Energy breaks come to Turlock

mrowland@modbee.comAugust 27, 2013 

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— City businesses and residents soon will have a new way to finance energy-saving property improvements.

The City Council voted unanimously at a recent meeting to allow Property Assessed Clean Energy financing programs in the city. PACE programs provide low-interest financing for energy-saving upgrades, including solar installations, water conservation and other measures.

Turlock is the first Stanislaus County city to approve such a program, which allows property owners to take out a loan on the assessed value of their business or home based on property taxes. Unlike other loans used to pay for energy updates, PACE program loans stay with the business or home instead of the owner and are passed along if the property is sold.

The City Council has approved three private financing companies to offer PACE loans in Turlock: FigTREE, California HERO and CaliforniaFIRST. All are approved for both residential and commercial financing.

"This is something that can be nothing but a benefit in my opinion," said Assistant City Manager Ron Reid. "All the city is doing is opening this up so (people and firms) can work together."

While Turlock will have no oversight or financial liability for the program, the City Council had to vote to approve the financing companies because of mandates in the state legislation that created PACE in 2008.

As the first city in the county to offer the PACE financing, Turlock has chosen to only approve third-party private firms to approve and administer the loans. None of the companies will perform the contracting work. Instead, they certify independent contractors to provide the services for upgrades such as dual-pane windows, solar panels, improved insulation and energy-efficient water heaters.

The city of Modesto is considering its own PACE program. Mayor Garrad Marsh had hoped to have a program up and running this fall, but it is on hold as federal courts debate the residential side of PACE lending. Fannie Mae and Freddie Mac had initially refused to back mortgages with PACE liens on them, but now a compromise on the issue seems near, Reid said.

Marsh said Modesto's PACE program would take a different approach from Turlock's all-private financing. He hopes to create city-issued PACE financing for commercial properties and a public-private partnership for residential financing.

Turlock City Manager Roy Wasden said the city never considered creating government-backed loans for its PACE program. Residents and business owners would apply directly to the private financing firms for the funding. Contractors would also need to apply with the individual companies to be certified to do the work.

Mark Aarvig with HERO financing said financing terms could go up to 25 years and for commercial properties provide up to $4 million.

"Historically, other (energy-saving funding) options are primarily leases," Aarvig said. "The beautiful thing about PACE financing is the transferability of the financing with the property. It's not on the property owner. You can term out the financing for as long as that property is usable. We've had a lot of success elsewhere and are really excited to bring this to Turlock."

All three firms must receive judicial validation before they can offer loans in Turlock. Reid said California HERO hopes to be up and running by Dec. 1 and FigTREE in just over a month. CaliforniaFIRST is holding off on launching the program in Turlock but is approved by the City Council to begin.

For more, visit Figtree at, California HERO at and CaliforniaFIRST at

Bee staff writer Marijke Rowland can be reached at or (209) 578-2284. Follow her on Twitter @turlocknow.

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