'''''Note: The Federal Housing Financing Agency (FHFA) issued a [http://www.fhfa.gov/webfiles/15884/PACESTMT7610.pdf statement] in July 2010 concerning the senior lien status associated with most PACE programs. In response to the FHFA statement, most local PACE programs have been suspended until further clarification is provided. '''''
Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. In 2009 New Mexico enacted two separate bills -- S.B. 647 and H.B. 572 -- authorizing local governments to offer these types of programs using different mechanisms. (Not all local governments in New Mexico offer PACE financing; contact your local government to find out if it has established a PACE financing program.)
'''Renewable Energy Financing District Act'''
New Mexico enacted [http://www.nmlegis.gov/Sessions/09%20Regular/final/SB0647.pdf S.B. 647] authorizing municipalities and counties to create renewable energy financing districts (REFD) for the purpose of providing financing for consenting property owners within the district to install renewable energy technologies. The law includes photovoltaics, solar thermal, geothermal and wind as eligible technologies. A county is authorized to create a REFD in its unincorporated areas, but also in its incorporated areas as long as the county receives the consent of the impacted municipalities. Municipalities may create a REFD within their borders. Municipalities and counties must follow the same process for establishing a REFD. First, they must draft and adopt a resolution. The law requires that the resolution include specific details of the district, including the types of renewable energy technologies to be included. After passing the resolution, the county/municipality must hold a public hearing and solicit feedback from stakeholders. Finally, after considering the opinions and comments, they are required to establish the REFD by way of ordinance. Each district will be governed by a district board of five members. These members may be from the local government or individuals appointed by the local government (either way, the makeup of the board must be specified in the resolution and subsequent ordinance). Once the district is formed, individual property owners may opt in to participate per the terms of the program. Any financing they receive is to be repaid as an assessment on their property tax and will be a senior lien on the property until fully repaid. The law also establishes that the district may issue bonds to fund financing programs and the standards for the district board’s roles and powers.
'''Solar Energy Improvement Special Assessment Act'''
New Mexico also enacted [http://www.nmlegis.gov/Sessions/09%20Regular/final/HB0572.pdf H.B. 572]. Under this law, the county is authorized to pass an ordinance that creates a “solar energy improvement special assessment” provision. The county itself is not authorized to provide funding directly to property owners; however it is directed to create rules for certifying certain private banks and financing institutions as “solar energy improvement financing institutions.” The certified institutions will be authorized to loan property owners up to 40% of the assessed value of the property for purposes of solar energy (photovoltaic or solar thermal) improvements. The property owner will enter into a direct agreement with a certified financial institution for the funding and they will be required to apply to the county as well, since the loan through the private institution will be paid via an assessment on their property tax and will constitute a lien on the property. The county will devise the process for transferring funds collected via the special assessment to the participating financial institution. The law specifies that no county ordinance passed may contain additional provisions than those outlined in the law, for example, an ordinance may not require property owners to receive an energy audit as a condition of participation.