How C-PACE Financing Works: Step-by-Step Guide

How C-PACE Financing Works: Step-by-Step Guide

Commercial Property Assessed Clean Energy (C-PACE) financing is an innovative tool that allows commercial property owners to finance energy efficiency, renewable energy, and water conservation projects. By attaching the financing to the property rather than the owner, C-PACE offers a unique way to fund these improvements with long-term, fixed-rate capital. This guide will walk you through the step-by-step process of securing C-PACE financing, ensuring you understand each stage and can successfully navigate the system.

Step 1: Assess Eligibility

The first step in the C-PACE financing process is to determine if your property and project are eligible. Eligibility criteria typically include:

• Property Type: C-PACE is available for commercial, industrial, agricultural, and multi-family residential properties (five or more units).

• Project Type: Eligible projects usually include energy efficiency upgrades, renewable energy installations, and water conservation measures.

• Location: Ensure your property is located in a jurisdiction with an active C-PACE program.

To check eligibility, you can visit your state or local C-PACE program's website or contact a program administrator.

Step 2: Identify Improvements

Next, identify the specific improvements you want to make. Common projects financed through C-PACE include:

• Energy-efficient HVAC systems

• Solar panel installations

• LED lighting upgrades

• Insulation and weatherization

• Water-saving fixtures and systems

Consult with an energy auditor or a C-PACE project developer to determine the best upgrades for your property and estimate the potential energy savings.

Step 3: Select a C-PACE Program Administrator

Different states and localities may have different program administrators. These administrators manage the C-PACE process and can provide guidance and resources. Some states have multiple administrators offering various services, while others have a single, centralized authority.

Step 4: Develop the Project

Work with your chosen program administrator and a qualified contractor to develop your project. This involves:

• Energy Audit: Conducting a thorough energy audit to identify potential savings and scope of work.

• Project Plan: Creating a detailed project plan that outlines the improvements, costs, and expected savings.

• Financing Proposal: Preparing a financing proposal that includes the total project cost, financing terms, and repayment schedule.

Step 5: Secure Financing

Once your project plan is developed, you will need to secure C-PACE financing. This involves:

• Submitting Application: Submit your application, including the project plan and financing proposal, to the program administrator.

• Underwriting: The program administrator will review the application, perform underwriting, and approve the financing.

• Closing the Deal: After approval, you will sign the financing agreement, which will be recorded as a special assessment on your property.

Step 6: Implement the Project

With financing secured, you can begin implementing your project. This stage includes:

• Hiring Contractors: Hiring qualified contractors to carry out the improvements.

• Construction: Overseeing the construction process to ensure the project is completed on time and within budget.

• Verification: Conducting a post-project verification to confirm that the improvements were installed correctly and are performing as expected.

Step 7: Repayment

C-PACE financing is repaid through a special assessment added to your property tax bill. Key features of the repayment process include:

• Fixed Payments: Payments are typically fixed over the term of the financing, making it easier to budget.

• Long-Term: Terms can extend up to 20 years, aligning the repayment with the lifespan of the improvements.

• Transferable: The assessment remains with the property, not the owner, making it transferable upon sale.

Conclusion

C-PACE financing offers a robust framework for funding energy efficiency, renewable energy, and water conservation projects. By following these steps, property owners can unlock the benefits of C-PACE and make meaningful improvements to their buildings.

If you have specifics for your state, please reach out.