Federal Reserve Bank of San Francisco

Community Development

Can Cities Lead the Way in Innovative Energy Retrofits for Single-Family Homes?

Author(s):

March 2014

Community Development Investment Review

The American Recovery and Reinvestment Act of 2009 pointed to an era of expanded energy efficiency, one that, as the well-known McKinsey’s carbon abatement curve posits, would in effect be self-financing. The “Recovery through Retrofit Report” from the Vice President’s office in late 2009 detailed a distinct financing mechanism, Property Assessed Clean Energy (PACE), which would “enable the costs for energy efficiency retrofits to be added to an owner’s property tax bill… which takes the same priority as traditional property tax liens and assessments.” The Harvard Business Review would round out the year by identifying PACE as one of 10 “Breakthrough Ideas for 2010.” The future looked exceedingly energy efficient. However, behind the promise lurked several issues.

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