How the HERO Program Works for Energy Conscious Homeowners in California

In our line of work, we hear from a lot of homeowners who want to make their homes more energy or water efficient, and those folks have plenty of different reasons for that. Some have researched how energy efficient windows and doors, HVAC units, or solar panels can save them money. Others are mainly concerned about the environment, or about our state’s ongoing drought—efficiency is a big issue here in Northern California right now.

Our Mediterranean climate means we enjoy summers that force us to endlessly run our air conditioners, and months and months when it's unlikely that we’ll see even a single cloud, making things like energy efficient AC units and solar panels fantastic investments. Transitioning your home to greater energy efficiency, however, can take quite a bit of money. Now, in the long run, it often pays for itself, but that doesn’t change the fact that a good deal of capital needs to be spent right up front.

Luckily, there’s financing available for energy conscious homeowners in Northern California who want to invest in energy and water efficiency. And that’s where the Home Energy Renovation Opportunity (HERO) Program comes in. Learn how HERO can help you upgrade your home’s overall efficiency through special financing for HVAC systems, solar panels, plumbing, landscaping, windows and doors, or cooling.

The Who, What, Where of the HERO Program

The HERO Program is a unique financing option that helps homeowners afford energy efficient upgrades to their home. HERO is, of course, far more complicated than just that, so let’s go through some quick facts before we get into the nuances of it all.

Who’s behind HERO:

HERO is a local government-approved PACE (Property Assessed Clean Energy) program that allows homeowners to finance energy-efficient and water-saving home upgrades. PACE is a public-private partnership that makes energy-efficient upgrades affordable to homeowners.

Where is HERO available:

HERO is currently only available in two states: California and Missouri. Sacramento, the largest city in our coverage area, was actually one of 16 cities and five counties across our state that adopted HERO earlier this year, bringing the total number of Californians who can apply for the program up to a whopping 85 percent.

What is HERO financing:

Financing through the HERO Program can cover 100 percent of energy efficiency or water saving upgrades. HERO offers up to 25-year terms, fixed rates, and folks can borrow as much as 15 percent of their home’s value.

How the HERO Program Works for You

If you live in a city that’s adopted the HERO Program, like Sacramento, Stockton, or more than a dozen others we serve, you may be eligible. HERO offers more consumers access to energy efficient options because it’s an assessment on your property. Approvals are primarily based on the equity in your home rather than your credit score.

Once a homeowner is approved, and upgrades have been made, they begin to pay back their financing amount through their property taxes, and the interest on these payments may be tax deductible*. Homeowners don’t have to make any upfront payments when working with the HERO Program—the payments are made with their annual property tax bill and homeowners repay the full amount over time.

Renovations eligible through the HERO program include:

1. HVAC and AC systems
2. Windows and doors
3. Plumbing and water heating appliances
4. Solar panels
5. Drought-resistant landscaping
6. Roofing

The HERO Application and Financing Process

Now that you’ve learned a bit about the HERO Program, chances are you’re interested in taking advantage of its unique financing options. We highly recommend HERO to all our clients considering eligible upgrades who can’t pay for the cost in full upfront. And, it’s actually pretty simple for homeowners to apply. Let’s look at how you get financing first:

1. Apply online:

This takes just minutes to do, and the approvals are also pretty fast. Use the “apply now” link on this page.

2. Choose your terms:

Once approved, you can choose your terms directly from HERO’s website, before you’re prompted to sign financing documents.

3. Make payments through your property taxes:

On your property tax bill, you’ll see a line item entitled “HERO Financing.” If you make payments through an impound escrow account, the lender will simply adjust your monthly payment so that it includes the amount due to the HERO Program.

Homeowners may also want to explore the possibility of an energy or water audit. It’s not required by the HERO Program, but we recommend it, especially if you’re looking to have improvements made on your entire property. An audit by a certified professional is a great way to determine which of HERO’s eligible products will have the biggest impact on your home. Plus, the cost is covered in the HERO Program financing.

You may also need to procure a building permit, though this varies from city to city, and your contractor should be able to help you with this. If this sounds overwhelming, don’t forget that, throughout your renovations, the HERO Program is there to offer guidance.

The Renovation Process When Working with HERO

Renovations are always a little stressful, but HERO is here to help. They offer ongoing support, before, during, and after your home upgrades and renovations.

Before renovations begin:

Help with understanding financing:

HERO is for anyone who both owns a home and does not have mortgage­-related debt exceeding 90% of the property’s value​. There are no upfront costs and the terms of the loan are primarily based on property equity (rather than credit) and can be extended anywhere from 5­ to 25 years. HERO keeps it simple and walks you through the whole process.

Finding the right contractor:

The HERO Program ​only works with experienced home improvement contractors, who agreed to follow HERO’s industry-leading consumer safeguards that help protect homeowners and contractors every step of the way.

During your home’s renovations:

Permit requirements:

The HERO Program can cut through red tape so work can get started right away. Why wait to make your HVAC system more energy ­efficient?

Qualified products on every job:

A​ny product that’s installed by HERO’s network of contractors ​is required to meet local, state, or federal efficiency or performance standards.

After renovations are complete:

Homeowner approval:

HERO only works with contractors who have agreed not to be paid until the homeowner has signed off that the project has been completed to their satisfaction.

Support from start to finish:

At every stage of the project, HERO workers are available to answer questions and guide the way. After all, we’re all in this together.

The HERO Program’s Many Efficiency Upgrades




In Northern California, our winters are somewhat brief, but boy do they feel cold. We spend most of the winter months in the 40s and 50s, just cold enough to need the furnace, but not enough to need it running all day long. Our area lends itself well to energy efficient furnaces, designed for heating houses in climates that don’t often drop below 40 degrees.

Furnaces often use natural gas, propane, or heating oil to make and circulate heat through a series of air ducts and vents. But, we often tell our NorCal clients about the advantages of going from a traditional furnace to a heat pump and propane hybrid, which uses an electric heat pump when the temperature is above 40, and a propane furnace on the rare occasions that it drops below.

And, when it comes to modern furnace technology, smart thermostats can help you increase energy efficiency a good deal by allowing you to manage the temperature in your home remotely, as well as helping to track your appliance’s energy consumption. When considering furnace upgrades, keep the following in mind:

Your existing furnace may be too big—or too small:

One of the most common issues we see is furnaces that aren’t the right size for a home. If it’s too small, a homeowner usually knows right away because the house is always cold. But, if it’s too large, it’s sometimes harder to tell there’s an issue. Oversized furnaces will cycle on and off, wasting both energy and money, and ultimately wearing down much faster than a properly-sized one. Your contractor can easily determine if you have a correctly-sized furnace for your home.

Furnace efficiency measurements are telling:

Furnace efficiency is measured by AFUE, or annual fuel utilization efficiency, which calculates the fuel needed to create heat. The higher a furnace's AFUE, the more efficient it is and the lower a utility bill will ultimately be. AFUE is a standard measurement model that contractors can apply to determine the efficiency of any combustible appliance, like furnaces, boilers, or water heaters. Typically, with furnaces, you’ll want an AFUE rating of at least 80.

Cooling and Air Conditioning

While our winters here in Northern California are mild, our summers are not. Chances are your household will run its air conditioner more than its furnace. With that in mind, it’s vital to make sure your AC unit is energy efficient.

As with furnaces, there have been some truly great upgrades to air conditioning and cooling technologies in recent years, and these developments can vastly improve the energy efficiency of your home—without sacrificing any comfort. When analyzing your AC unit, remember that:

Bigger isn’t always better:

A good contractor must look at your windows, floor space, ceiling height, insulation, local climate, cooling requirements, and other factors in order to calculate the proper size of AC unit needed for your house.

AC efficiency measurements are crucial:

AC efficiency is measured by SEER, or the Seasonal Energy Efficiency Ratio, which is sort of like miles per gallon to a car in that the higher the SEER, the more efficient the AC unit—and the lower your power bill. We look for a rating of at least 15.

Solar panels are a great way to make a home more energy efficient, particularly in Northern California, which, as you know, is much sunnier and hotter than coastal California. Solar panels can even help you save in the fall, after the weather cools.

The exact amount of savings a home can reap from solar energy really depends on the home. But, just by way of example, let’s look at peak estimates for a couple of Northern California houses with rooftop solar systems. They’ll offset the usual electric costs by between 80 and 90 percent, per the HERO Program website. For a house with 3 bedrooms, installing a 3.75kW solar system would mean lowering a $153 average electric bill to just $31. For a 5-bedroom home that’s currently paying $325, installing a 4kW solar system would bring drop their bill to $65.

Solar energy upgrades also extend past basic electricity. According to Energy Star, you can cut your water heating bill in half by installing a solar water heating system, which you can then combine with a backup gas water heater to save even more. Plus, solar water heaters last about 20 years on average, which is significantly longer than standard gas or electric water heaters.

Finally, pool heaters can be really expensive to run, but solar pool heaters are far more affordable. They’re cost competitive with both heat pump and gas pool heaters, but, in the long run, they cost far less to operate, especially in a sunny state like California. Like solar water heaters, a solar pool heater can run for nearly 20 years if the pool’s chemical balance and filter are well maintained.

Windows and Doors

Getting new windows and doors will have an impact on your entire house, breathing life into it in unexpected ways. Take a look at this long list of benefits provided by new windows and doors:

More energy efficient:

Air leakage will force your AC unit to run even more than it has to during our NorCal summers if windows aren’t properly installed and insulated. Insulation is measured by a number called the U-factor, and the lower that number is, the better the window or door is at insulating your home.

Ease of use:

Windows will open and shut with less force, and will be easier to clean and maintain.

Peace of mind:

Newer windows are often more secure than their older counterparts and have added safety features built in.

Curb appeal:

The windows are the eyes of your home, so fixing them up is a great way to boost the look of your house without having to undergo major renovations. In Northern California, for instance, we have our fair share of tract housing, and windows are a fantastic way to customize and modernize an older or unattractive home.

Peace and quiet:

Double-paned or triple-paned windows reduce the amount of noise that seeps into your home. And, one of our favorite things about living in Northern California is the peace and quiet. It’d be a shame to miss out on that because of old or ineffective windows.

Increased property value:

New windows and doors are a sure-fire investment into the value of your home.


What the HERO Program covers in terms of plumbing isn’t nearly as extensive as some of the other categories, like HVAC and solar energy, but it’s still important for homeowners to consider. HERO can provide financing for artificial turf and drought-tolerant landscaping, especially important in our area as Northern California continues to endure a drought.

The HERO Program also covers water-conserving items like irrigation systems, rainwater catchment systems, and high-efficiency faucets, toilets, and showerheads. As long-time plumbing contractors, it has been our experience that homeowners see big results just by installing efficient faucets throughout their home. In fact, some can reduce each faucet’s water use by 30 percent or more.

How to Find the Right HERO Contractor

Once you have your financing in place, and a basic idea of your desired renovations, it’s time to find the right contractor. Energy and water efficiency upgrades are complicated work, so you really want to take careful steps to find a contractor you can trust. These contractors should meet the following requirements:

Have a valid California business license

Maintain good standing with the HERO Program

Adhere to industry-leading consumer safeguards

Ask for payment only after you’ve signed off on the project

Experience and knowledge are obviously two desirable traits in any contractor, but especially in those who are going to work with you on the HERO Program. At Bell Brothers, we’re well-versed in energy-efficient technology, as well as what the HERO Program’s financing options do and don’t cover. This year alone, we’ve helped dozens of homeowners install upgrades that are being financed through the HERO Program, and we can do the same for you.

Northern California and HERO

Of the communities Bell Brothers serves, the following are eligible to participate in the HERO Program:

In addition, the HERO Program is available to any homeowner in unincorporated areas in the counties above.

Bell Brothers + the HERO Program = Energy and Cost Efficiency

One thing that may have caught your attention is that in order to take advantage of the HERO Program, you need to have a certified contractor on your team who you can trust. This is especially helpful when it comes to getting all your questions answered, and, trust me, most homeowners will have questions at some point throughout the renovation process.

For example, what happens if you take a 15-year financing option, but want to sell your home after 10 years? Homes with HERO assessments can be sold, or refinanced, at any point—HERO offers a variety of options, including transferring all or part of any remaining financing balance to the new owner. HERO’s in-house team of real estate professionals, HERO Property Advisors, is available to answer any HERO-related questions about buying, selling, or refinancing.

At Bell Brothers, we’re proud to be a part of HERO’s network of contractors, helping homeowners improve their energy­ efficiency through HVAC, AC, window, plumbing, and solar upgrades. We’ll help you conserve water and energy. C​onnect with us today​ to learn more about how you can take advantage of the program and team up with Bell Brothers and HERO.

* Disclaimer: Please contact your tax advisor to determine if you may be eligible for tax benefits.

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