NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Contract No. DE-AC36-08GO28308

Economic Impacts from the 

Boulder County, Colorado, 

ClimateSmart Loan Program: 

Using Property-Assessed Clean 

Energy (PACE) Financing

Marshall Goldberg and Jill K. Cliburn

MRG & Associates

Jason Coughlin

National Renewable Energy Laboratory

Technical Report

NREL/TP-7A20-52231

July 2011
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy 

Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

National Renewable Energy Laboratory

1617 Cole Boulevard

Golden, Colorado 80401

303-275-3000 • www.nrel.gov

Contract No. DE-AC36-08GO28308

Economic Impacts from the 

Boulder County, Colorado, 

ClimateSmart Loan Program: 

Using Property-Assessed Clean 

Energy (PACE) Financing

Marshall Goldberg and Jill K. Cliburn

MRG & Associates

Jason Coughlin

National Renewable Energy Laboratory

Prepared under Task No. SM10.1710 

Technical Report

NREL/TP-7A20-52231

July 2011
NOTICE

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Sponsor

This report was made possible through funding from the U.S. Department of Energy (DOE)

Solar America Communities program. The Solar America Communities program is designed to 

increase the use and integration of solar energy in communities across the United States. 

Through federal-local partnerships and nationwide outreach, DOE supports local governments’ 

efforts to accelerate adoption of solar energy. To learn more, please visit 

www.solaramericacommunities.energy.gov.

Acknowledgment

This publication was developed for the National Renewable Energy Laboratory by MRG & 

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ii

List of Acronyms

CSLP ClimateSmart Loan Program (Boulder County, Colo.) 

DOE U.S. Department of Energy

FHFA Federal Housing Finance Agency 

IMPLAN Impact Analysis for Planning Model 

HELOC home equity line of credit

I-O input-output (economic analysis)

PV photovoltaic (rooftop solar electric system) 

TAA Trade Adjustment Assistance Program
iii

Table of Contents

Sponsor......................................................................................................................................................... i

Acknowledgment ......................................................................................................................................... i

List of Acronyms......................................................................................................................................... ii

Table of Contents....................................................................................................................................... iii

Executive Summary.................................................................................................................................... 1

1 Introduction........................................................................................................................................... 3

1.1 PACE Financing 2007-2010..........................................................................................4

1.2 Assessing PACE Economic Benefits ............................................................................6

1.3 Program Attributes that Affected Outcomes .................................................................7

1.4 CSLP Implementation Steps........................................................................................10

2 Economic Analysis ............................................................................................................................. 13

2.1 Methodology................................................................................................................13

2.2 Analyzing the Spending from the CSLP......................................................................14

2.3 Macroeconomic Impacts..............................................................................................16

2.4 Macroeconomic Impacts Projected Through 2020......................................................20

2.5 Economic Analysis Conclusions .................................................................................23

3 Qualitative Assessment of CSLP ...................................................................................................... 25

3.1 Purpose and Approach .................................................................................................25

3.2 Categorical Discussion of Trends................................................................................27

A. Spending on Energy Improvements Inspired by CSLP, but Financed Differently.......27

B. Spending on Nonqualifying Improvements Inspired Under CSLP..............................29

C. Impacts of the Economic Climate on Participants and Outcomes................................30

D. Impacts of Program Design and Anticipated Changes.................................................31

3.3 Qualitative Assessment Conclusions...........................................................................32

4 Summary Conclusions and Observations ....................................................................................... 36

4.1 Results of Input-Output Analysis ................................................................................36

4.2 Qualitative Assessment................................................................................................37

Appendix 1 ................................................................................................................................................. 39

Boulder County ClimateSmart Loan Program in Context .......................................................39
1

Executive Summary

This report examines the economic impacts (including job creation) from the Boulder County, 

Colorado, ClimateSmart Loan Program (CSLP), an example of Property-Assessed Clean Energy 

(PACE) financing. The CSLP was the first test of PACE financing on a multi-jurisdictional level 

(involving individual cities as well as the county government). It was also the first PACE 

program to comprehensively address energy efficiency measures and renewable energy, and it 

was the first funded by a public offering of both taxable and tax-exempt bonds. The first phase of 

the residential CSLP financed about $9.8 million in residential energy retrofits, most of which 

were completed in 2009. This report focuses on 598 project invoices and $9.0 million in project 

spending.

The report provides a program overview and economic impact analysis of program spending and

energy savings using an input-output (I-O) model. The report also provides a qualitative 

assessment of factors that affected the resulting economic impacts, and profilessome program 

participants and contractors. The analysis focuses on Boulder County benefits but also includes 

an assessment of associated statewide economic benefits.

Results of the analysis indicate that:

• CSLP spending in Boulder County alone contributed to 85 short-term jobs, more than 

$5 million in earnings, and almost $14 million in economic activity in the county.

• CSLP spending supported another 41 short-term jobs throughout the state but outside

of Boulder County, $2 million in additional earnings, and almost $6 million in 

additional economic activity statewide.

• Assuming the program were extended with the same annual funding and participation, 

the 5- and 10-year trajectory of economic impacts would forecast additional benefits

and sustained job opportunities.

• Reduced energy use saved participants a combined total of about $125,000 during the 

first year on their electric and gas utility bills.

Total CSLP costs for Phase 1, including the development of a risk-management reserve fund, loan 

fees, loans, and other costs, totaled about $13 million. Short-term, in-county benefits alone 

exceed this investment. Statewide economic benefits enhance the program value.

From a qualitative perspective, there are indications that declining program implementation costs 

(including interest rates and costs related to the reserve fund, as well as marketing and 

administrative fine-tuning) would improve economic results in future CSLP funding cycles.

Program design decisions, including one that brought in a high percentage of out-of-town 

contractors, resulted in many of the economic benefitsleaking from the local economy. Yet the 

program had a variety of objectives, including not only creating local jobs but also reducing 

greenhouse gas emissions from a range of measures. Some products and skill sets needed to meet 

these objectives were not readily available in the county. Further, the CSLP aimed to prime the 

pump for green jobs development in the county and statewide. By far, the greatest number of jobs

gained (57% of in-county jobs) were related to solar photovoltaic (PV) projects. However, the 
2

first-year energy savings from PV are relatively small compared to the upfront cost of a PV

installation, which is designed for long-term (30-year), fuel-free operation.

The qualitative assessment reveals that the CSLP spurred significant energy retrofit spending 

beyond that reflected on loan applications. Many residents attended CSLP informational sessions 

to learn more about potential home improvements, but then ended up financing those 

improvementsthrough channels other than the CSLP, such as home equity lines of credit 

(HELOC), cash, or in the case of PV systems, leasing the system from a solar company. Cash 

spending and alternatively financed spending probably increased the total of all program-related 

spending by 20% or more. Most of this spending escaped documentation because it encompasses 

many possibilities, from the PV system that was purchased using home-equity lending to the 

replacement of leaky windows with those of a better quality, that did not meet loan qualification 

standards. Additionally, there were expenditures for retrofit-related paint jobs and cosmetic 

improvements, as well as major home remodels inspired by the availability of low-interest 

financing for at least part of the job. The relationship of these expenditures to the CSLP program 

was confirmed by surveys of CSLP workshop registrants and energy project contractors. CSLP 

program participants profiled in this report shed extra light on how the availability of PACE 

financing spurred the market for energy efficiency and renewables.

The Boulder County ClimateSmart program is one of only a handful of local PACE financing 

programs that reached implementation before the Federal Housing Finance Agency (FHFA) 

effectively placed a moratorium on such programs in July 2010. The CSLP proceeded with 

implementing a commercial PACE program, but it suspended the residential program, which was 

poised for Phase 2 implementation. The findings of this study show that continuing the CSLP

would have additional benefits well beyond the increased cost-effectiveness from administrative 

and marketing lessons learned. These benefitsinclude:

• Significant, long-term utility bill savings for participants.

• Job creation for Boulder County every year, including more than 90 jobs in 2020 

alone if the program were continued to that year.

• An increase in overall economic activity in the county every year for the duration of 

the program. Countywide economic output in 2020 alone would increase by 

approximately $15 million.

• Expansion of statewide economic impacts and the likelihood that a growing market

for energy efficiency and renewables could attract higher-value manufacturing and 

related job benefitsto the state.

Arguably, programs like the CSLP “prime the pump” establish a market for energy efficiency and 

renewable energy products that could be manufactured profitably in-state, creating much greater 

job impacts and economic benefits.
3

1 Introduction

The Boulder County, Colorado, ClimateSmart Loan Program (CSLP) was the first test of 

Property-Assessed Clean Energy (PACE) financing on a multi-jurisdictional level (involving 

individual cities as well as the county government). It was also the first PACE program to 

comprehensively address energy efficiency measures and renewable energy, and it was the first 

funded by a public offering of both taxable and tax-exempt bonds. Initiated in 2009, the first 

phase of the CSLP included two rounds of residential project financing and resulted in about 

$9.8 million in project loans. Associated program costs and fees and funding of a reserve account

for the bonds added $3.2 million, for a total of about $13 million in Phase 1 program spending.

This makes it the second largest PACE financing program in operation through mid-2010, second 

to Sonoma County, California ($32.8 million).

The 2008 ballot measure that funded the CSLP authorized Boulder County to issue up to

$40 million in bonds, including $14 million in tax-exempt bonds. The tax-exempt bonds were

intended for low-income-qualified projects. Subsequently, the county sponsored two bond issues 

for Phase 1 residential financing. County administrators planned a second phase of the program 

to begin by mid-2010 for additional residential and commercial financing. However, due to a

freeze on residential PACE programs nationwide that was imposed by federal mortgage agencies, 

Boulder County suspended residential CSLP financing indefinitely. As it was not directly affected 

by the freeze, the $12 million commercial program moved forward. Boulder County’s first 

commercial CSLP round closed in August 2010.

The CSLP is one of several programs under a countywide Sustainable Energy Plan, which has 

key goals in (1) reducing greenhouse gas emissions, (2) improving the environment, (3) saving 

energy, and (4) providing direct and indirect economic benefits. This study focuses on economic 

benefits,specifically those from Phase 1 of the residential CSLP. It looks at 598 energy home 

improvement loans that together comprise just over $9 million in energy efficiency and 

renewable energy spending through program loans1

Though it is specific to the Boulder County experience, this study also sheds light on how the 

PACE financing model creates economic benefits and how these benefits could be increased. It

highlights the drivers of green jobs development locally, statewide, and nationally. It also

spotlights common challenges, from the need for longer test periods that would allow 

administratorsto work out program kinks, to the need for innovative ways to promote local 

contractors when PACE communities are part of large, interdependent metro areas.

and asks questions such as: How much

money was spent in the county and in the state in order to meet home retrofit needs for materials

and labor? What was the total related energy bill savings? How did direct and indirect investment 

in energy efficiency and renewable energy measures generate jobs? What kinds of jobs and 

where? How might the respending of energy bill savings and related business income result in 

additional economic benefits and jobs of all kinds?

 1 The economic analysis for this report drew upon available participant invoice data, which was available for just 

over $9 million in CSLP lending. This analysis does not include spending on loan fees or required reserves. A small

number of customers delayed spending their approved loan dollars, and their spending was not included in this

analysis.
4

Although this study is not a process evaluation, some aspects of program implementation that 

bear on the economic impacts of the CSLP program are discussed. In this way, the study presents 

this ClimateSmart program as a useful model for future community-based, energy-related 

financing programs.

1.1 PACE Financing 2007-2010

Property-Assessed Clean Energy (PACE) financing, or the creation of energy financing districts, 

is a tool that local governments may use to give residents and business owners access to 

financing on terms that are well-suited to energy efficiency and renewable energy building 

improvements. Local governments—including cities, counties, and other entities with taxing 

authority—may issue bonds that generally have no recourse and provide financing with little or 

no money down, to be repaid through a 15- to 20-year assessment on each participant’s property 

taxes. If a property owner sells a PACE-assessed home or business, the assessment stays with the 

property, with responsibility passing to the next owner until the debt is paid.

Thus, PACE addresses three major barriers to energy efficiency and renewable energy (solar PV)

investment: 

1. Lack of capital. PACE financing programs usually require low fees and no money 

down for qualified participants. 

2. Lack of long-term commitment. Because homeowners in the United States tend to 

move every seven years or less, they like the fact that PACE assessments are 

transferable to new property owners.

2

3. Lack of quality assurance. PACE programs typically address this barrier by offering 

energy audits or workshops to educate consumers, and they typically place some 

requirements for quality assurance on participating contractors.

The idea of land-secured financing districts is not new. Such districts support a myriad of local 

improvements. As with PACE districts, some of these assess costs only upon the beneficiaries. 

For example, assessments may finance individual hook-ups to city water, to replace individual 

wells. Property-assessed financing is not legally a loan, though many PACE programs (including 

Boulder County’s) use the term “loan” because it is widely recognized shorthand for debt 

financing. 

The first PACE program in the United States was proposed by the City of Berkeley, California, 

in 2007 and pilot-tested in 2008 as a way to finance residential solar projects. The concept caught 

on quickly. By mid-year 2010, 22 states and the District of Columbia had legislation in place to

enable PACE programs. About a dozen local programs had started, from Annapolis, Maryland, to 

Milwaukee, Wisconsin, and Yucaipa, California. The U.S. Department of Energy (DOE) began 

providing technical assistance and outreach to a number of grant recipients of American 

Recovery and Reinvestment Act (ARRA) funding.

 2 While the PACE lien legally transfers to the next homeowner, it may be subject to negotiation at the time of sale.
5

However, federal housing regulators, including the Federal Housing Finance Agency (FHFA) 

and the Office of the Comptroller of the Currency, expressed safety and soundness concerns with 

the PACE concept. In July 2010, FHFA released a statement directing the federally backed 

lenders Fannie Mae, Freddie Mac, and the Federal Home Loan Banks to undertake actions to 

address safety and soundness concerns in PACE jurisdictions (i.e., adjust underwriting criteria 

for borrowers in PACE jurisdictions). The FHFA’s primary complaint was that most PACE 

programs gave the energy-related property assessments primary lien status, meaning that the tax 

assessment would be repaid before the mortgage in the case of a foreclosure. The agency also 

expressed concern about the stringency of underwriting standards and consumer protections in 

residential PACE financing programs. 

Figure 1. Basic PACE financing process. Source: NREL 2010

The result of the FHFA decision was an indefinite moratorium on nearly all residential PACE 

programs nationwide. A few residential PACE programs have continued to offer financing, as 

have certain commercial PACE programs, such as one in Boulder County. As of fall 2010, 

initiatives that prescribe secondary liens on PACE projects, such as one in Maine, were also in 

effect. The option for secondary liens has not caught on, as there is no secondary market for 

bonds tied to this type of investment. 

A federal legislative remedy stalled in Congress in fall 2010. Several PACE program sponsors 

and advocacy groups have brought lawsuits, which are currently pending against FHFA. Some

local energy program sponsors have announced plans to keep working on solutions, reviving 

PACE or working with alternative local financing strategies.3

 3 PACE Financing Sources:

B. Speer and R. Koenig, Property-Assessed Clean Energy (PACE) Financing of Renewables and Efficiency, NREL

Energy Analysis Fact Sheet Series on Financing Renewable Energy Projects, National Renewable Energy 

Laboratory, July 2010. (www.nrel.gov).

M. Zimring, I. Hoffman, and M. Fuller, Pace Status Update, Clean Energy Financing Policy Brief, Lawrence 

Berkeley National Laboratory Environmental Energy Technologies Division, August 2010. (www.eetd.lbl.gov). 

J. Farrell, New Rules Project, PACE Presentation: Overview, Update, and Future, for the Southwest Renewable 

Energy Conference, Santa Fe, New Mexico, September 2010. (www.newrules.org).
6

1.2 Assessing PACE Economic Benefits

The Boulder County ClimateSmart program made national news when voters passed the 

program’s first bond measure. The implementation of the residential program in Spring through

Fall 2009 also won national recognition for its speed to market and widespread reach,

encompassing 40 residential measures and attracting participation from 300 contractors. When 

CSLP launched, Boulder County unemployment was rising. According to county economic 

development staff, the ratio of applicants to job openingswhich for years never averaged more 

than 10 to 1surged past 20 to 1 in early 2009. Local policymakers hoped the CSLP could 

address many goals, including job creation.

This economic analysis will be limited by a number of factors. First, this is by definition a study 

of early results from a first-time effort. The market for a first-time program typically includes 

many early adopters, and their behavior differs from that of all homeowners. In addition, the 

energy bill savings used in this analysis, which were based on usage during the first year after the

improvements were made, are likely to differ from average savings over future years. This is 

because it takes some time for customers to perceive and respond (i.e., adjust habits) to changes 

such as increased comfort, lower bills, etc. Also by definition, this study is focused on the 

homeowners who followed through the entire program process and used program financing for 

specific home improvements. Yet the program spurred other improvements that ultimately used 

alternative financing or cash. Those program-inspired investments had economic impacts that 

were not specifically documented. This analysis does not quantify every economic impact, but it 

provides a framework for understanding the range of impacts and how they might occur.

Figure 2. The recirculation of dollars spent on energy efficiency

or renewable energy measures is known as the multiplier effect.

In short, jobs and growth in economic activity are related to spending and the circulation of 

money in the economy. The full impacts on jobs, earnings, and economic activity of investments 

in CSLP energy measures and the resulting energy bill savings are captured by evaluating the 

impacts for each change in spending. Note that dollars spent on energy efficiency-related home
7

improvements create much greater economic benefits and more local jobs than do dollars spent 

to pay utility bills and build power plants. Figure 2 summarizes the way these dollars circulate 

from local energy program spending and the resulting benefits. Additional background on 

economic modeling and specific inputs from the Boulder County CSLP will be discussed in 

Section 2 of this report, Economic Analysis. 

1.3 Program Attributes that Affected Outcomes

Only a handful of PACE programs completed funding rounds by mid-2010, and each of these

programs had different goals, target markets, and program implementation plans. The differences

and similarities among these programs are discussed in the appendix of this report and 

summarized in Table A1. Readers of this report should bear in mind that each local PACE 

program or related financing program yields unique economic results, as well as more 

universally applicable lessons.

Boulder County’s program, conceived in 2008, was unique in its emphasis on climate protection.

Economic development was only one of four goals:

• Reduced greenhouse gas emissions

• Reduced environmental impacts, such as air pollution and water use

• Energy savings, with accompanying bill savings in all sectors

• Economic benefits, including green jobs creation.

In Boulder, program planners wanted to encourage a broader range of measures, in part, to 

improve the average cost per unit of greenhouse gas reduction. The list of qualifying 

improvementsincluded air sealing and ventilation; insulation, space heating and cooling; water 

heating; lighting and daylighting; energy efficient windows and doors; reflective roofs; pool 

equipment; landscaping (e.g., strategically planted trees), and installation of solar PV, solar water 

heating, small wind turbines, wood/pellet stoves, and much more. Program planners particularly 

wanted to balance interest in solar PV against low-cost/high-savings measures such as air sealing.

Boulder’s emphasis on public education affected the program outcome, as residents were 

presented with several options for achieving energy savingsbesides using PACE financing. 

CSLP applicants were required to attend an introductory workshop. There, they learned about 

technologies, program procedures, and the availability of technical support. For example, Boulder 

County offered a subsidized energy audit, as well as free phone counseling to help customers 

prioritize investments.

The CSLP addressed the goal of local jobs development, primarily by creating a market for 

energy efficiency and renewable energy measures that could spur local businesses of many types. 

Program administrators worked closely with contractors who volunteered their time to help 

promote the program and support educational workshops. The program paid workshop trainers, 

but there was mutual benefit for all contractors who pitched in. Press coverage for the program 

was strong in local newspapers, including photos and interviews with Boulder-area contractors. 

One paper named the loan program team their “People of the Year” for 2009, giving front-page 
8

coverage to the program and its jobs-development goals.

4

 4 White, Pamela, “2009 Boulder County People of the Year: Team ClimateSmart,” Boulder Weekly, December 24, 

2009.

Yet in many ways, program designers 

opted for simplicity and speed to market, rather than fine-tuned jobs-developmentstrategies. For 

example, the program only required that participating contractors be licensed in the communities 

they served. About 300 contractors from across the Denver area ultimately received at least one

payment from the program, and of these, more than 40% were from outside of Boulder County

(see map on page 40). The number of out-of-county contractors was partly justified by the

breadth of qualifying measures. It also was an indication of business appetite for this type of 

program. One Boulder County contractor who was interviewed (see sidebar below) suggested that 

contractors in the energy retrofit business need to go wherever the work is—in this case, 

anywhere within the Denver metro area. Nevertheless, the open invitation to contractors resulted 

in many energy retrofit dollars leaving Boulder County.
9

The Long ViewBestway Insulation

Debbie Weingardt, who owns and manages Bestway Insulation in Lafayette (Boulder 

County), said she has seen too many workers come and go since her business opened in 1976. 

“I was excited about the [CSLP], but I’d learned long ago to be cautious about growing my 

business too fast,” Weingardt said.

She estimated as much as a quarter of her $2 million annual revenue in 2009 came from the 

CSLP, and she added employees to handle the work. Altogether, the business has 25 full-time 

employees. But Weingardt said that some of the job impact from CSLP might be hidden by 

two factors: first, her business is affected by the ebb and flow of several incentive programs in 

the region, and second, she prefers to add hours for existing employees before she commits to

hiring anyone new.

Weingardt says she makes a commitment to her employees, including paying for training from 

the Building Performance Institute and counseling good workers on how to advance their 

careers from labor to sales and management jobs. She has promoted many employees over the 

years, she said. Weingardt has also struggled to keep workers on when the fates turn. “I’ve 

been known for trying to keep employees on until it almost bankrupts me,” she said, recalling 

at least one time when she took out a loan in order to meet payroll. “It’s hard to not have 

consistency in this business,” she said. Boulder’s ClimateSmart Loan Program had the 

greatest single impact of any of these programs, she said. When the freeze on ClimateSmart 

started to take effect, Bestway let four workers go, Weingardt said. But following new leads, 

Bestway began sending trucks to Fort Collins (north of Boulder County), which has just 

launched a new energy efficiency rebate program. 

According to Weingardt, the challenges of building the energy efficiency industry and a 

green-jobs economy are hard to meet when small companies like hers must keep changing 

their business plans in order to succeed. She said that she has participated on several state and 

local committees to advise on green jobs development, where her message has been to stress 

the need for multi-year programs, to open the pipeline from solid job training to secure 

employment.

Photo by Dennis Schroeder, NREL/PIX 17963
10

The involvement of many contractors (a simple ratio of about one contractor for every two homes 

served) spread the benefits of the CSLP thin, so that most companies would not see a big change

in their volume of work. Some contractors reported that they appreciated the extra hours for their 

workers but did not feel justified in hiring new employees because of the CSLP. Other 

contractors, notably in solar businesses, reported a marked surge in business, which triggered new 

hires. These impacts are discussed in greater detail in Section 3 of this report, Qualitative 

Assessment. 

The bottom line is that, Phase 1 of the CSLP produced significant jobs-development benefits. 

Section 2 of this report details how the program created more than 85 jobs from in-county 

spending alone and at least 126 jobs statewide. Boulder County leaders embraced a secondary

goal to reach out beyond the county line and contribute to PACE start-ups statewide. County staff 

advised leaders in Eagle, Pitkin, and Gunnison counties in Colorado, as they approved their own 

PACE programs. In this light, the benefitsthat flowed out of Boulder County had far-reaching 

effects that could be widely shared.

1.4 CSLP Implementation Steps

Before analyzing its impacts, it is useful to review how Phase 1 of the Boulder County CSLP 

worked. Program guidelines allowed for:

• Fifteen- (15-) year loans

• Minimum borrowing: $3,000 per home

• Maximum borrowing: For open loans (using taxable bonds), up to 20% of the actual

value of the property, or $50,000, whichever is less. For income-qualified loans (using 

tax- exempt bonds), up to $15,000. For Phase 1 residential projects, interest rates 

ranged from 5.2% to 6.8% depending on the type of bond and the issue.

Because Boulder County intended to take its project-finance bonds to market, it had to prequalify

projects and bundle them together. This led to a multi-step process:

1. Participant attends Home Energy 101 Workshop. The workshop reviews the process, the 

40 qualified measures, and the costs and the benefits of making such improvements.

2. Participant obtains two or more bids and submits a preliminary online application.

3. County prequalifiesthe participant, who then completes a detailed application and 

submits it with a $75 fee.

4. Participant awaits the aggregated bond issue and notification that the work may proceed.

5. Once the bond is issued and the homeowner receives notice that work may proceed, the 

contractor or multiple contractors complete work on each home.

6. Contractor submits the final invoice, permit/inspection paperwork, and the participant’s 

approval, for full payment from the county.

7. Participant receives notice of additional payment due on the next property tax bill, and 

will continue payments through property taxes for 15 years or until the property (and 

responsibility for tax payments) changes hands.
11

Program participants paid a $75 application fee and other fees (approximately 4%) added to their

principle. The fees covered the cost of issuing the bond, the cost for program and administration 

staff, and other program costs. The total budget for CSLP Phase 1 was about $800,000, plus 

$2.4 million was set aside as a reserve fund to help secure the bonds. Participant fees covered all

these costs, so the program could be self-sustaining.

Program economic impacts depended most upon participants’ bottom-line spending and on 

energy savings that could be respent. However, two surveys—one of program participants and 

one of program contractors—suggest that some aspects of the process and of program costs may

have affected outcomes. For example, relatively strict program rules, such as the early application

for the exact amount to be financed, and fees, which could be proportionally high on smaller

jobs, led some applicants to seek alternative financing. It is also likely that CSLP program 

publicity and public education triggered community-wide energy efficiency improvements that 

are not reflected in this relatively short-term and narrowly focused study.
12

A Homeowner’s Perspective

Megan Kram bought her first home in Boulder three years ago, knowing that it needed some 

work. Kramer is single, keeps a busy schedule, and asserts that she has “pretty basic” 

maintenance skills. She heard about the Boulder ClimateSmart loan program from a friend, who 

emailed her an invitation to a free workshop on the program. Kram’s furnace was overdue for 

replacement, and the workshop confirmed her thoughts about the benefits of wall insulation. The 

house had “practically no insulation to start with,” she said. Kram had wanted new energyefficient windows, too, but the price tag was daunting. She made a spreadsheet with columns and 

rows listing the estimates that she’d gotten from different contractors, plus estimates of what she 

expected in tax credits or as a rebate from the utility. Her headings were meaningful to her: 

“Stuff I’m for sure going to do,” “Windows...,” “Nicer windows,” and “Monthly Cost.” 

“I decided I could pay about $50 per month, though I understood it would all come through on 

the annual property tax bill,” Kram said. She liked the idea that she would not have to pay the 

investment off entirely if she decided to sell the house in less than 15 years. “I would say I’m 

very likely to move within that time,” she said. It seemed fair to her that the future owner would 

share in the costs and continuing benefits of the improvements. She was a little disappointed by 

the ClimateSmart program-related fees, but the interest rate, at 6.75%, was attractive. She also 

liked the responsiveness of contractors who were in the program. “The job was easily done. It 

took half a day for the furnace and half a day for the insulation,” she recalled. Her decision to 

keep the equivalent monthly payments low prompted Kram to chose replacement windows that 

were not qualified as high-efficiency. She used personal financing to have them installed. “My 

old windows were so leaky that even a normal window replacement is a huge improvement. I’m 

sure there will be energy savings there, too,” she said. 

Other PACE programs around the country have also reported that PACE-related outreach may 

trigger improvements, whether or not PACE is the ultimate source for financing. In addition, 

nonqualifying improvements, made along with PACE improvements, affect the community 

economic impacts in ways that are difficult to track. Such effects are discussed in the Qualitative 

Analysis section of this report.

 

Left: Kram used a simple spreadsheet to facilitate her home improvement projects.

Right: Kram upgraded the look of her home at the same time she financed invisible energy 

improvements. Photos from MRG & Associates
13

2 Economic Analysis

The central goal of this study is to analyze employment and other economic impacts of the 

Boulder County residential ClimateSmart Loan Program (CSLP), an example of PropertyAssessed Clean Energy (PACE) financing. The economic analysis used to achieve this goal 

focuses primarily on CSLP dollars spent. The analysis utilizes an analytic tool called an inputoutput (I-O) model, which identifiesrelevant interactions among all sectors of the local and 

statewide economies. For example, the model shows how homeowner spending on attic

insulation or solar panels spurs business on the local level among vendors and contractors, as 

well as up the supply chain, among suppliers and manufacturers. To the extent that these products

are installed by local contractors or purchased from local manufacturers or retail vendors, there is

additional benefit to the local economy. The I-O model also identifies other impacts as described 

below.

Subsequently, Section 3 of this report will go beyond the quantitative analysis provided here. 

Section 3 includes an assessment of factors that could not be quantified but could affect the total 

long-term economic impacts of the CSLP or of similar PACE programs.

2.1 Methodology

To capture the full economic impacts of the Boulder County PACE program, the economic 

analysis evaluates three separate effects (i.e., direct, indirect, and induced) for each expenditure. 

The sum of these effects yields the total effect resulting from a single expenditure.

1. The direct effect refers to the onsite or immediate effect produced by expenditures. In the 

case of installing energy efficiency upgrades in a home, the direct effect is the onsite 

expenditures and jobs of the construction or trade contractors hired to carry out the work.

2. The indirect effect refers to the increase in economic activity that occurs when a 

contractor or vendor receives payment for goods or services delivered and he or she is 

able to pay others who support the business. This includes the equipment manufacturer or 

wholesaler who provides the products (solar panels, insulation, heating system, windows, 

etc.). It also includes the bank that provides financing to the contractor, the vendor’s 

accountant, and the owner of the building where the contractor maintains its local offices,

and so on.

3. The induced effect results from the spending of worker earnings associated with direct 

and indirect spending related to energy efficiency expenditures. This includes spending on 

food, clothing, housing, transportation, recreation, and other goods and services that

workers typically purchase with their paychecks.

Moreover, the installation of energy efficiency measures usually reduces electricity and/or

natural gas use in a home and enables the household to meet power, heating, cooling, and lighting 

needs at a lower total cost. This lower cost of home operation makes more money available for 

individuals and families to spend or invest in the local economy.
14

2.2 Analyzing the Spending from the CSLP

To analyze the spending on CSLP energy efficiency upgrades (including renewable energy 

technologies), actual expenditures are matched with appropriate Boulder County- and Coloradospecific industry multipliers.5

This analysis includes all changes in consumer and business spending that occur during the actual

construction or installation for program measures as well as the ongoing spending of resulting

energy bill savings. The impacts from the construction or installation are relatively short-term.

That is, the impacts are limited primarily to the period of time during which the actual upgrades

and spending occur. In this analysis, the initial construction-related impacts occur over

approximately a one-year period from June-July 2009 through June-July 2010. The spending of 

energy bill savings and resulting reduction in utility revenues happens each year for the life of the 

measures, typically 20 to 30 years.

The multipliers reflect the direct, indirect, and induced impacts 

supported by a $1 million expenditure (change in final demand) for goods or services purchased 

from a given industry sector.

Much of the short-term job creation from energy efficiency programs is derived from payments 

made to in-county contractors and businesses, versus out-of-county contractors and businesses. 

When in-county contractors or businesses receive money for goods and services, more of the 

money stays in the local economy. Local contractors usually hire more local residents to work for 

them, and they typically spend more money in the local area on goods and services (indirect 

effects). Out-of-county spending—paying contractors or purchasing goods or services from 

businesses outside the county—is commonly referred to as monetary leakage. A monetary 

leakage provides little benefit to the local area. One exception might be when local residents are

employed by the out-of-county businesses or when some of their products are locally 

manufactured.

Ongoing job creation is derived in large part from the difference between jobs within the utility 

and fuel supply sectors and jobs that are supported by the spending of energy bill savings in other 

sectors of the economy. For example, when residents pay their utility bills, most of the money 

leaves the local area to purchase fuels, maintain power plants, and support utility operations in 

general. On the other hand, when residents have savings from lower utility bills, they are able to 

spend some of those savings in the local area by purchasing goods and services and supporting a 

variety of local businesses.

This analysis is based on a detailed assessment of CSLP-related customer spending, using data

available for 598 residential energy retrofit projects. It includes not only those dollars loaned to 

Boulder County residents through property tax bond financing but also additional spending by 

program participants, as documented on the invoices. Table 2.1 shows the actual financing 

directly for measure expenditures (i.e., not related to loan fees, reserve accounts, or other costs) 

totaling just over $9 million. These expenditures account for 71% of the $12.7 million in total

spending related to these measures. To the extent that information on energy-related rebates from 

the state and utility companies was documented, it is included in the analysis. Similarly, where 

 5 In this study we have adapted industry multipliers derived from the 2008 IMPLAN model for the analysis.

See Minnesota IMPLAN Group, Hudson, WI, www.implan.com.
15

information was available on participant spending that was alternatively financed (for example, 

project add-ons paid for with cash), it was also included in the analysis.

Additional residential projects were completed under the CSLP program (for a final loan total of 

about $9.8 million), but documentation was not available in time to be included for this analysis.

Table 2.1. Climate Smart Loan Program 2009-2010 Residential Summary Data

Just over $10 million (79%) of the documented efficiency and renewable energy investments

(i.e., payments to contractors and vendors) were spent within Boulder County.

6

Typically, 85%-90% of energy efficiency and renewable energy installations are completed by 

local contractors and dealers. As discussed in Section 1, the profile of participating businesses for 

the Boulder County CSLP was much different. Only 171 (58%) of the 295 contractors studied for 

this analysis were located in Boulder County. The rest were from various locations throughout the

Denver metro area.

Similarly, the I-O model would typically assume that all in-county contractors’ employees would

live in Boulder County. However, Boulder County data reveal that at least 30% of in-county

contractors’ employees live and spend most of their earnings elsewhere, possibly because the

multi-county Denver area is so contiguous and offers many affordable housing options outside of 

Boulder County.

7

 6 A detailed breakout of spending by measure is included in the next section of this report.

There are more local than nonlocal residents employed by local contractors, and

all workers (local and nonlocal) spend money locally while working; these are mitigating 

conditions that would, on balance, increase local economic benefits associated with the program.

7 This estimate is an average, based on responses to an online survey of program contractors conducted in August 

2010. Anecdotal evidence from interviews with program contractors located in Boulder County in June and July

2010 suggests that in many instances the percentage of employees living in Boulder County is significantly higher.
16

However, quantifying such impacts is beyond the scope of this analysis. A qualitative assessment 

is offered in Section 3 of this report.

For purposes of estimating current and future energy bill savings, the analysis assumes that 

energy prices remain at 2010 levels. This is partly due to the difficulty of accurately predicting 

future energy prices, but also because it is simpler to match energy prices within an I-O model 

based upon fixed price relationships. Many analyses would typically apply a 2%-5% annual 

energy8

Some participants had higher utility bills when compared with their previous bills, but most 

participants experienced significant reductions in energy use and utility bills.

cost escalation rate. The utility bill savings noted in Table 2.1 reflect average savings by 

all participants. Due to the limited amount of information available from the utility bill analysis,

no distinction has been made (nor were adjustments made) for the types of measures installed, 

measure cost, energy saving potential, or payback periods, or for participant homes that added 

square footage (or other measures)—all conditions that could result in net increased energy use.

9

Finally, it should be noted that the full effects of the Boulder PACE program are not accounted 

for, due to the conditions and impacts discussed further in Section 3. For example, there is no 

documentation of county residents who did not receive CSLP financing but made alternatively 

financed energy improvements using information they received from the CSLP program, yet 

there is evidence that their spending was significant. As another example, the CSLP program 

staff spent time and budget on program design and first-year implementation, making notes for 

future-year improvements. Future program benefits would likely be greater than those reported

here.

An examination of 

possible reasons for this is included in Section 3 of this report, Qualitative Assessment. 

Considering historical price increases in electricity and natural gas, the utility bill savings

expressed here are conservative estimates. There is little doubt that utility prices will continue to 

rise and that resulting energy bill savings will increase over time.

2.3 Macroeconomic Impacts

The economic analysis for the Boulder County CSLP was carried out by evaluating the net 

changes in energy expenditures brought about by the investments in energy efficiency and 

renewable energy (primarily solar PV). Section 1 of this report describes the types of program 

measures that would qualify for financing and the process for obtaining financing. Actual 

participant investments and utility bill savings data were used to estimate both local and statewide

impacts. The change in spending generates a net impact for Boulder County and for the state as a

whole.

Table 2.2 summarizes the investments for each measure during the 2009-2010 period of analysis, 

as well as the local contractor share and sales tax generated.

 8 Average electric and gas utility bill savings for Xcel customers who participated in the Boulder County CSLP were

provided by Tim Hillman, senior energy engineer at Symbiotic Engineering, in December 2010. Symbiotic 

Engineering is currently analyzing participant utility bills for Boulder County from other utilities in the county. 9 According to the preliminary analysis completed by Symbiotic, 20% of natural gas customers and 25% of 

electricity customers had increased energy consumption.
17

Table 2.2 ClimateSmart Loan Program 2009-2010 Residential Summary Data by Measure

As the table indicates, spending on PV systems totaled $6.8 million. This was the single largest 

measure in terms of dollars spent, accounting for almost 54% of total investments. Windows and 

doors were second, accounting for about 18%, followed by air and water heaters at about 14%. 

Another four measure categories accounted for the remaining 15% of participant investments.

With this measure data, we were able to analyze the macroeconomic impacts. The first of the 

three impacts evaluated here is the net contribution to the employment base as measured by fulltime equivalent jobs. The second impact is the net gain in wage and salary compensation, 

measured in millions of 2010 dollars. The final category of impact is the net contribution to

output (i.e., economic activity), also measured in millions of 2010 dollars. In other words, once 

the gains and losses are sorted out for each measure, the analysis provides the net benefit of the 

measure in terms of the overall economy.

The following table summarizes the economic impacts of the investments by measure type. 

Unlike utility bill savings, which continue to provide benefits for the life of the energy efficiency 

measure, installation (or construction) impacts are considered one-time or short-term impacts. In 

other words, the installation-related impacts noted below occur when the actual work is being 

done and for a short time afterwards. Similarly, the impacts only account for spending that 

occurs in Boulder County or in the state as a whole. To the extent that equipment or products 

such as solar panels, roofing, or insulation are manufactured and/or purchased out of the county 

or state, the expenditures (or a portion of them) are treated as monetary leakages, providing no 

benefit to the region being analyzed.
18

Table 2.3. Summary of Macroeconomic Impacts for Installation by Measure 

Some aspects of this table are worth noting before focusing on the overall impacts in more detail. 

The first is that impacts from the installation phase are all positive, resulting in $13.7 million in 

economic activity in Boulder County and $19.5 million for the state as a whole in 2009-2010. At 

the same time, the total investments by program participants supported 85 jobs in Boulder 

County, just under 7 jobs per million dollars of investment in 2009-2010. For the state as a 

whole, program investments supported 126 jobs, more than 9 jobs per million dollars of 

investment. Wage and salary earnings increased by $5.1 million in Boulder County and 

$7.1 million for the state as a whole during this time. These job impacts represent a small portion 

(less than 0.1%) of the county’s total employment in 2009. Still, with the county in recession in 

2009, every job—be it a new job, one that is retained, or extra hours added to keep a worker fulltime—was a welcome addition.10

 10 According to the Bureau of Labor Statistics, employment was estimated at 152,804 in Boulder County at the end 

of 2009. Unemployment was 6.4%, which was historically high for the county. See U.S. Bureau of Labor Statistics 

News Release, U.S. Dept. of Labor, Oct. 19, 2010 and Bureau of Labor Statistics, U.S. Dept. of Labor, County 

Employment and W

The differences between county and state impacts are likely due 

to the fact that (1) not all contractors were located in Boulder County, and (2) the larger share of 

each dollar spent leaves the county but stays within the state.

ages, Fourth Quarter 2009, July 20, 2010, www.bls.gov/cew/.
19

The results in Tables 2.2 and 2.3 are not intended to be precise forecasts. The totals offer 

reasonable insights into the benefits of the energy efficiency and renewable energy investments, 

but due to the small level of spending relative to that studied in most I-O analyses, even modest 

changes in the assumptions could change the results in individual sectors.

Analysis of the annual utility bill savings alone for one year found that this level of spending 

($124,197) resulted in no net gain in jobs and a very slight gain in economic activity for both the

county and the state as a whole. This is due primarily to the relatively low level of utility bill 

savings during the first year. It should be noted that some measures, such as solar PV, are longterm investments. Their savings accumulate over the full 30-year life of the investment. 

Similarly, the calculation of average utility bill savings used for this analysis was adversely 

impacted by participants who increased the square footage of their homes, enhanced living 

spaces, or made lifestyle changes. In some instances, the measures were installed to increase 

comfort (reduce drafts, provide better lighting, etc.) or to improve aesthetics. Also, first-year 

energy use may reflect a period of homeowner experimentation. Some might have tested 

different thermostat settings, for example, to find out for themselves how to balance newfound

comfort against energy savings. A more detailed assessment of qualitative impacts is included in

Section 3 of this report.

Sustainable Careers

Jeff Cope sat at the reception desk at Bella Energy, a Louisville (Boulder County) solar integrator, 

looking a little big for his chair. Cope, who held the title of Solar Advisor for Inside Sales, 

actually handled all kinds of tasks, from answering phones and receiving FedEx packages to 

providing sales help and sketching preliminary solar designs. At the time of this interview, Cope 

said he was happy to have a job in solar, as he was in fact a displaced semiconductor industry

engineer. He took the job in early 2010. Bella Energy had been growing, largely because of 

business from the CSLP. In Fall 2009, Bella sales activity, including onsite sales visits, had about 

doubled thanks to ClimateSmart. At least half of the company’s residential projects and one-third 

of total gross revenues were coming from ClimateSmart program leads. Since the moratorium on 

residential PACE financing, Bella’s residential sales have slowed, but the company is refocusing 

on the commercial solar market, for which Boulder County still has an active CSLP. Bella hired 

Cope in anticipation of work in that market.

Cope’s career path supports the argument that solar jobs can make a difference. His former 

employer was an electronic chip manufacturer in Richmond, Virginia, which closed after foreign 

competitors applied questionable trade practices. Cope qualified for Trade Adjustment Assistance 

(TAA), including retraining, from the U.S. Department of Labor. “I wanted to move into a green 

tech industry, and solar fit the bill,” he explained. He moved to Colorado at his own expense but 

received TAA support for retraining at Solar Energy International, a 20-year-old solar training 

center in Carbondale, Colorado. Cope said he is never bored in his job, even though it would not 

seem to require a master’s degree in engineering. “I don’t expect to stay in my current role, 

though I am sure I will be in the solar industry,” he said. He credits his after-hours role as a new 

parent for giving him the drive to make this career work. “I want to get this clean energy 

transition going for the next generation,” he said.
20

2.4 Macroeconomic Impacts Projected Through 2020

The following tables provide an estimate of the net impacts from the CSLP program, assuming it

were to continue for the next 10 years through 2020 (or a similar 10-year period). This analysis

assumes similar annual participation levels and investment patterns and the same level of perparticipant utility bill savings (i.e., the same level of energy savings experienced by current

participants and no increase in utility rates) for each year noted. The analysis looks at nine

sectors.

The tables show how each of the industry sectors is affected in each of two benchmark years,

2015 and 2020. The impacts shown are not cumulative. The total impact, year on year, indicates 

that jobs created would be sustained, with some additional job growth as the program continues. 

For example, total annual jobs in Boulder County increase from a base of 85 in 2010 to 88 in

2015 and then to 93 in 2020. Although the impacts are small, relative to the larger economy, this

is only because the scale of investment for the CSLP is small, relative to the entire county 

economy.

11

 11 In 2009, the gross domestic product (GDP) for the State of Colorado was estimated to be $252.7 billion for all 

industries. See, Gross Domestic Product by State, Bureau of Economic Analysis, U.S. Dept. of Commerce, Regional 

Economic Accounts, www.bea.gov/regional/gsp/.

Sustainable Careers (Cont.)

Bella Solar looks for employees with good educations. Most of the employees have college 

degrees, and the average wage is about $40,000 per year, according to John Shaw, commercial 

sales director. With supportive policies and local programs like CSLP, Cope and his solar 

employer see strong prospects for growth in coming years.

Jeff Cope took a solar job in Boulder 

County after his computer-industry job had 

been moved offshore. 

Photo from MRG & Associates
21

Table 2.4. Macroeconomic Impacts of the Boulder CSLP by Sector in One Future Year (2015)
22

Table 2.5. Macroeconomic Impacts of the Boulder CSLP by Sector in One Future Year (2020)
23

The analysis indicates that three industries in particular benefit the most from the program in 

each of the years noted. These are the retail and wholesale trade sectors, the construction sectors 

and the service sectors. The trade and service sectors are winners largely for two reasons. First, 

they benefit from the actual investments in the energy efficiency measures made in each of the 

years. Second, they benefit from the higher level of goods and services sold as program

participants spend their energy bill savings elsewhere in the economy.

The construction sector benefits primarily because special trade contractors and others are 

involved in installing the new renewable systems and making the efficiency upgrades. The 

construction sector alone pulls in about one-third of the net job increases. Using the annual 

installation investments as a benchmark for evaluation, it might be noted that about 95% of the 

net job impacts are from the efficiency investments made in that year. The remaining impacts are 

the result of spending of utility bill savings by program participants.

As might be expected, the energy industries incur some overall losses in jobs, compensation, and 

output. But this result must be tempered somewhat as the industries themselves are undergoing 

internal restructuring. For example, as the electric and natural gas utilities engage in more energy 

efficiency services and other alternative energy investment activities, they will undoubtedly 

employ more people from the business services, engineering, and construction sectors.

Therefore, the negative employment impacts should not necessarily be seen as job losses; they 

might rather be more appropriately seen as a redistribution of jobs in the overall economy and 

future occupational tradeoffs.

Explained differently, while the electric utilities may lose traditional jobs (due to selling less 

energy), they would gain many of those jobs back if they moved aggressively into the energy 

efficiency business, thereby absorbing some of the job gains realized in other sectors, such as the

construction and service sectors. In effect, if they expand their participation in the energy 

efficiency market, their job totals can increase relative to the estimates based on a more 

conventional definition of an electric or natural utility as solely an energy supplier.

Electric and natural gas utilities are very capital-intensive (i.e., they require greater total assets for 

each dollar of revenue generated by the utility, relative to other industries). Thus, as the revenues 

of the utilities decrease under the CSLP and other efficiency programs, the amount of capital

investment will also decrease (i.e., fewer new power plants and pipelines are built), lowering the

industry’s value added and output contribution to the larger economy. As the analysis indicates, 

this impact is tempered by the investments in efficiency and spending of energy bill savings. The

full impact of these investments and the annual savings (in technologies such as PV noted earlier) 

are not realized until the investments are paid off.

2.5 Economic Analysis Conclusions

Based on the analysis presented in this section, it is clear that Boulder County and the State of 

Colorado benefited from the residential ClimateSmart Loan Program (CSLP). The PACE 

financing mechanism set the stage for job growth, increased economic activity throughout the 

economy, and positioned both to reap even larger benefits in the future. In addition to the county 

and statewide benefits, the aggressive commitment to energy efficiency provided the opportunity 

for program participants to reduce their energy bills.
24

Participant spending in Boulder County alone contributed to 85 short-term jobs, over $5 million 

in earnings, and almost $14 million in economic activity in Boulder County. Participant utility 

bill savings totaled about $125,000 for the current year. For the state as a whole, program 

spending supported another 41 short-term jobs outside of Boulder County, $2 million in 

earnings, and almost $6 million in economic activity. Viewed in the long term, analysis of an 

ongoing CSLP program with similar participation levels results in significantly greater savings. 

The economic impacts noted here and discussed in this section, above, occur in a context that is 

more fully described in Section 3, Qualitative Assessment. For overall CSLP conclusions and 

their more general implications for PACE programs, see the discussion in Section 4.
25

3 Qualitative Assessment of CSLP

3.1 Purpose and Approach

The economic analysis presented previously tracks spending and jobs development that can

clearly be traced to Boulder County ClimateSmart-financed spending. Anecdotal reports from 

this and other PACE programs suggest there are other influencesthat may be significant as well. 

For example, reports from PACE programs nationwide concur that economic activity inspired by 

a local PACE program, but ultimately using other forms of financing, may be significant.

Boulder CSLP administrators, including Ann Livingston, Boulder County Sustainability 

Coordinator, and Susie Strife, the ClimateSmart program manager, recognized many qualitative 

influences on the overall program outcome. Contractors and program participants who were 

interviewed for this report, as well as participants in two online surveys about CSLP, confirmed 

that there were influences and outcomes that a standard economic analysis would miss. It is 

beyond the scope of this study to draw detailed conclusions about such influences, but this 

section provides a qualitative assessment.

The research approach for the qualitative assessment of CSLP included:

12

• Interviews with CSLP administrators and Phase 1 program data

• Interview with Will Toor, County Commissioner and program policymaker

• Interviews with contractors and trade allies of two solar firms, two weatherization 

firms, and two green-building associations

• Interviews with five program participants

• Interview with Boulder Daily Camera news reporter and review of coverage from the

Camera, the Boulder Weekly, and other media

• Review of results from a July 2009 survey of 325 CSLP workshop registrants,

utilizing Survey Monkey online service

• Review of results from an August 2010 survey of about 120 program contractors, 

utilizing Survey Monkey online service. About 13% of those surveyed responded.

This response, given the sample size, was of limited use, but it helped to confirm

trends.

The subjects of interviews and participants in surveys represented locations throughout Boulder 

County. In addition, this assessment draws on observations from other PACE programs around 

the country, if they dramatically follow or differ from the trends observed here.

 12 Personal interviews occurred in Boulder County in July 2010.
26

Climate Smart Neighborhoods

When Boulder County and City leaders started planning a PACE financing program, Ron Flax, an 

architect at Rodwin Architecture in Boulder, started to think about how affordable financing for 

energy improvements might trigger a transformation for middle-class neighborhoods. He called 

Boulder’s 1960s subdivisions “an energy disaster.” Besides, the homes are small, so their prime 

locations on tree-lined streets close to parks, schools, shopping, and other Boulder attractions 

makes them ripe for investors who might just as soon tear them down and build mini-mansions 

instead. Flax said he knew that risk well, because he has lived in one of those old 1,100 squarefoot houses himself, with his wife and two school-aged kids. When the ClimateSmart Loan 

Program came along, he sharpened his pencil and prepared to make his place on Elm Avenue a 

model of small-home sustainability.

Flax’s plan quickly grew to include a deluxe menu of energy-saving possibilities. Recognizing his 

passion for saving energy, Flax said, “At least I hoped this demonstration would inspire others to

go beyond a typical window or furnace upgrade.” He invested in a total of $69,000 in energy 

improvements—and nearly as much again in nonqualifying remodeling. He used a home equity 

loan to finance nonenergy measures. To finance the energy measures, he took Boulder’s incomequalified low-interest financing to the maximum $15,000 allowed. He also obtained a zero-interest 

loan from a nonprofit, Partnership for Sustainability, to finance the PV system. Tax credits, 

including a $1,500 tax credit for combined energy efficiency measures and a 30% tax credit for a 

PV system and ground source heat pump helped lower the total investment cost. In addition, Flax 

gave himself permission to use $10,000 out of savings. “A personal energy education research 

grant,” he explained.

From a design perspective, Flax intended the home to look like the kind of place a family might 

aspire to live, rather than a place that is “good enough.” He opened up the living room, added a 

new study, and dressed up the front of the house with a welcoming porch. The addition added only 

a little floor space, but it changed the dynamic of the home, so Flax’s wife could have a home 

office and so that the living space felt more relaxed.

The Flax home is a demonstration project, using the ClimateSmart program as a starting point for 

developing livable, sustainable smaller homes. Photo from MRG & Associates
27

3.2 Categorical Discussion of Trends 

Taken alone, none of the research approaches above would have been adequate to draw specific 

conclusions about program influences and outcomes. However, taken together, they indicate four 

consistent and significant trends: 

• Spending on energy improvements inspired by CSLP, but financed differently

• Spending on nonqualifying improvements inspired by CSLP

• Impacts of the economic climate on participants and outcomes

• Impacts of program design and anticipated changes. 

Each of these trends is discussed below.

A. Spending on Energy Improvements Inspired by CSLP, but Financed Differently

Data from contractor receipts (discussed in the Economic Analysis section above) indicated some 

spending on improvements that were concurrent with CSLP-financed improvements but were 

financed separately. The impact analysis model accounted for that spending and its direct and 

indirect impacts.

However, some CSLP participants used multiple contractors to complete different parts of their

projects. It is difficult to quantify economic impacts from additional improvements that were not 

financed by the CSLP and were not completed by the same contractors. Some improvements 

might have been do-it-yourself jobs using materials from the local home store and pocket money. 

Others might have been major improvements financed through home equity loans and other 

means. The Boulder County PACE program gathered only clues about the magnitude and kinds of 

energy-related improvements the program inspired through its marketing but did not finance.

Climate Smart Neighborhoods (Cont.)

The home includes many energy improvements, from state-of-the-art crawlspace insulation and a 

ground-source heat pump to super-E windows. Initially, the home scored an energy efficiency 

(HERS) rating of 190; afterwards, it scored a 5. The estimated annual energy cost before 

improvements was $2,100, and the estimated annual energy cost afterward is $160.

Flax represents an example of a CSLP participant spending much more than the program loan 

application suggests. In his case, ClimateSmart financed $15,000 of a $114,000 project. Flax hired 

numerous contractors and completed some parts of the project himself.

Flax said, “After people make one investment in their homes, all kinds of good things can start to 

happen.” That includes adding more improvements, keeping up the property, and simply looking at 

one’s home in a different light. Flax hopes that a revived loan program might support widespread 

promotion of the idea that living simply in Boulder can mean living very well.
28

In July 2009, program administratorssurveyed registrants for Phase 1 CSLP workshops and 

captured 325 responses from those who eventually obtained PACE financing and those who did 

not. This was an online survey through the Survey Monkey service. Due to its informal nature,

the survey has limited usefulness today. Still, it shed some light on customer response to PACE 

compared to financing alternatives. Respondents included about 106 individuals who reported 

that in the end, they did not use CSLP financing. Of these, about one-third (36) said they decided 

not to complete energy efficiency or renewable energy projects at that time. Another two-thirds 

(70) said they did proceed, but used alternative financing. Roughly two-thirds of those paid cash, 

and one third of them used different kinds of loans.

Figure 3. Responses to a survey question addressed to those who registered for a CSLP 

workshop, but ultimately did not use program financing.

The use of cash was significant, though it is fair to guess that cash spending was not nearly as 

great per job as spending that was supported by some type of loan. (The survey did not ask those 

who declined to use CSLP for spending figures.)

A follow-up question, aimed at those who used alternative loans, asked what type of loans these 

respondents used. The overwhelming response was the home equity line of credit (HELOC).

The evidence of extra spending through cash or home equity loans on energy upgrades matches 

observations by PACE program sponsors nationwide. Besides cash used for small jobs, the 

HELOC is the most common financing mechanism for energy home improvements.13

 13 For a discussion of pros and cons of many kinds of residential energy project financing,see M. Fuller, C. Kunkel, 

and D. Kammen, “Guide to Energy Efficiency and Renewable Energy Financing Districts for Local Governments,” 

Renewable and Appropriate Energy Laboratory, September 2009.

This form 
29

of credit is extremely convenient—often as easy as writing a check. For customers who already 

had HELOC accounts, there were no additional fees, and that was appealing, as well. However, a 

HELOC by definition requires strong equity in the home, and it requires full repayment before 

the home could be sold. It is not a perfect substitute for PACE financing.

Some CSLP participants who were interviewed for this report used HELOC financing to expand 

their overall project list, hiring different contractors than those selected for CSLP-financed work. 

For two such participants, the CSLP income-qualified rates were too attractive to pass up, but the 

loan ceiling at $15,000 left them with projects to finance. Two participants reported that HELOC 

covered window replacements and repairs that were likely to save energy, though these projects

did not meet CSLP standards. In addition, solar contractors who were interviewed said some of 

their customers chose HELOC over the CSLP because CSLP-financed contracts had to be 

arranged to meet a short bond-issue deadline. The migration to HELOC financing was not 

necessarily a problem. If ClimateSmart outreach drove people to seek whatever financing that 

suited them for energy improvements, then, in effect, it expanded the market and increased 

spending for energy efficiency and renewable energy improvements.

Another electronic survey completed in August 2010 was aimed at CSLP contractors. This survey 

also was informal and had a small response (13%). Despite its limitations, it confirmed several 

important trends, including the trend to use HELOC or other alternative financing for CSLPinspired work. One question asked contractors what percentage of their revenues in 2009 was 

financed through CSLP lending and what percentage they thought was inspired by CSLP, though 

ultimately using alternative financing. Contractors indicated that about 16% of their 2009 

revenues came from jobs financed by CSLP and 15% came from jobs inspired by CSLP, but

using alternative financing. Given the small number of respondents, it would be wrong to assume 

that total spending related to CSLP was nearly double the value of program loans. However, this 

survey response, in addition to the other information discussed previously, underscores the

likelihood that CSLP triggered spending on energy-related home improvementsto a much greater

degree than the value of CSLP loans suggests.

B. Spending on Nonqualifying Improvements Inspired Under CSLP

The discussion above suggests the likelihood that CSLP triggered significantspending on

energy-related improvements beyond those financed by the program. In addition, some spending 

undoubtedly went to nonqualifying, nonenergy home improvements. This spending also had 

economic impacts, and should be considered a benefit of green jobs development programs.

Examples of spending that escape documentation on CSLP invoices include, among others, 

project-related fix-up and spruce-up measures, such as roofing repairs needed before a solar PV 

installation, repainting a house after a window replacement job, new curtains or drapes, new 

flooring, or a utility room remodel after installation of a new furnace. All interviewed participants 

said they felt proud of their homes after CSLP work was done, and this showed in small ways, 

from adding a plant on the porch to partially finishing a garage. This type of spending is difficult 

to document, but it is real.

The case of Ron Flax (see preceding sidebar), who spent $15,000 that was financed by 

ClimateSmart, plus more money on energy and nonenergy improvements to a total of more than 
30

$114,000, is a rare one. Still, it illustrates how CSLP and similar PACE financing programs can 

trigger additional nonqualifying spending.

C. Impacts of the Economic Climate on Participants and Outcomes

This first phase of the Boulder County ClimateSmart Loan Program took place during the depths 

of a national and regional recession. This affected homeowner attitudes about spending, and it 

affected contractor response to CSLP financing opportunities.

How did the economy affect participant willingness to spend money on their homes? Did the

prospect of financing home improvements through PACE (whereby the debt remains with the

house) increase or decrease interest in the CSLP program in 2009? It is beyond the scope of this 

research to answer these questions, but they are relevant questions. During 2009, average home 

prices in Boulder County fell for the first time since the late 1980s, but mid-range home value did 

not plummet. Any housing market slowdown triggers some investment in home improvements, as 

homeowners feel destined to stay in their homes longer. Conversely, recessionary times add to 

homeowner anxiety about taking on debt and increasing property tax bills.

When CSLP launched in Spring 2009, statewide unemployment (reflecting the job market where 

many Boulder residents worked) had risen to 8.5%.14

Even as bad economic news toughened the market, it made businesses that provide energy 

improvements hungrier. The fact that more than 300 contractors from throughout the Denver 

metro area participated in the CSLP indicates their eagerness to compete. Motivated contractors 

played an important role in driving energy-related investments in some 600 homes.

According to the Boulder Economic

Council, Colorado lost 100,000 jobs in 2009. County economic development staff said the ratio 

of applicants to job openings in Boulder County, which for years never averaged more than 10 to

1, surged past 20 applicants per job in early 2009. Unemployment rates in Boulder County 

remained below the national average, but they were high by local historical standards.

On the August 2010 contractor survey described previously, respondents said they increased their 

workforce by an average of almost two employees between Fall 2008 and Fall 2009. A few 

respondents cut workers during that time, but others increased their workforces by 20%-50%. 

Interviews with contractors indicated that some were reluctant to hire new employees but added 

hours for their existing employees. This was in dramatic contrast to the general job scene in the 

area in 2009.

A study from Sonoma County, California, focused on the comparison of construction 

employment in Sonoma County, where a large PACE program was underway, to that in nearby 

counties in 2009. That study showed construction jobs increasing in Sonoma County by 8.4%, 

while construction jobs in nearby counties fell off or stayed about the same.15

 14 Boulder Economic Council, Personal Communications, August 2010. See also, www.bouldereconomiccouncil.org. 15 “Growth in Construction Economic Activity in Sonoma County and the Sonoma County Energy Independence

Program,” November 2009, www.sonomacountyenergy.org.
31

Anecdotal information suggests a similar, though not as dramatic, trend for the Boulder County 

program. One difference was that a high proportion of the contractors participating in the Boulder

County CSLP were from outside of the county, and that diluted the local economic impact.

D. Impacts of Program Design and Anticipated Changes

PACE financing programs nationwide have been much discussed, but, perhaps surprisingly, few 

have been implemented. Only about a dozen local programs were underway in 2010, and about 

half of them were suspended before they actually provided financing to home improvement 

projects. Boulder County’s CSLP was one of only a handful of programs that reached full-scale 

implementation. Program administrators were incorporating their “lessons learned” from Phase 1 

implementation into a new Phase 2 round of residential lending, but those improvements were 

never tested.

Several elements of Phase 1 program design affected economic outcomes. Comments on these, 

including how they affected future Phase 2 plans, include:

1. The decision to open contractor participation to all comers, so long as they were licensed 

within their resident and operating jurisdictions, had a strong impact on the program. 

More than 40% of participating contractors were from outside of Boulder County. CSLP 

administrators did not plan to restrict contractor participation in Phase 2, either, but they 

intended to refine promotional strategies, to support local contractors.

2. CSLP administrators could not predict exact interest rates and fees of future loans 

because they depended on bond sales that would occur during program 

implementationyet the interest rates declined from the first to the second round in 

Phase 1, and were likely to decline again. Administrators said they hoped to see interest 

rates in the range of 4.5%, compared to a high of 6.8% in Phase 1 (unsubsidized). Fees 

were also expected to decline. These lower costs would improve marketing effectiveness 

and the cost-effectiveness of energy efficiency and renewable energy improvements.

3. One issue cited by many respondents to the July 2009 workshop registrant survey was 

that contractors had to “front” the cost of the work until completion. Reportedly, some 

small contractors could not carry this risk and withdrew their bids when they learned that 

they would not be paid until the job was fully completed. The program’s approach to 

aggregating projects, selling bonds, and then reimbursing contractors probably would not 

have changed in Phase 2. Most PACE programs nationwide have used a similar approach. 

However, this approach does favor larger companies that can cover front-end expenses 

for their work.

4. The August 2010 contractor survey strongly suggests that contractors would have to cut 

back on employee hours because this program, like all PACE-related programs, had been 

suspended. Eighty-eight percent (88%) of respondents said yes, they would experience 

lost revenues and lost jobs. Anecdotally, contractors who were interviewed roundly 

complained of the need to constantly adjust their marketing as well as employment plans 

in light of policy-driven program changes. Consistent implementation of the CSLP

almost certainly would result in greater efficiencies within these contractor businesses. 

For example, the need for worker training related to program rules and paperwork would 
32

be reduced. Administrative procedures could be streamlined. Marketing approaches could 

be fine-tuned instead of abandoned.

5. CSLP administrators also anticipated improving program implementation efficiencies.

They reported that their Phase 1 experience gave them many ideas for administrative and 

outreach improvements.

By improving efficienciesthrough Phase 2 CSLP evolution, administrators believed they could 

free resources for new efforts. For instance, the Boulder County Sustainability Program staff had 

designed a new program to spark interest in comprehensive energy home improvement projects, 

which could then be financed by CSLP. The program focused on creating a one-stop shop for

energy home improvement services so as to shorten the time and frustration between the energy 

audit and completed measures. It was launched with modifications in Fall 2010, minus the PACE 

financing component.

3.3 Qualitative Assessment Conclusions

The qualitative assessment of CSLP provides strong evidence that total spending on energy- and 

nonenergy-related home improvements significantly exceeds that which was documented on 

homeowner invoices and analyzed in Section 2 of this report. Such undocumented spending 

likely includes qualifying measures that were not financed with PACE and nonqualifying 

measures. The latter includes, among other things, new windows that are not Energy Star-rated, 

roof improvementsrelated to a PV installation and cosmetic improvements.

The HELOC seemed especially popular as a non-PACE financing alternative. Other non-PACE 

financing reportedly used by those who participated or considered participating in CSLP includes 

bank or credit union financing,solar company in-house financing, and credit cards. Many home

improvementsinspired by the program were just paid for in cash.

While participants reported that they were happy to use PACE financing, many seemed reluctant

to take on too much tax-assessed debt, concerned it could raise their property taxes too high.

Alternative financing options helped them to diversify risks associated with this new PACE 

concept.

The total economic impact of alternatively financed, CSLP-related improvements is unknown. 

Going roughly by the number of CSLP survey participants who reported using alternative 

financing, the spending that was documented on CSLP invoices would have to be increased by

20% or more. Contractors who provided survey information estimated an even greater amount of 

non-PACE spending. Certainly, the economic impacts discussed in Section 2 are a low-end 

estimate of total PACE-related impacts from Boulder County’s Phase 1 CSLP program.

Another conclusion involves the trajectory of the CSLP. The mortgage regulators’ challenge 

stopped PACE residential financing early on. Boulder County’s model had been field tested for 

about a year. It succeeded, but it almost certainly would have had even greater economic benefits 

after successive rounds. This is not to say that marketing might not have grown harder instead of 

easier. Phase 1 may have addressed a pent-up demand. Administrative staff and contractors who 

were interviewed reported that anticipation for Phase 2 workshops seemed less dramatic than it

did for Phase 1, with fewer people signing up in advance. At the same time, it is clear that

marketing and administrative improvements were in the works, and one of the strongest 
33

impediments to the program—high fees related to setting up a reserve fund—would have been 

reduced over time.

Climate Smart Neighborhoods

Rick Schwolsky, who lives with his wife and teen in a newer subdivision on the edge of 

Boulder, enjoyed participating in the ClimateSmart Loan Program from two angles. First, he 

had always wanted to add solar PV to his home, but he worried that his family might not stay in 

their home long enough to enjoy the payback. PACE financing meant that if he did sell, the new 

owner would pay his or her share of the system cost. Second, Schwolsky wanted to satisfy his

professional curiosity about how a PACE program works. As editor of the online EcoHome 

Magazine, Schwolsky is a professional in the green building business. He looked forward to 

sharing his experience, from the energy audit through the 4.2-kW PV system interconnection, 

with his readers.

“The reality was, ClimateSmart made it so easy. There was no down payment. We didn’t pay 

until the system was installed, and the contractor (Boulder-based Namaste Solar) handled most 

of the paperwork,” he said. The installation took a total of 10 days, including the 

interconnection, though there was a delay in scheduling the project, because the CSLP had to 

aggregate projects, so they tended to happen all at once. Schwolsky found that the $26,000 

project, minus utility incentives and tax credits, ended up adding about the same cost as it saves 

until the end of the 15-year term on the loan, after which the solar power will be practically 

free.

Schwolsky said the total loan cost covered some unexpected energy efficiency improvements, 

too. “We had some problems with door seals, air leaks—fortunately nothing big,” he said. The 

experience reminded him of the difference between theoretical discussions of energy savings 

and really achieving them. “I found that I was nervous. I waited until the second round of 

financing, figuring they’d have worked out any kinks in the program.” Now Schwolsky hopes 

to see PACE programs nationwide renewed. “It takes a long time to get the word out and to 

gain homeowners’ trust,” he said.

Rick Schwolsky said his family sometimes stops to glimpse the new solar panels

that are barely visible on their house. Photo from MRG & Associates
34

One program design decision stands out for its influence on local economic impacts. The 

relatively open invitation to contractors probably diluted the local jobs development impacts of 

this program.

One question for PACE program administratorsin Boulder County and nationwide is how 

PACE—or similar financing programs—might be used more effectively to build a clean energy

economy. Initially, some contractors and many of the materials they use are likely to come from 

outside the local area—but perhaps that is part of the process of building a green economy.

For example, solar PV module and balance-of-system manufacturing is just beginning to be 

established in the United States. One assumes that these high-value elements in the economic 

model would establish in-state or locally more frequently as the market for them appears more 

stable. Certainly the track record for established PACE programs is too short to have affected the 

upstream end of the clean energy value chain so far.

Yet it is important to return to the observation that Phase 1 of the CSLP had significant impacts, 

not only from directly financing, but also from starting a local conversation about home energy 

retrofits. Homeowners may ultimately choose PACE financing, an alternative type of loan, or 

cash to pay for their energy improvements, but the news in Boulder County was that they made

their choices and installed improvements. CSLP provided information on how to make smart 

energy efficiency or renewable energy investments, including addressing the upfront cost barrier.

PACE proved itself in Boulder County through Phase 1 of the residential ClimateSmart Loan 

Program. The economic benefitsthat came, despite recessionary pressures throughout Colorado, 

were impressive and program administratorsindicated willingness and strong capabilities to build

the program through successive phases, thereby supporting even greater economic results.

Financing for Mainstream Solar Customers

For Steve Schoo, marketing and communications director for Boulder-based solar integrator 

Independent Power Systems (IPS), the loss of Boulder County’s ClimateSmart residential loan 

program meant a return to old ways of doing business. “We’ve had a strong reputation in this 

community. We’ve had customers with name recognition, whose testimonials mean a lot,” Schoo 

said. On that basis, the 14-year-old company, which has been in Boulder for about four years, 

built a business mostly with customers that Schoo calls “serious solar supporters.”

The promise of ClimateSmart was that IPS could reach a wider audience. As the program started 

to pick up, IPS heard from more people who were not just scientists, architects, community 

leaders, and the like. A new tier of customers had started to call, Schoo said. ClimateSmart 

brought in homeowners of ordinary means who wanted to add a few solar panels along with 

other energy-based improvements. “On average, we started doing smaller jobs, but there were 

more and more of them,” Schoo said. He also noticed a welcome change in his marketing pitch.

“It was a very positive message...ClimateSmart marketing was geared to helping individual 

homeowners make improvements, which in turn make Boulder a better, more sustainable place 

to live,” Schoo said.

IPS played a lead role in promoting the ClimateSmart loans. Schoo and other IPS staffers put in 

many volunteer hours to help pass the November 2008 bond measure that funded the program.
35

They attended forums; they put up yard signs and answered phones. Then, when the first round 

of funding was announced, they donned ClimateSmart T-shirts and helped run the workshops 

that customers were required to attend. That experience was rewarding, Schoo said, because until 

that time, different kinds of contractors—whether heating system installers, insulation 

contractors or solar companies—seldom came together. ClimateSmart encouraged them to 

discuss among themselves how to define a complete home energy improvement plan, which 

would eventually benefit all energy-related contractors.

The news that federal mortgage policymakers had stopped PACE programs including Boulder’s 

ClimateSmart loans) came abruptly in June, when IPS was just gearing up to promote solar 

improvements through another round of financing. Schoo said he expected the continuing 

recession to have some effect on this next round, but that the effect could be countered by the 

marketing inertia—such as word of mouth advertising—from the earlier rounds of the program.

At the time of this interview in July 2010, Schoo was rolling out an “old” marketing theme—

promoting solar as a way to fight expected utility rate increases. Until that campaign took hold, 

he figured the company would stay busy through the summer converting “at least a dozen” 

remaining leads initiated during the CSLP into jobs using conventional financing. However, 

when asked for numbers, Schoo faced an awakening. He had not assessed his leads for a few 

weeks, so he called an assistant on the office phone. He waited for her to tally numbers, and then 

his face dropped. “Wow. It’s that bad?” he sighed. “So everyone else cancelled?” He confirmed 

that all but a few of his leads had already called to say they were reconsidering getting into solar, 

since the CSLP had been stalled.

Figure 4. A solar subdivision in Boulder includes IPS solar installations.

Photo from MRG & Associates
36

4 Summary Conclusions and Observations

The preceding sections of this report, Economic Analysis and Qualitative Assessment, each offer 

conclusions. This section summarizes the conclusions and offers observations on overall 

program impacts and lessons learned.

Many aspects of the economic analysis described in this report also offer lessons for any local 

energy home-improvement campaign that spurs significant investments in energy efficiency and 

renewables. Strong interest in PACE financing, including Boulder County’s choice of that model,

is based on its appeal to a wide and diverse audience. The workshops that were required for 

applicants to the CSLP drew a total attendance of more than 3,000 Boulder County residents. 

Interviews with participating contractors confirmed that this level of public interest in saving 

energy and installing solar energy systems was previously unheard of in Boulder. Yet once a 

homeowner makes a decision to invest and secures the necessary financing, the spending creates 

economic benefits, whether financed through PACE or through another method of financing. For 

this reason, this study offers lessons for a range of local energy-retrofit programs.

4.1 Results of Input-Output Analysis

The analysis of economic impacts in this report is based on a detailed assessment of CSLPrelated customer spending, using invoice data for 598 residential energy retrofits. The total 

CSLP-financed spending evaluated in this study added up to more than $9.0 million. Additional 

residential projects valued at $0.8 million were completed under the CSLP program, but 

documentation on these projects was not available, so they were not included in the analysis.

Additional program loan fees, substantial reserve account funding, and other costs were relatively 

high (approaching 30% of total program costs) in the first (start-up) phase of the program. Costs 

for the second round of Phase 1 financing were lower than costs for the first round, and CSLP

staff believes that these costs would continue to decline. They were not included in the economic

impact study.

Where documentation was available on participant spending that was alternatively financed (for 

example, project add-ons paid for with cash), it was included in the analysis. In addition, the

CSLP triggered additional spending that was not well documented. This spending was not 

included in the economic analysis, though a qualitative assessment of additional spending is 

discussed below.

The primary analytic tool used to evaluate the economic impacts was an I-O model, which 

identifiesrelevant interactions among all sectors of the local and statewide economies. Results of 

the analysis indicate that CSLP spending in Boulder County alone contributed to 85 short-term 

jobs, more than $5 million in earnings, and almost $14 million in economic activity in Boulder

County. These results alone more than justify the county’s investment in the program. Program

spending supported another 41 short-term jobs outside of Boulder County, $2 million in 

additional earnings, and almost $6 million in additional economic activity statewide. Viewed in

the long term, analysis of an ongoing CSLP program with similar participation levels would 

result in increased total savings and sustained job impacts.
37

In addition, participant utility bill savings totaled about $125,000 for the current year. The longterm economic benefits of some measures—especially solar PV—are hardly reflected in this

first-year energy savings, as they accumulate over the 20- or 30-year life of the measure and 

increase if (and this is not assumed in this analysis) energy costs increase year after year. 

The relative strength of economic benefitsin the statewide market is rather unusual. This 

occurred because more than 40% of contractors participating in this program were located outside

Boulder County. Further, many of the in-county contractors in this study had employees that live

and spend most of their earnings outside the county. 

This effect is explained largely by a program-design decision to welcome all contractors who 

were licensed to operate in the communities they served. This made implementation simpler, and

it also helped to achieve some noneconomic program goals. For example, it increased the 

likelihood that residents would install relatively uncommon measures for which there were 

limited numbers of in-county contractors. Administrators hoped this would help achieve greater 

greenhouse gas emissions reduction goals. They also hoped it would trigger new, competitive 

businesses, thereby gradually achieving local economic development goals, as well as spreading 

benefitsthroughout the Denver metro area and statewide. 

For the state as a whole, program investments supported 126 jobs, more than 9 jobs per million 

dollars of investment. Wage and salary earnings increased by $5.1 million in Boulder County and

$7.1 million for the state as a whole in the short term. If the CSLP were continued at the same 

level of participation and with the same profile of contractor participation for 5 or 10 years into 

the future, these benefits would clearly multiply. 

A longer-term 10-year CSLP program could create a shift in the profile of participating 

contractors to yield more local benefits, as well as a shift in the industry profile of the state to 

include more manufacturing related to energy efficiency and renewable energy retrofits. 

Currently, many of the high-value (and job-creating) products used in these retrofits,such as 

solar PV panels, are manufactured outside Boulder County—and, in fact, outside the state. 

Colorado is one of several states that has an economic and energy policy commitment to 

establishing in-state clean energy industries. Arguably, programs like the CSLP “prime the 

pump,” establishing a market for energy efficiency and renewable energy products that could be 

manufactured profitably instate, creating much greater job impacts and economic benefits.

4.2 Qualitative Assessment

The most significant theme is that CSLP spurred considerably more spending than the loanrelated project invoices suggest. As mentioned earlier, some invoices included charges for 

improvements that were not financed by CSLP. These were included in the economic analysis. 

However, those invoices missed work that was done on CSLP homes by other contractors or done

by the homeowners themselves for qualifying and nonqualifying improvements.

Additionally, some projects were inspired by effective program outreach, even though they used 

alternative financing. A survey of CSLP workshop registrants indicated that more than 20% did 

not use CSLP financing but went ahead with retrofit projects. They reported that they used cash 

and other types of financing, especially HELOC. A separate survey of CSLP contractors

suggested that even greater additional spending came from alternatively financed, CSLP-inspired 
38

projects. Based on information from both surveys and interviews, we conclude that additional

CSLP-inspired spending would likely increase total documented spending by 20% or more. This

would, in turn, increase program economic impacts.

The general finding of additional non-PACE spending was confirmed anecdotally by other PACE 

programs nationwide.16

Other useful observations are included in the qualitative assessment, many related to the aspects 

of program design that affected economic impacts. Primary among these was the guideline that 

led to a high percentage of out-of-county contractors (discussed previously). It was also clear that

the program was increasing in cost-effectiveness prior to its early suspension.

It may be a measure of success of the PACE model, as homeowners seem 

well aware of the need to choose the most appropriate financing for their needs, once PACE has 

triggered an initial, serious interest in making energy improvements.

The benefits of continuing a program of this nature and building on its success were already clear

to CSLP administrators, contractors, residents, and other supporters, when the program was 

suspended. This report findsstrong evidence to support their belief. The Boulder County

ClimateSmart program, based on the PACE financing model, yielded quantitative and qualitative 

economic benefitsthat would in all likelihood increase over time.

 16 “Jumping on the PACE Financing Train,” Panel Session at ASES National Solar Conference, May 2010, Phoenix, 

Ariz., moderated by A. Heinemann, DSIRE, NC Solar Center.
39

Appendix 1

Boulder County ClimateSmart Loan Program in Context

Of the first dozen PACE programs nationwide, six had funding rounds before federal mortgage 

regulators put all programs on hold. These were Babylon, New York; Berkeley, California;

Boulder County, Colorado; Milwaukee, Wisconsin (a small pilot); Palm Desert, California; and

Sonoma County, California. Each of these offered a different program design that was suited to

different goals and market conditions. As a result, the economic impacts of each program differ as 

well. Boulder County PACE administrators adapted some elements of other early PACE programs

to their program design; they also created innovations to address their specific goals. It is 

important to consider program differences and similarities before attempting to apply economicimpact results from one program onto others, whether existing or planned.

Table A1 below summarizes some PACE programs and their innovations.

Table A1. Comparison of Four PACE Programs Underway by Spring 2010

Berkeley, CA 

BerkeleyFirst 

ci.berkeley.ca.us/contentdis

play.aspx?id=26580

Boulder County, CO 

ClimateSmart Loan 

climatesmartloanprogram.com

Babylon, NY

Long Island Green Homes 

ligreenhomes.com

Sonoma County, CA 

Energy Independence 

sonomacountyenergy.org

Funding

Mechanism

Micro-bonds

Involving 3rd-party investor.

Public tax and tax-exempt bond 

offerings.

Bonding capacity dedicated by 

the cities of Boulder and 

Longmont, plus Boulder County; 

relatively low interest rates 

depend on bond market.

Initially Municipal Waste

Revolving Fund for reducing

CO2 ($2 million); private 

funding

thereafter;

Very low (3%) interest rates

initially.

County unallocated reserve 

funds from Treasury and 

Water Authority maximizes 

flexibility; future bonds

may be sold to institutional 

investors

7% interest rate reported.

Eligible 

Properties for 

Implemented 

Round(s)

Residential, Commercial Residential (initial), Commercial Residential Residential, commercial,

industrial

Eligible Measures Solar PV Energy efficiency and

renewables, including solar PV, 

water heating, small wind, 

efficient woodstoves

Energy efficiency

(PV if home meets Energy 

Star for new homes standard)

Energy efficiency, 

renewables, water 

conservation

Spending and 

Participants to 

Date

$1.5 million allocated but not

entirely spent

13 installations in pilot; total 38

projects through Fall 2009

$40 million authorized for 

residential and commercial About 

$13 million dedicated to Phase 1 

Residential (600+ homes)

$3.19 million authorized 

through mid-2010; $2 million 

from Solid Waste Fund (366 

homes)

Provided $32.8 million 

funding

through mid-2010 for about

1,050 projects; Commercial 

program currently active

Collection

Mechanism

Property tax bill, senior lien Property tax bill, senior lien Separate monthly 

assessment,

transfer to property tax bill if 

late

Property tax bill, senior lien

General Process Application, construction,

payment

Workshop, quotes, application, 

bond sale, construction, payment

Application, audit, 

construction,

payment

Application, audit, 

construction, payment

Unique Attributes Private funding does not affect 

local government balance 

sheet.

Basic efficiency measures 

prerequisite.

Bonds secured by lien plus

a moral obligation from local 

government. Does not affect 

local government balance sheet 

Special rates to low-income

applicants.

Had to relate energy waste to 

solid waste guidelines.

Aiming for 10% energy

savings per home

In litigation with FHMA

to support PACE; Funding

has little outside risk.