This is a month for high fives, as it marks two milestones. The first is that it’s been exactly five years since we received our first homeowner application for HERO financing. The second is that the energy-efficient and renewable energy home improvements financed through HERO are now reducing greenhouse gas emissions by an amount equivalent to taking 500,000 American homes off the grid for a full year.
It all began with AB811, the California legislation that allows Property Assessed Clean Energy (PACE) financing for renewable energy and efficiency improvements to homes and businesses. The law, passed in 2008, enabled property owners to improve their properties and repay the cost of the improvement over time through a new line item on their property tax bill. It also allowed a buyer to assume the remaining PACE balance at time of sale. PACE became a way to tear down barriers to the adoption of renewable energy and efficiency improvements, by making these types of improvements more accessible for more people.
AB811 became law as California, and much of the nation, was suffering an unprecedented housing crisis amid the worst economic downturn since the Great Depression. Through this legislation, we saw the opportunity to improve the housing stock, put people back to work, help homeowners lower the operating costs of their homes, and put into place a mechanism that would allow for a lasting environmental impact.
We developed a business plan and went methodically from community to community to identify local governments interested in partnering with us. We scoured state, federal and local resources to determine criteria for verifying eligible products. We mapped an intricate project pipeline through which applications would get approved, contractors would get funded after successful project completion, the assessment would get recorded to the tax roll and collected by the county assessor’s office. We built a technology platform, hired a trusted team, recruited contractors to participate, and developed a brand with the intent of making something abstract and intricate meaningful to the average homeowner.
We did all this, and then, we waited.
That day in December, 2011, when the HERO Program went live to homeowners, is still a clear memory for me. The room was quiet, save for some anxious chatter. Our system was set up to receive applications and it was all-hands on deck. The moment we received our first application, shouts rung out throughout the office, and the process of learning how to help homeowners realize their renovation dreams had begun.
The HERO Program has since moved beyond the borders of western Riverside County and is now available to most California households. This past year, Renovate America expanded beyond our home state, launching in communities throughout Missouri and signing with several Florida communities. We have grown and improved. We have expanded our team and made improvements that have helped define the industry standard. We’ve traded paper applications for electronic signatures, developed real-time impact monitoring tools, completed nine securitizations of certified green bonds to bring private investment to public policy priorities, and found ways to scale our business to expand its impact.
Of all the metrics I monitor in our business, the ones that demonstrate how we help homeowners matter most. The potential for PACE as a national solution is great. So, put another way, we’ve now helped homeowners finance improvements that are equal to offsetting the emissions associated with all the homes in the cities of Boston and Atlanta combined, for a full year. That’s 500,000 reasons for Renovate America to redouble our efforts in the new year.
JP McNeill is the co-founder and CEO of Renovate America.