C-PACE Enables Energy Efficiency Upgrades At Little To No Cost
C-PACE programs provide complete, upfront financing of energy efficiency upgrades to commercial buildings owners.
Building owners pay lenders back via an assessment on property tax bills; the money saved on monthly energy bills generally covers this cost.
Several localities throughout Virginia offer C-PACE programs, and a statewide program is currently in development.
As we’ve highlighted the past two weeks, energy efficiency measures help to cut back on the use of excess energy, which saves money for electric customers and reduces the amount of harmful carbon emissions released into the atmosphere. While some energy efficiency measures are as simple as flipping on a ceiling fan, others, such as upgrading to Energy Star appliances, can be costly. That’s why the state of Virginia offers a number of financial incentives intended to encourage residents and businesses to start saving energy and money. These incentives range from income tax deductions to cost-free weatherization for certain households.
But perhaps the most effective way to simultaneously save energy and money is via what’s known as commercial property assessed clean energy, or C-PACE programs. C-PACE is a financing structure that allows owners of commercial buildings to upgrade their buildings with energy efficiency measures and renewable energy systems. The fact that 100% of the financing is provided upfront causes C-PACE to stand out. C-PACE financing is available to all commercial properties whether they be office, industrial, retail, or multifamily residential properties.
Localities in Virginia have had the authority to establish C-PACE programs since 2009. Several localities have set up programs since then, including Arlington County, Norfolk, Fredericksburg, and Roanoke. A statewide C-PACE is currently being developed by Virginia Energy. While C-PACE is only available for commercial buildings in Virginia, Virginia Energy studied a program for residential buildings known as R-PACE last year. A report released recommended waiting for other states to develop successful R-PACE programs before implementing something similar in Virginia.
The way C-PACE works is simple. A commercial building owner interested in retrofitting an existing building or constructing a new, energy efficient building may contact a local C-PACE program. The C-PACE program connects the owner with a contractor, who can identify which energy efficiency measures or renewable energy systems make the most sense for the property. The C-PACE program also connects building owners to investors willing to fund the projects. To protect investors, financing is paid back in the form of an assessment on the building owner’s property tax bill; this enables the financing to be paid back over lengthy periods of time and allows the building owner to sell the property before fully paying back the loan.
Beyond cheaper electric bills and less carbon emissions, there are several benefits to C-PACE programs. C-PACE programs work as miniature workforce development programs, connecting contractors to steady financing that allows for consistent work. C-PACE programs also serve as a means to promote investment in local communities — since being introduced, C-PACE programs have generated a $15.8 billion economic impact nationwide.
With 100% of financing provided upfront at no cost to building owners, C-PACE programs provide an invaluable mechanism for funding energy efficiency upgrades. Thanks to numerous local programs in every part of the state and a statewide program coming soon, C-PACE provides Virginians with an affordable way to prioritize energy efficiency while creating jobs and investing in communities.