PACE programs allow property owners to finance investments in renewable energy and energy efficiency with a loan that is repaid through their property tax bill. These loans are attractive for many borrowers because they help cover capital costs for energy investments that may otherwise be too expensive for many people. Lenders are willing to offer attractive interest rates because the loans are secured by a tax lien on the borrower’s property. Unfortunately, in many states, the enabling legislation contains specific definitions that does not always include battery systems as an eligible investment.

Some states that have passed PACE-enabling legislation have yet to establish PACE programs in any cities or counties. By creating uniform PACE guidelines and establishing a loan-loss reserve, states could empower local governments to quickly and efficiently create PACE programs, bringing millions of dollars in private investments to the state.

In New York and California, property owners can use PACE loans to finance battery systems. New York’s PACE program, called Energize NY, allows PACE loans to finance investments in demand management, energy efficiency, and renewable energy. Demand management technologies include battery storage, fuel cells, and combined heat and power. In California’s law, the cities choose which investments count as energy efficiency or renewable energy improvements. With that latitude, California’s PACE programs have financed battery systems and electric vehicle charging stations.

State policymakers could enable local governments to decide what improvements can be financed through PACE loans. By broadening these definitions and giving local governments the ability to include new technologies in their programs, states can empower property owners to invest in batteries and electric vehicle charging stations. Increasing the availability of batteries will create good-paying local jobs across the value chain.