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Several Congressional Republicans may help rescue the Property Assessed Clean Energy finance tool, according to Cisco DeVries, president of Renewable Funding, an Oakland, Calif., company that administers PACE programs.

DeVries created the PACE model in 2007 when he was chief of staff to the mayor of Berkeley, Calif. It lets homeowners avoid the steep upfront costs of installing solar panels or doing energy efficiency retrofits by allowing them to repay the work over 10 or 20 years through an annual surcharge on their property tax bills.  If an owner sells, the buyer takes over the surcharge and the energy savings that come with it.

But the government-backed mortgage-finance corporations Fannie and Freddie objected because PACE assessments have a senior lien status to mortgages, meaning they must be paid off first if a borrower defaults. Their regulator, the Federal Housing Finance Agency, sent letters to lenders warning them away from PACE and forcing all but a few programs to close shop. (The Sonoma County, Calif., program, the nation’s largest, continues while warning participants about the dispute.)

PACE has widespread support from Congressional Democrats and state and local leaders, including Republicans such as San Diego Mayor Jerry Sanders and former California Gov. Arnold Schwarzenegger. But it has lacked Republican backers in Congress, where House and Senate bills to restore the program failed to advance last year. Democrats found only two Republicans willing to co-sponsor the plans: Rep. Bob Inglis of South Carolina, who had already been knocked out of his primary race, and Rep. Ileana Ros-Lehtinen of Florida.

Now that appears to be changing.

DeVries wouldn’t name names while PACE advocates court allies in Congress, but he said the support comes from both House and Senate Republicans.

“There are good signs from several key Republicans,” he said. “We have to see what happens once we get into the new session, but there are good signs from good folks that they’re going to be part of PACE legislation this year.”

Over the last several years, twenty-two states endorsed the model and encouraged municipalities to set up programs. San Francisco launched a program last spring and Los Angeles was getting ready to unveil its own. The Obama administration supported PACE with $150 million in stimulus-act funding (though it has since been timid in defending it).

A lawsuit seeking to restore the program – filed by the California Attorney General’s office, Sonoma and Placer Counties, the city of Palm Desert, and the Sierra Club — is working through federal courts, though settlement could take months or years.

That underscores the need for legislation to resolve the conflict, although no one knows how productive the new Congress will be on energy issues.

PACE isn’t the only game in town for financing home-energy improvements . And it’s not currently an option in Washington state, where the state constitution prohibits local governments from lending money to private entities.

But it is a tool that supporters want to defend. The advocacy group PACENow recently hired David Gabrielson as its executive director. He has worked in public finance at CS First Boston and JP Morgan and is a town councilman in Bedford, N.Y. [Clarification: PACENow was formed by Jeffrey Tanenbaum, an efficiency advocate and president of the private global investment firm Fir Tree Partners.]