Last summer, Pennsylvania became the 36th state to adopt Commercial Property Assessed Clean Energy (C-PACE), an innovative financing option for businesses looking to adopt or upgrade energy efficiency.
By borrowing against and folding borrowed totals into a company’s larger property tax bill, C-PACE assigns long-term smart energy loans not to the business owners who initiate borrowing, but to properties themselves. When and if the commercial property transfers to new ownership, any remaining balance transfers with it.
“C-PACE is designed for larger, pricier undertakings and projects whose financial returns don’t immediately offset the initial investment,” explains Andrew Harkness, Director of Project Management at Evolution Energy Partners. “Not only does it incentivize business owners and allow them to share the risk with future owners who benefit from C-PACE funded improvements down the road; it can actually be cash flow positive – even during the life of the loan – for business owners who share the balance with tenants. Long-term savings and possible positive cash-flow after a loan has been repaid in full is, of course, the economic icing on the cake.”
By mitigating risk for business owners while providing capital needed to make significant Mother Nature-approved upgrades, C-PACE is a valuable tool for companies looking to adopt or improve renewable energy, energy efficiency, and water conservation. It is an under-recognized tool, too.
“Many people don’t know how viable and accessible C-PACE
really is,” Harkness says.
“I was recently at a conference in Ohio, where Evolution Energy Partners is an approved C-PACE contractor. I asked for a show of hands from attendees who had heard of C-PACE and only three hands went up. We hope to help change that.”
Harkness stresses, though, that C-PACE is designed and sometimes limited to businesses willing and ready to make large-scale green investments.
“Some lenders start C-PACE financing at $500,000,” he says. “While loan payback varies, it rarely exceeds twenty years.”
Several Pennsylvania counties have C-PACE programs up and running; it is expected to be available in all counties by this fall. With regional awareness growing (Delaware is in the process of passing C-PACE legislation and Maryland has allowed C-PACE financing since 2014), so, too, is the number of C-PACE approved contractors. Still, Harkness encourage all C-PACE borrowers to exercise discretion while choosing their partners and resources.
“There is still a limited number of approved contractors with much experience in this space,” he explains, adding that Evolution Energy Partners provides detailed engineering and project economics for C-PACE-funded projects, starting with audits and proposals. Evolution Energy Partners is currently an approved C-PACE contractor in Ohio, Maryland, and Pennsylvania.
Interested in learning more about C-PACE financing? Reach out to us at email@example.com.
# # #