Category: PACE

Richmond C-PACE Program Aims to Encourage Clean Energy Updates

Richmond property owners rehabbing or developing commercial properties soon will have a new financial incentive to include clean energy and water efficiency upgrades in their projects.

City Council last week adopted Richmond’s first C-PACE program, formally called a Commercial Property Assessed Clean Energy Financing Program. It allows property owners to pursue 30-year loans to help finance clean energy improvements for both existing buildings and new construction.

 

Read More (Richmond BizSense)

‘Barrier Against Default for Private Lenders’ in Alexandria?

City Council will decide on Wednesday, May 1 whether to reserve funds for a “green” building program, which would enable private lenders to collect debts via the city government’s taxing power.

Proponents say the program — dubbed Commercial Property Assessed Clean Energy (C-PACE) — would enable building owners to invest in eco-friendlier building upgrades, like HVAC systems and roofs. They think such upgrades could yield a relatively big positive environmental impact, since buildings are major greenhouse gas emitters.

With C-PACE, eligible debt attaches to the building, which passes to the new owner if the building is sold. It’s repaid through a special assessment on the property, as a tax bill addition.

“This can address a key disincentive to investing in energy improvements because many property owners are hesitant … if they think they may not stay in the property long enough for the resulting savings to cover the upfront costs,” according to the Department of Energy.

With zero-down and long repayment terms, C-PACE may enables owners to finance upgrades for which they might otherwise lack sufficient cash.

“The annual energy savings for a PACE project usually exceeds the annual assessment payment, so property owners are cash flow positive immediately,” according to the C-PACE Alliance, a coalition of firms. “[Net new revenue] can be spent on other capital projects, budgetary expenses, or business expansion.”

The Ivy Knoll Caring Senior Community in Covington, Ky. illustrates the benefits, says Jessica Greene of the Virginia Energy Efficiency Council. With a $750,000 C-PACE loan, Ivy Knoll installed, among other things, heating and cooling controls that reduce energy costs by some 20 percent.

Read more (Alexandria Gazette Packet)

Albemarle supervisors get update on climate plan

Albemarle County’s goal is to reduce overall community greenhouse gas emissions by 45 percent by 2030 and reach net zero by 2050.

County staff is recommending the goal as part of the first phase of the Climate Action Plan process, and the goal is consistent with the latest recommendations of the International Panel on Climate Change.

“It’s not just a goal for county operations; this is a goal for the entire community included within the jurisdictional boundary of Albemarle County,” said Narissa Turner, the county’s climate programs coordinator.

Read More (Daily Progress)

NVRC Releases a New Interactive Dashboard of LEED Properties

VAEEC member, the Northern Virginia Regional Commission (NVRC), has put together an interactive dashboard of all LEED certified buildings in Virginia. These buildings represent a significant investment in resiliency and sustainability. Programs like PACE (Property Assessed Clean Energy) are an important financial tool to provide options to a building owner considering some level of LEED certification.

Read More (NVRC)

Lessons in Commercial PACE Leadership: The Path from Legislation to Launch

(Electricity Markets and Policy Group, Berkeley Lab)

Nonresidential buildings are responsible for over a quarter of primary energy consumption in the United States. Efficiency improvements in these buildings could result in significant energy and utility bill savings. To unlock those potential savings, a number of market barriers to energy efficiency must be addressed.

Commercial Property Assessed Clean Energy (C-PACE) financing programs can help overcome several of these barriers with minimal investment from state and local governments. With programs established or under development in 22 states, and at least $521 million in investments so far, other state and local governments are interested in bringing the benefits of C-PACE to their jurisdictions.

Lessons in Commercial PACE Leadership: The Path from Legislation to Launch, aims to fast track the set-up of C-PACE programs for state and local governments by capturing the lessons learned from leaders. The report examines the list of potential program design options and important decision points in setting up a C-PACE program, tradeoffs for available options, and experiences of stakeholders that have gone through (or are going through) the process.

C-PACE uses a voluntary special property assessment to facilitate energy and other improvements in commercial buildings. For example:

  • Long financing terms under C-PACE can produce cash flow-positive projects to help overcome a focus on short paybacks.
  • Payment obligations can transfer to subsequent owners, mitigating concern about investing in improvements for a building that may be sold before the return on the investment is fully realized.
  • 100% of both hard and soft costs can be financed.

Read the full report. 

SEIA Announces Release of Two Documents to Open Commercial & Industrial Solar

WASHINGTON, D.C. – The Solar Energy Industries Association (SEIA) announced today the release of two documents designed to spur investment in commercial solar projects.

The first document is a contract that combines the benefits of a Power Purchase Agreement (PPA) with Property Assessed Clean Energy (PACE) to provide customers with a valuable new financing option.

“The PACE PPA further builds out SEIA’s suite of model contracts so all solar transactions can be efficiently negotiated and financed,” said Mike Mendelsohn, SEIA’s senior director of project finance & capital markets. “Our goal is to broadly open the U.S. commercial real estate sector for solar deployment, and the PACE PPA is a valuable tool to allow that progress to happen.”

Read more (Solar Energy Industries Assoc.)

PACENation responds to the August 15, 2017 Wall Street Journal story, “More Borrowers Are Defaulting on Their ‘Green’ PACE Loans”

Residential PACE has been the best financing solution for the roughly 160,000 homeowners who have used it for energy, water, and safety related projects that they wanted or needed to make; projects that made their homes more comfortable, healthier, safer, less expensive to heat and cool, and more valuable. State and local government partners also appreciate the tens of thousands of local jobs that R-PACE has helped create and sustain. PACE financing for commercial, industrial, agricultural and non-profit owned properties is now available widely throughout the United States, a success story the Journal has ignored.

There is a great story to tell. But instead, the Wall Street Journal, yesterday, ran another in a series of misleading stories about PACE. Yesterday’s, again, includes many ill drawn conclusions and seems to reflect the author’s clear bias for sensationalism.

There is simply no evidence to suggest that PACE is a looming crisis for the banking industry or homeowners.  None.  Zero. There is no data to suggest that PACE homes are delinquent or likely to default at rates higher than those for the broader housing market in PACE served communities. With more than 60,000 new homes using PACE over the previous year, it is not surprising that the number of defaults has increased. But there is absolutely no indication that the PACE assessment has been the direct cause of the delinquencies or defaults in any but the tiny number of anecdotal cases that the Journal has reported on.

Read more (PACENation)

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