water heating systems. Eligible costs include solar equipment, installation labor and up to $500 of structural reinforcement work. Expenditures associated with energy efficiency improvements and solar space heating systems are not eligible for a loan under this program. As in the general description of PACE programs above, recipients repay the loan through a special assessment on their property taxes, and the loan remains attached to the property in the event that the original recipient moves. There is no penalty for pre-payments. Failure to make loan payments will result in additional interest and penalty charges in the same manner as delinquent property taxes. This could ultimately result in default and foreclosure on the property. Applicants and homes must meet a variety of requirements in order to be eligible for a loan, including but not limited to:

• Applicant must be a customer of We Energies
• The assessed value of the home must be at least 110% of the outstanding mortgage and solar loan amounts.
• The home must meet one of several minimum energy efficiency benchmarks as specified by the state Focus on Energy (Efficiency First) program and applicants must supply a Focus on Energy letter of pre-approval with their application.
• Applicant must receive a site assessment from a certified site assessor to determine if the home is a suitable candidate for solar energy

The program has an initial budget of $135,000, which program managers expect will be sufficient to fund 9 - 12 loans. It is designed as a revolving loan fund where more loans will be made as money from prior loans is repaid. Applications are currently available and will be evaluated on a first-come, first-served basis beginning May 1, 2010. For further information please consult the program website, which contains detailed program manuals for both applicants and installers.