C-PACE Legislation: A Look at Policy and Legal Framework

C-PACE Legislation: A Look at Policy and Legal Framework

Commercial Property Assessed Clean Energy (C-PACE) programs have gained traction as a mechanism to finance energy efficiency, renewable energy, and water conservation upgrades to buildings. These programs allow property owners to finance improvements through a voluntary property assessment, which is repaid over time through the property tax bill. However, the legislative and legal frameworks governing C-PACE vary significantly across different states in the U.S. This article delves into the policy and legal nuances of C-PACE legislation across key states, providing a comprehensive understanding of the landscape.

Understanding C-PACE

C-PACE programs are designed to help commercial property owners overcome the high upfront costs of energy improvements by spreading the cost over a period of up to 20 years. The unique aspect of C-PACE is that the financing is attached to the property rather than the owner, making it transferable upon sale. This feature, along with the potential for positive cash flow from energy savings, makes C-PACE an attractive option for property owners and investors.

States with Active C-PACE Programs

C-PACE programs are currently active in several states, each with its unique legislative framework. The following sections provide an overview of key states where C-PACE is operational, highlighting the differences in policy and implementation.

California: A Comprehensive Market

California was one of the first states to adopt C-PACE legislation with AB 811 and AB 474, enabling property owners to finance energy improvements through a special assessment. California's C-PACE market is one of the largest in the country, with multiple program administrators offering a wide range of services. The state has a comprehensive approach, covering energy efficiency, renewable energy, and water conservation projects.

Key Features:

• Open market with multiple administrators

• Wide range of eligible improvements

• Strong market presence with significant project funding

Colorado: Focus on Energy Efficiency

Colorado's C-PACE program, enabled by HB 16-1270, focuses on energy efficiency, renewable energy, and water conservation projects. The program is administered by Colorado C-PACE, which provides technical assistance and streamlined processes for property owners.

Key Features:

• Centralized administration by Colorado C-PACE

• Emphasis on energy efficiency projects

• Technical assistance for project development

Florida: Including Resiliency

Florida's C-PACE legislation, established by HB 7179, includes energy efficiency, renewable energy, and resiliency improvements. The state has multiple program administrators, including the Florida PACE Funding Agency, allowing for a diverse range of project types.

Key Features:

• Includes resiliency improvements (e.g., hurricane protection)

• Multiple administrators providing program flexibility

• Strong focus on both energy and resiliency

New York: Demonstrating Energy Savings

New York's C-PACE program, governed by Article 5-L of the General Municipal Law, requires property owners to demonstrate energy savings as a condition for financing. The program is administered by Energize NY and supports a wide range of energy and water conservation projects.

Key Features:

• Requirement to demonstrate energy savings

• Administered by Energize NY

• Comprehensive support for energy and water projects

Texas: Open Market Administration

Texas adopted C-PACE through SB 385 and SB 2452, emphasizing an open market approach with multiple program administrators. The Texas PACE Authority oversees the program, ensuring compliance and providing resources for property owners.

Key Features:

• Open market administration with multiple options

• Strong emphasis on compliance and oversight

• Flexibility in project types and financing

Connecticut: Pioneering State-Wide Program

Connecticut was the first state to implement a state-wide C-PACE program under Public Act No. 11-80. Administered by the Connecticut Green Bank, the program focuses on energy efficiency and renewable energy projects, offering a streamlined process for property owners.

Key Features:

• First state-wide C-PACE program

• Centralized administration by Connecticut Green Bank

• Focus on energy efficiency and renewable energy

Conclusion

C-PACE programs offer a valuable financing mechanism for property owners seeking to improve energy efficiency, incorporate renewable energy, and enhance resilience. However, the legislative and administrative frameworks vary significantly across states, impacting the implementation and success of these programs. By understanding these differences, property owners, investors, and other stakeholders can better navigate the C-PACE landscape and leverage the opportunities it presents.