Is there a loan crisis brewing in energy efficiency? According to the Consumer Financial Protection Bureau (CFPB), one may already be here in the form of the Property Assessed Clean Energy (PACE) program. Local governments set up PACE loans to encourage homeowners to invest in improvements to their homes’ energy efficiency, including the installation of solar panels. However, PACE loans avoid many of the protections of traditional home improvement loans, something that is raising red flags in Congress.
“PACE home improvements for many homeowners, especially low and moderate-income families, are far from affordable, and homeowners lack proper disclosures that reflect the true cost of the improvements,” wrote Sens. Tom Cotton (R., Ark.) and Catherine Cortez Masto (D., Nev.) in a letter to CFPB Director Kathy Kraninger last week.