C-PACE financing is not debt, and it’s a great way to preserve capital

C-PACE can even be used retroactively for three years.

WHAT IS C-PACE

Commercial property assessed clean energy (C-PACE) is a tool that can finance energy efficiency and renewable energy improvements on commercial property. Like other project financing, C-PACE uses borrowed capital to pay for the upfront costs associated with energy efficiency or renewable energy improvements. Unlike other project financing, the borrowed capital is repaid over time via a voluntary tax assessment. The security provided by the tax assessment, a long-used and well understood mechanism, results in several compelling features, including longer term financing and transferability of the repayment obligations to the next property owner. In turn, C-PACE strengthens the business case for investment in longer payback and deeper building retrofits beyond what is possible with traditional financing.

Why C-PACE Matters for State and Local Governments

C-PACE is not a federal program, and public funding is not necessary to run a C-PACE program. C-PACE must be authorized by state legislation, and requires further authorization from local governments. More than 30 states have adopted C-PACE enabling legislation because of the opportunities for investment in local businesses, energy and cost savings, and job creation.

Private firms often participate in C-PACE as lenders, developers, administrators, contractors, and marketers. With limited public funding, state and local governments are increasingly interested in attracting private dollars to take full advantage of the opportunities associated with energy efficiency and renewable energy investment.