Renovate America has created the world's first platform that solely produces green bonds, with each of the company's nine securitizations having been designated as green by Sustainalytics, an investment research firm specialized in environmental, social and governance research and analysis. HERO bonds also adhere to the Green Bond Principles, a set of commonly agreed standards in the capital markets on what constitutes a green bond.

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

GlobeSt.com: What do you believe is responsible for the continued success of the HERO program and PACE financing?

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

Also, it doesn't just extend to energy efficiency. In California and Missouri, PACE financing can be used for solar panels—creating energy rather than using more efficiency—and can be used to finance water-efficiency products, which accounts for 10% of our business. People use it because we're in our fifth year of drought in California, and it's expensive to water your lawn. People use PACE financing to install drought-resistant landscaping. The homeowner recoups 100% of their investment at the time of sale with PACE-financing home improvements, which is unlike other home improvements. 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 by reducing greenhouse gases and carbon footprint is important to them.

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

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

There is a lot of uncertainty now about what the new administration will mean for environment and climate change. Under Trump, it's easy to see the push for clean energy shifting toward the states, but that's all the more reason for people to become educated about PACE financing and HERO. PACE enjoys non-partisan and bi-partisan support. PACE can't be off-shored, and residents are saving money on utility bills at no cost to taxpayers; it cuts across political lines.

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

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

Frost: There's a lot of uncertainty, but PACE is a viable solution going forward. We will launch HERO in Florida, continue to sign up more cities and counties in Missouri and will announce exciting partnerships with companies in the clean-energy space. 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 be rolling out a completely revamped website with resources available to homeowners regardless of where they are in the US that will help them become educated about HERO, the energy performance of their homes and ways they can improve that.

SAN DIEGO—Elements like energy-efficient systems, well-insulated windows and Energy Star appliances will fetch as much as $11,000 extra from home buyers, Renovate America's national communications director and spokesperson Greg Frost tells GlobeSt.com. The organization, the nation's largest provider of residential Property Assessed Clean Energy financing, recently closed its ninth securitization of PACE infrastructure bonds.

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

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

Renovate America's head of investor relations Nicole Montecalvo recently noted that with the latest securitization, the company had more than doubled its investor base in 2016. The projects backed by the bonds are expected to lower homeowners' water and energy bills by more than $298 million over the useful lifetime of the products installed. Projects covered by this securitization also created more than 1,700 jobs. Across all nine securitizations, Renovate America projects have improved the residential infrastructure of more than 80,000 homes in hundreds of communities, creating more than 17,000 local jobs.

Renovate America has created the world's first platform that solely produces green bonds, with each of the company's nine securitizations having been designated as green by Sustainalytics, an investment research firm specialized in environmental, social and governance research and analysis. HERO bonds also adhere to the Green Bond Principles, a set of commonly agreed standards in the capital markets on what constitutes a green bond.

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

GlobeSt.com: What do you believe is responsible for the continued success of the HERO program and PACE financing?

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

Also, it doesn't just extend to energy efficiency. In California and Missouri, PACE financing can be used for solar panels—creating energy rather than using more efficiency—and can be used to finance water-efficiency products, which accounts for 10% of our business. People use it because we're in our fifth year of drought in California, and it's expensive to water your lawn. People use PACE financing to install drought-resistant landscaping. The homeowner recoups 100% of their investment at the time of sale with PACE-financing home improvements, which is unlike other home improvements. 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 by reducing greenhouse gases and carbon footprint is important to them.

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

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

There is a lot of uncertainty now about what the new administration will mean for environment and climate change. Under Trump, it's easy to see the push for clean energy shifting toward the states, but that's all the more reason for people to become educated about PACE financing and HERO. PACE enjoys non-partisan and bi-partisan support. PACE can't be off-shored, and residents are saving money on utility bills at no cost to taxpayers; it cuts across political lines.

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

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

Frost: There's a lot of uncertainty, but PACE is a viable solution going forward. We will launch HERO in Florida, continue to sign up more cities and counties in Missouri and will announce exciting partnerships with companies in the clean-energy space. 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 be rolling out a completely revamped website with resources available to homeowners regardless of where they are in the US that will help them become educated about HERO, the energy performance of their homes and ways they can improve that.