C-PACE Gives Power of Tax Assessments to Business Owners
Commercial Property Assessed Clean Energy is a public/private partnership funding mechanism to help owners improve their buildings
Adding a line item to property tax bills is not usually something that commercial entities relish, but Colorado C-PACE is putting the business investment power of a tax assessment into the hands of building owners.
C-PACE, or Commercial Property Assessed Clean Energy, is a public/private partnership funding mechanism that takes advantage of the financial stability of property taxes to help owners improve their buildings. The program is active in 19 states and started in Colorado in summer 2016 through the Colorado Energy Office (CEO), says Tracy Phillips, program director. The Colorado option has been approved by 19 county governments so far and is being considered in seven additional counties.
The financing is open to owners and developers of office, retail, hotel, industrial, public, health care, agricultural and multi-family buildings with five or more units. Nonprofits that do not pay property taxes also are eligible, Phillips says, by using a county-issued parcel identification number. Owners can finance energy and water efficiency improvements, add renewable energy systems, address deferred maintenance or fund upgrades of equipment above local energy building codes.
Jeffrey King, CEO program manager, says C-PACE addresses a gap in the marketplace and provides 100 percent financing for up to 20 years to cover both hard and soft costs, including energy audits and front-end assessments. With the security of loans paid back through county tax collection, the program has engaged a variety of 21 commercial lenders offering attractive interest rates, King says. C-PACE has funded $15 million total for 13 projects so far.
This spring, construction is scheduled for the first C-PACE project for an agricultural producer. The fourth-generation family-owned organic orchard Ela Family Farms near Hotchkiss will utilize $60,000 in C-PACE funding to add to an existing solar PV system that cools a fruit warehouse.
“It just makes good business sense,” owner Steve Ela says of his 10-year business loan with no down payment. “C-PACE brokered the loan and put it out for bid. It saved a lot of footwork and time and made it a very simple process. Essentially, the loan payment is what we would have spent anyway in (avoided) utility bills.”
Other examples of funded projects include $7.1 million in energy retrofits for two six-story office buildings at Fiddlers Green Center in Greenwood Village that is projected to save 30 percent in future energy and maintenance costs, and a $1.1 million energy makeover for an 80,000-square-foot office building on Havana Street in Denver projected to improve energy efficiency by 38 percent.