Renewable Funding, a company that makes it easier for homeowners to finance solar or other renewable funding projects with friendly terms, has raised $12.2 million in a first round of funding.
The Oakland, Calif., based company’s model is noteworthy because it lets you attach your financing to your property tax bill.
So if you sell your house after investing in an expensive solar paneled roof, the financing stays on your home’s property tax bill, even if you sell the house.
The instrument is a bond called Property Assessed Clean Energy (PACE). The company pioneered its offering in Berkeley, Calif., which issued $1 million in bonds in a publicized pilot project and saw people snap up the credit within an hour, according to Josh Becker, a partner at New Cycle Ventures, one of the investors in the round.
Other competitors are coming up with more simple financing schemes than the traditional home equity loan, which is unsecured and remains your responsibility after you sell the home. Sunrun, another company, for example, is offering a simple flat rate and lower overall financing via group-negotiated rates.
Some 18 states have passed laws allowing the financing procedure, to encourage investments in renewable energy. Vice President Joe Biden has endorsed PACE as key to the nation’s effort at reducing greenhouse gas emissions. Becker said that while some cities are going to want to create their own PACE instruments, many others are going to want to outsource the procedure, and Renewable Funding hopes to grab a lot of that business. The company recently won a Request for Proposal from the City of San Francisco for such a service, he said.
Other investors include Draper Fisher Jurvetson and NGEN Partners.
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