What is C-PACE financing?
Commercial Property Assessed Clean Energy (C-PACE) allows commercial and industrial property owners to finance up to 100% of the costs of eligible projects. The financing is provided by private lenders and secured by an assessment against the property. C-PACE has an extended amortization period which makes it possible for annual energy savings to exceed annual C-PACE payments, meaning projects can be cash flow positive from day one.
What are the benefits of C-PACE financing?
- C-PACE increases property value and market competitiveness
- There is a potential for immediate positive net cash flow
- C-PACE requires no upfront investment
- C-PACE is a form of longterm financing
- C-PACE is non-recourse financing
- Payments can be passed through to tenants
- The building can be sold prior to payoff
- The asset is transferable upon sale
- Underwriting is focused on the underlying building
- C-PACE is accessible to those with non-investment grade credit
- C-PACE is a way to pitch deeper energy retrofits that, due to cost, would otherwise not be implemented
- C-PACE facilitates incorporating green building design features that might be value-engineered out of a project
How does C-PACE financing work?
C-PACE is financing repaid as an annual assessment, pursuant to an assessment contract between the local government, the C-PACE capital provider, and the property owner of the benefitted property. The legal status of the financing as a tx assessment secures the financing provided by a private capital provider, which enables such capital providers to provide low-cost, fixed rate, long term funding.
Capital providers bill the annual C-PACE assessment payments directly and collect those payments. Counties do not bill and collect C-PACE assessment payments on behalf of the capital provider.
Is my property eligible for C-PACE?
C-PACE is available for commercial properties, inclusive of industrial property, agricultural property, office buildings, multifamily property (with a minimum of five dwelling units), and non-governmental, tax-exempt properties such as those owned by nonprofit agencies, private schools, religious institutions, and hospitals.
Government-owned properties, single-family residential properties, and properties located in residential zones are not eligible for C-PACE in Oklahoma.
What types of improvements does C-PACE cover?
C-PACE financing can be used to retrofit an existing building or as a component of the capital stack in a new construction development. Funds must be used for eligible expenses, which may fall into one of four main categories:
- High-efficiency lighting
- Heating ventilation air conditioning (HVAC) upgrades
- New automated building and HVAC controls
- Variable speed drives (VSDs) on motors, fans and pumps
- High-efficiency chillers, boilers and furnaces
- High-efficiency water heating systems
- Combustion and burner upgrades
- Heat recovery and steam traps
- Building enclosure/envelope improvements
- Building automation (energy management) systems
- Other permanently affixed appliances or improvements that reduce a property’s energy consumption or that enable the property to operate more energy efficiently
- Solar photovoltaic array
- Solar thermal capture system
- Wind Power systems
- Geothermal energy systems
- Fuel Cell technologies and combined heat and power applications
- Systems to capture and/or utilize methane such as wastewater treatment facilities, landfills, food waste, and similar processes
- Biomass energy recovery systems and facilities or agricultural/anaerobic digesters Non-combustion-based equipment that converts biomass to energy
- Other permanently affixed appliances or improvements, including a product, device, or interacting group of products that uses energy technology to generate electricity, provide thermal energy, or regulate temperature
- Cooling towers, condensers, and steam boilers
- Technology that reduces/recycles industrial water consumption
- Drought/heat tolerant or otherwise irrigation free landscaping, such as a Xeriscape
- Pumping equipment
- Low flow toilets and shower heads
- Other permanently affixed appliances or improvements that reduce a property’s water consumption or that enable the property to manage water more efficiently
- Tornado shelters and safe rooms, burying power lines, reinforcing doors, windows, and walls with large missile impact rated systems, and the installation of lightning protection systems
- Tornado community safe rooms (i.e. buildings or portions thereof that have been designed and constructed to the criteria set forth in FEMA P-361 Guidance for Community and Residential Safe Rooms
- Storm/wind hardening measures qualifying under IBHS’s IBHS’ FORTIFIED Commercial™ Wind Standards, a set of building requirements to make new and existing commercial buildings stronger against severe weather, including high winds, derechos, thunderstorms, EF01 and EF1 tornados, and hail
- Energy storage such as batteries, vehicle to grid projects, and other commercially available innovative projects
- Flood resistance measures such as installing, re-routing, or increasing the capacity of a storm drainage system, installing generators, pumps and backflow devices, securing above ground tanks, waterproofing exterior walls and windows, adding measures to equilibrate hydraulic loading on walls, and elevating structures, utilities, mechanical devices and appliances
- Stormwater management using low-impact development (LID) methods to reduce the volume of runoff or improve water quality such as permeable pavement, green roofs, rain gardens, cisterns, or bioswales
- Modifications to allow for use of buildings during public health emergencies or pandemics
- Earthquake and seismic hardening such as updating to the International Building Code (IBC), bracing and securing cabinets, generators, elevators and vital equipment, installing emergency shutoff valves on gas and water lines, installing window film and shatterproof glass, and anchoring roof mounted equipment (i.e., HVAC, antennas, etc.)
- Other appliances or improvements that are permanently affixed to the property and that improve building resiliency
What is the application process for C-PACE financing?
If you are interested in applying for C-PACE financing, please contact us.