Property-assessed clean energy is growing at a formidable clip, with large securitizations coming in more regular succession.

Ygrene, a leading provider of PACE financing, closed a $145 million private securitization on Tuesday and announced an AAA-rated $184 million public bond. Renew Financial, another PACE provider, closed its third securitization for $115 million earlier this month.

PACE programs allow investments in water- and energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for both lenders and owners. PACE programs can potentially open up a far larger swath of the energy-efficiency market than traditional programs have been able to tap. 

The Ygrene public bond, which is labeled as a green bond, includes PACE projects at both homes and businesses in California and Florida.

“We saw exceptional demand for this deal, with both A and B notes being oversubscribed,” Rasool Alizadeh, senior director of capital markets at Ygrene, said in a statement. “The diversity of our product offering and geographies helped attract a broad range of investors that we look forward to working with as we expand this asset class.” Ygrene expects quarterly securitizations starting next year.

Renew Financial’s securitization was also labeled a green bond and comes just a few weeks after Renew closed a $200 million revolving credit facility.

The trend to label PACE securitizations as green bonds comes as the green bond market is exploding. Climate Bond Initiative has estimated there could be upward of $100 billion in green bonds issued this year across the globe.

But with little regulation, investors are not always sure the bonds are being used for projects with a positive environmental impact. Because PACE is used for energy and efficiency improvements, it has positive environmental attributes and is an easier sell to investors who are trying to be diligent about their green bond investments. 

Residential PACE continues to be where most of the dollars are flowing, although commercial PACE is more widespread geographically. In September, Renovate America completed a $320 million securitization, also a designated green bond, for projects that are part of its HERO residential PACE program. The HERO program is still by far the largest residential PACE program in the U.S., concentrated largely in California.

Florida is the next big market for residential PACE, with both Ygrene and Renovate America focusing efforts in the Sunshine State. Renovate America, for example, recently announced it would launch in Orlando in 2017. Beyond Florida, residential PACE is also operating in Missouri.

Some states are waiting on the sidelines for even more guidance on residential PACE from the federal government before implementing programs, while California has forged ahead with its own consumer protection rules around PACE.

The U.S. Department of Energy is expected to release updated PACE guidelines soon that may encourage more states to expand access to residential PACE. More than 30 states have passed commercial PACE legislation.

Figure: U.S. PACE Program Deployment