U.S. Crackdown Forces Calif. To Yank Home Solar, Energy-Retrofit Loans

(excerpted from NYT article)

The California Energy Commission’s (CEC) decision removes $30 million in federal stimulus funds awarded by the state last February to five counties for county and municipal home energy loans. The state said the five were expected to create 4,400 jobs and avoid 187,000 tons of greenhouse gas emissions through 2012.

Loans from the property-assessed clean energy (PACE) program are tied to property tax bills, allowing homeowners to extend payments and carry loans over when the house is sold.

A 2009 bill expanded California’s program to cover water-efficiency improvements in addition to energy projects, and Gov. Arnold Schwarzenegger (R) signed a bill last April establishing a $50 million reserve fund to back local government bonds.

The programs had also been gaining momentum in other states. About 18 states and dozens of local governments have passed legislation allowing governments to aggregate the loans and issue bonds to get a better interest rate for such programs.

But the Federal Housing Finance Agency (FHFA) issued a May statement against the programs, saying the loans cannot take precedence over primary mortgages. The agency followed up this month with a policy statement covering Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance lenders (Greenwire, July 7).