Jerry Brown Sues Fannie and Freddie Over PACE Solar Power

Property Assessed Clean Energy (PACE) was set for a booming takeoff. At least 22 states officially signed on in support. The popular financing program was first successful in Berkeley, where it originated as a means to promote home solar power. But then, everything came to a screeching halt when Fannie Mae and Freddie Mac suddenly laid siege to the popular financing program by forbidding homeowners to participate.

Taken aback, municipalities have frozen their PACE programs and a virtual tsunami has torn through the building and greentech industries. Even pleas from the Obama administration fell on deaf ears. But now somebody has begun the fight to win PACE back. California Attorney General Jerry Brown, who is also a candidate for governor, is suing Fannie Mae and Freddie Mac.

His claim is that the move by the two quasi-governmental lenders and their regulator, the Federal Housing Finance Agency (FHFA), violates California’s law authorizing the locally administered PACE programs. Brown asserts that the FHFA’s guidelines restricting homeowner participation is “severely hampering California’s efforts to assist thousands of California homeowners to reduce their energy and water use, help drive the state’s green economy, and create significant numbers of skilled, stable and well-paying jobs.”

Indeed, PACE is widely accepted as a viable means of achieving improved home efficiency and increased use of renewable energy on a national scale, with the Obama administration doling out $150 million of stimulus funding in support thus far. PACE programs allow property owners to borrow money from their city or county for energy efficiency or renewable energy upgrades and then pay them back through a voluntary increase in property taxes.

In addition to its violation of California law, Jerry Brown’s lawsuit also alleges that the FHFA violated federal law by not conducting an environmental impact review as to the effect of its lender guidelines. By enacting the restrictions, the lawsuit states, Fannie Mae and Freddie Mac have “deprived California and its citizens of the associated residential energy and water efficiency and renewable energy benefits, thereby significantly impacting the human environment.”

Jerry Brown is the first to strike back at the FHFA and the two private lenders, but he will very likely not be the last. The town of Babylon, New York is also threatening legal action, according to Grist, and Sonoma County, CA has opted to reopen its program with or without Fannie or Freddie’s approval. Still, some 200 PACE programs have been frozen in the wake of the FHFA’s announcement earlier this month.

Via New York Times
Photo Credit: Political Lunacy & SF Citizen

Posted on July 16th in Solar News by Dan.