Association for Public Policy Analysis & Management

In 2008, California passed legislation enabling localities to establish Property Assessed Clean Energy (PACE) financing programs. These programs issue municipal bonds to pay for the up-front costs of household energy conservation projects, such as rooftop solar panels, energy efficient windows and doors, and heating and cooling system installations. The bonds are serviced by special property tax assessments on participating homeowners and aim to reduce and displace conventional electricity consumption. Localities within six out of California’s 58 counties have issued over 2000 residential energy conservation bonds between 2009 and 2015. We use a generalized difference-in-difference design to estimate the effects of PACE bonds on the purchase of electricity by residential customers and on the amount of electricity generated by households through solar panel and fuel cell technology. Preliminary results show that while the program does increase the volume of self-generated electricity, it is not effective at reducing consumption of conventionally generated electricity.