["\n\nObjective\nWe examine whether Property Assessed Clean Energy (PACE) programs, an innovative financing mechanism using municipal bonds to finance the up‐front cost of household energy conservation projects, reduced conventional energy purchases by residential customers and increased energy generated through residential solar panel and fuel cell installations.\n\n\nMethods\nUsing data on municipal bond issuances, electricity and natural gas purchases, and self‐generated energy, we use a difference‐in‐differences design to estimate the effect of PACE bonds issued in California between 2009 and 2017 on purchases and self‐generation.\n\n\nResults\nWe find more residential energy self‐generation in counties with PACE programs. Results are inconclusive for conventional energy purchases, suggesting a possible rebound effect.\n\n\nConclusion\nWhile innovative financing mechanisms facilitate access to otherwise prohibitively expensive technologies, governments must consider that behavioral responses may result in lower efficacy than desired and should consider pairing financing tools with instruments that concurrently promote reduced energy consumption.\n\n", "Social Science Quarterly, Volume 101, Issue 7, Page 2555-2573, December 2020. "]