The City could resume its position as a green energy leader if a lawsuit filed Wednesday by California’s attorney general reverses a federal move to suspend some clean energy loan programs.
Attorney General Jerry Brown is challenging mortgage giants Fannie Mae and Freddie Mac for essentially stopping a California clean energy program designed to lower utility bills and create jobs.
The lawsuit was good news for San Francisco, which last week suspended its $150 million Green Finance SF program, just three weeks after kicking it off.
“It’s an extremely positive step in the right direction,” said Johanna Gregory Partin, the mayor’s director of climate protection initiatives, of Brown’s lawsuit.
Green Finance SF was designed to provide low-cost loans for residential and commercial property owners so they can make energy-saving improvements to their homes and businesses, whether solar panels or water conservation projects.
The program, also known as Property Assessment Clean Energy, is funded through a citywide Mello-Roos Special Tax District. The loans have no cap and are attached to the property, not the individual owner. The loans are repaid through property taxes over the life of the loan.
But Freddie Mac and Fannie Mae, the main buyers of residential loans, in May questioned these PACE programs nationwide, saying the energy loans are not assessments, but in effect, second loans that should be subordinate to the principal mortgages. Freddie and Fannie said they would reject mortgages on homes whose owners participate in PACE programs.
The suspension of PACE has been a huge blow for San Francisco’s attempt to be a clean energy leader. It has also hurt local companies that had green projects and jobs waiting in the pipeline.
Jeanine Cotter, CEO of Luminalt, a San Francisco solar installation company, said she had to kill two solar water and heat installation projects that were being financed through The City’s loan program.
“There was so much potential and so much promise and a lot of desire to move forward with work that would provide jobs for people in San Francisco,” Cotter said. “Now that promise is on thin ice.”
Green Finance SF
– $150 million loan program
– Loans range from $5,000 to $50,000
– Loan carries a 7 percent interest rate
– The City had 20 active applications
Source: City of San Francisco