SAN DIEGO—Elements like energy-efficient systems, well-insulatedwindows and Energy Star appliances will fetch as much as$11,000 extra from home buyers, Renovate America's nationalcommunications director and spokesperson Greg Frost tellsGlobeSt.com. The organization, the nation's largest provider ofresidential Property Assessed Clean Energy financing,recently closed its ninth securitization of PACE infrastructurebonds.

The securitization, HERO Funding 2016-4, includes $284million of class-A1 and -A2 notes rated AA by Kroll and AAby DBRS. With the ninth securitization, Renovate America hasnow issued more than $1.9 billion worth of bonds, all of which havehelped to improve residential infrastructure while creatinglocal jobs that cannot be automated or moved offshore.

The notes in the latest deal are initially secured by 9,008 PACEassessments levied on residential properties in 36 Californiacounties as part of Renovate America's HERO Program. The initialPACE assessments have an average balance of approximately$22,722.51, a weighted annual interest rate of 7.99% and aweighted-average original term of 15.48 years. The initial PACEassessments were originated between Sept. 7, 2016, and Nov. 18,2016.

Renovate America's head of investor relations NicoleMontecalvo recently noted that with the latest securitization,the company had more than doubled its investor base in 2016. Theprojects backed by the bonds are expected to lowerhomeowners' water and energy bills by more than $298 millionover the useful lifetime of the products installed. Projectscovered by this securitization also created more than 1,700 jobs.Across all nine securitizations, Renovate America projects haveimproved the residential infrastructure of more than 80,000 homesin hundreds of communities, creating more than 17,000 localjobs.

Renovate America has created the world's first platform thatsolely produces green bonds, with each of the company's ninesecuritizations having been designated as green bySustainalytics, an investment research firm specializedin environmental, social and governance research and analysis. HERObonds also adhere to the Green Bond Principles, a set of commonlyagreed standards in the capital markets on what constitutes a greenbond.

We spoke with Frost about PACE financing, the HERO program'ssuccess and where clean energy is headed in the residential space.

GlobeSt.com: What do you believe is responsible for thecontinued success of the HERO program and PACEfinancing?

Frost: Here's a statistic that helps explain whyPACE financing has become so popular in the markets we've entered.Every year one in six American homeowners has to replace a systemin their home that affects their energy consumption somehow: airconditioning, windows and doors, insulation. In the case of HVAC,most homeowners will choose the product that has the lowest upfrontcost, either because they don't know how long they'll be in thehome, they haven't put aside money for it or they don't know enoughabout the products out there. But most of the time, the productwith the lowest sticker price is actually going to cost them morethan a more expensive product because of the energy rating. Thecheaper A/C unit will cost you more than a higher-priced versionthat is cheaper to maintain, saves more electricity, etc. That'sthe dilemma, and it's a market failure. There's all this greatenergy-efficient tech out there that people don't have access tofor one reason or another. PACE opens up access to thesemore-efficient technologies, these clean-energy technologies thatpeople otherwise couldn't have afforded. This has helped advancethe uptake of PACE and HERO financing.

Also, it doesn't just extend to energy efficiency. In Californiaand Missouri, PACE financing can be used for solar panels—creatingenergy rather than using more efficiency—and can be used to financewater-efficiency products, which accounts for 10% of our business.People use it because we're in our fifth year of drought inCalifornia, and it's expensive to water your lawn. People use PACEfinancing to install drought-resistant landscaping. The homeownerrecoups 100% of their investment at the time of sale withPACE-financing home improvements, which is unlike other homeimprovements. The homeowner feels more comfortable in their house,its energy performance is improved and, for many homeowners,participating in something that's bigger than themselves byreducing greenhouse gases and carbon footprint is important tothem.

GlobeSt.com: Where is clean energy heading in theresidential space?

Frost: When it's time to purchase a home, a lot ofpeople think they know what most people are looking for: greatneighborhoods, kitchens, good schools, etc. But well-insulatedwindows and Energy Star appliances are actually among buyers'top-desired features, and they're willing to pay $11,000 more for ahome if would decrease their utility costs. Our homes in the US arefairly energy intensive, so I think there will be continued demandfor clean-energy technologies—energy efficiency or renewable energyrequirements—in the years to come; it's not going away. Theinterest we're seeing in HERO from communities in Missouri andFlorida, where we'll hopefully be launching the HERO program in thefirst half of 2017, indicates there's that level of interest inmaking homes smarter when it comes to energy consumption.

There is a lot of uncertainty now about what the newadministration will mean for environment and climate change. UnderTrump, it's easy to see the push for clean energy shifting towardthe states, but that's all the more reason for people to becomeeducated about PACE financing and HERO. PACE enjoys non-partisanand bi-partisan support. PACE can't be off-shored, and residentsare saving money on utility bills at no cost to taxpayers; it cutsacross political lines.

The biggest accomplishment for PACE in 2016 was in July when theFHA and the VA set forth guidance on residential PACE assessments.This was the first federal-housing-policy endorsement ofresidential PACE financing, and it allows PACE financing toco-exist with mortgages that existed with FHA and VA. It was a bigwatershed moment for the PACE industry because, up until thatpoint, there had been some question—particularly as it relates toFHSA—about PACE financing co-existing with mortgages. Also, the DOEjust issued best-practice guidelines for residential PACE to expandfinancing nationwide. And in the first half of year,PACENation released its consumer-protection policies for theresidential PACE market, which we now exceed. We do 100%confirm-term calls with all consumers, and we send them adisclosure form modeled on the federalknow-before-you-owe standards. The average HERO assessmentis 1/10 the size of a mortgage. HERO itself has expanded beyondCalifornia to Missouri, has surpassed $2 billion in total financingand has surpassed 17,000 jobs created, and we are able to estimatethe energy savings of these products being installed. They can takehomes off the grid for an entire year.

GlobeSt.com: What does 2017 looks like for the expansionand evolution of this program?

Frost: There's a lot of uncertainty, but PACE is aviable solution going forward. We will launch HERO in Florida,continue to sign up more cities and counties in Missouri and willannounce exciting partnerships with companies in the clean-energyspace. We will hopefully announce two big partnerships soon.

GlobeSt.com: What else should our readers know about HERO,Renovate America or PACE?

Frost: Keep an eye on our website. We will berolling out a completely revamped website with resources availableto homeowners regardless of where they are in the US that will helpthem become educated about HERO, the energy performance of theirhomes and ways they can improve that.

SAN DIEGO—Elements like energy-efficient systems, well-insulatedwindows and Energy Star appliances will fetch as much as$11,000 extra from home buyers, Renovate America's nationalcommunications director and spokesperson Greg Frost tellsGlobeSt.com. The organization, the nation's largest provider ofresidential Property Assessed Clean Energy financing,recently closed its ninth securitization of PACE infrastructurebonds.

The securitization, HERO Funding 2016-4, includes $284million of class-A1 and -A2 notes rated AA by Kroll and AAby DBRS. With the ninth securitization, Renovate America hasnow issued more than $1.9 billion worth of bonds, all of which havehelped to improve residential infrastructure while creatinglocal jobs that cannot be automated or moved offshore.

The notes in the latest deal are initially secured by 9,008 PACEassessments levied on residential properties in 36 Californiacounties as part of Renovate America's HERO Program. The initialPACE assessments have an average balance of approximately$22,722.51, a weighted annual interest rate of 7.99% and aweighted-average original term of 15.48 years. The initial PACEassessments were originated between Sept. 7, 2016, and Nov. 18,2016.

Renovate America's head of investor relations NicoleMontecalvo recently noted that with the latest securitization,the company had more than doubled its investor base in 2016. Theprojects backed by the bonds are expected to lowerhomeowners' water and energy bills by more than $298 millionover the useful lifetime of the products installed. Projectscovered by this securitization also created more than 1,700 jobs.Across all nine securitizations, Renovate America projects haveimproved the residential infrastructure of more than 80,000 homesin hundreds of communities, creating more than 17,000 localjobs.

Renovate America has created the world's first platform thatsolely produces green bonds, with each of the company's ninesecuritizations having been designated as green bySustainalytics, an investment research firm specializedin environmental, social and governance research and analysis. HERObonds also adhere to the Green Bond Principles, a set of commonlyagreed standards in the capital markets on what constitutes a greenbond.

We spoke with Frost about PACE financing, the HERO program'ssuccess and where clean energy is headed in the residential space.

GlobeSt.com: What do you believe is responsible for thecontinued success of the HERO program and PACEfinancing?

Frost: Here's a statistic that helps explain whyPACE financing has become so popular in the markets we've entered.Every year one in six American homeowners has to replace a systemin their home that affects their energy consumption somehow: airconditioning, windows and doors, insulation. In the case of HVAC,most homeowners will choose the product that has the lowest upfrontcost, either because they don't know how long they'll be in thehome, they haven't put aside money for it or they don't know enoughabout the products out there. But most of the time, the productwith the lowest sticker price is actually going to cost them morethan a more expensive product because of the energy rating. Thecheaper A/C unit will cost you more than a higher-priced versionthat is cheaper to maintain, saves more electricity, etc. That'sthe dilemma, and it's a market failure. There's all this greatenergy-efficient tech out there that people don't have access tofor one reason or another. PACE opens up access to thesemore-efficient technologies, these clean-energy technologies thatpeople otherwise couldn't have afforded. This has helped advancethe uptake of PACE and HERO financing.

Also, it doesn't just extend to energy efficiency. In Californiaand Missouri, PACE financing can be used for solar panels—creatingenergy rather than using more efficiency—and can be used to financewater-efficiency products, which accounts for 10% of our business.People use it because we're in our fifth year of drought inCalifornia, and it's expensive to water your lawn. People use PACEfinancing to install drought-resistant landscaping. The homeownerrecoups 100% of their investment at the time of sale withPACE-financing home improvements, which is unlike other homeimprovements. The homeowner feels more comfortable in their house,its energy performance is improved and, for many homeowners,participating in something that's bigger than themselves byreducing greenhouse gases and carbon footprint is important tothem.

GlobeSt.com: Where is clean energy heading in theresidential space?

Frost: When it's time to purchase a home, a lot ofpeople think they know what most people are looking for: greatneighborhoods, kitchens, good schools, etc. But well-insulatedwindows and Energy Star appliances are actually among buyers'top-desired features, and they're willing to pay $11,000 more for ahome if would decrease their utility costs. Our homes in the US arefairly energy intensive, so I think there will be continued demandfor clean-energy technologies—energy efficiency or renewable energyrequirements—in the years to come; it's not going away. Theinterest we're seeing in HERO from communities in Missouri andFlorida, where we'll hopefully be launching the HERO program in thefirst half of 2017, indicates there's that level of interest inmaking homes smarter when it comes to energy consumption.

There is a lot of uncertainty now about what the newadministration will mean for environment and climate change. UnderTrump, it's easy to see the push for clean energy shifting towardthe states, but that's all the more reason for people to becomeeducated about PACE financing and HERO. PACE enjoys non-partisanand bi-partisan support. PACE can't be off-shored, and residentsare saving money on utility bills at no cost to taxpayers; it cutsacross political lines.

The biggest accomplishment for PACE in 2016 was in July when theFHA and the VA set forth guidance on residential PACE assessments.This was the first federal-housing-policy endorsement ofresidential PACE financing, and it allows PACE financing toco-exist with mortgages that existed with FHA and VA. It was a bigwatershed moment for the PACE industry because, up until thatpoint, there had been some question—particularly as it relates toFHSA—about PACE financing co-existing with mortgages. Also, the DOEjust issued best-practice guidelines for residential PACE to expandfinancing nationwide. And in the first half of year,PACENation released its consumer-protection policies for theresidential PACE market, which we now exceed. We do 100%confirm-term calls with all consumers, and we send them adisclosure form modeled on the federalknow-before-you-owe standards. The average HERO assessmentis 1/10 the size of a mortgage. HERO itself has expanded beyondCalifornia to Missouri, has surpassed $2 billion in total financingand has surpassed 17,000 jobs created, and we are able to estimatethe energy savings of these products being installed. They can takehomes off the grid for an entire year.

GlobeSt.com: What does 2017 looks like for the expansionand evolution of this program?

Frost: There's a lot of uncertainty, but PACE is aviable solution going forward. We will launch HERO in Florida,continue to sign up more cities and counties in Missouri and willannounce exciting partnerships with companies in the clean-energyspace. We will hopefully announce two big partnerships soon.

GlobeSt.com: What else should our readers know about HERO,Renovate America or PACE?

Frost: Keep an eye on our website. We will berolling out a completely revamped website with resources availableto homeowners regardless of where they are in the US that will helpthem become educated about HERO, the energy performance of theirhomes and ways they can improve that.