Renovate America just collected a $90 million equity investment from many of the same VC investors that backed solar installer SolarCity. Investors in the property-assessed clean energy (PACE) financing firm include DFJ Growth, Silver Lake Kraftwerk, RockPort Capital Partners, Valor Equity Partners, DB Masdar, and 400 Capital Management. According to the Wall Street Journal, this round "valued the company at north of $500 million, according to a person familiar with the situation." The company has raised a total of more than $175 million in equity financing.

Renovate America partners with local governments and businesses to finance home efficiency, energy and water improvements. Homeowners pay the loans back through a line item on the home’s property tax bill, which lowers the risk for both lenders and owners and can potentially open up a far larger swath of the energy-efficiency market. Last month, President Obama's White House and the Federal Housing Administration established a new PACE guidance aiming to “remove existing barriers and accelerate the use of PACE financing for single-family housing.”

Renovate's funding announcement comes shortly after the San Diego-based firm completed its third securitization of AA-rated PACE bonds with $240 million available for clean energy and water efficiency projects. The first two rounds from Renovate America’s Home Energy Renovation Opportunity (HERO) program funded more than $600 million in residential projects in California. 

Renovate has been the largest originator of residential PACE financing in the U.S. with about $900 million in loans in California. The company makes money by charging homeowners an origination fee, as well as by buying up the municipal bonds issued to fund the loans and then securitizing them.

With the recent imposition of a mandatory 25 percent cut in urban water use in California, the latest round of financing is a good opportunity for water efficiency projects. PACE can cover upgrades as drip irrigation, water-capture systems, high-efficiency faucets, showerheads and toilets, artificial turf and some drought-tolerant landscaping.

“The HERO Program has swept across California because local government wants to be a part of the solution,” said Ray Wolfe, Executive Director of the San Bernardino Associated Governments.

“Renovate America is transforming the home improvement marketplace in every region it enters,” said John Fisher, co-founder of DFJ Growth, in a release. Josh Raffaelli, managing director at Silver Lake Kraftwerk, said, "With consumers financing around $159 billion in home improvements that conserve water and save energy, we see a significant opportunity to help Renovate America revolutionize how home improvements are identified, selected and financed across America.”

PACE financing for homes expanded rapidly last year, with residential loans eclipsing commercial projects in California. Another area of expansion is in the types of residential buildings that are allowed to take advantage of PACE. Ygrene Energy Fund, another PACE leader has completed 25 multifamily PACE projects, with more to come.

J.P. McNeill, the CEO of Renovate America, told GTM this morning, "PACE is concerned with renewable energy and energy efficiency, but on a much higher level, it is a way to help government meet policy objectives." McNeill spoke of "a much bigger opportunity" whereby policy objectives such as job growth, lowering utility bills, increasing renewable energy, and increasing home values "can come from PACE."

The CEO suggested that PACE is an example of the public and private sector coming together to accomplish goals arising from "shared values." McNeill said, "It can be quite powerful."