What is Commercial Property Assessed Clean Energy (C-PACE) Financing?
Commercial Property Assessed Clean Energy, or C-PACE, empowers commercial property owners to
finance energy efficiency, water conservation, and renewable energy projects with no upfront costs.
Commercial property owners can receive long-term, 100 percent fixed-rate financing from qualified
capital providers, and repay that loan as a line item on their property tax bill. C-PACE is based on the
premise that just like sewer lines or flood mitigation systems benefit a community as a whole, so does conserving energy and water.
Who can use C-PACE in Illinois?
C-PACE can be used for commercial properties, with some exceptions. C-PACE commercial properties include all office, retail, industrial, and most special use or not easily categorized properties. Non-profit owners can typically qualify if they are able to receive special assessments on their property tax bills such as stormwater charges.
C-PACE can be used for retrofit of existing buildings and new construction.
What are the benefits of C-PACE Financing?
C-PACE has the potential to unlock savings opportunities for local businesses, to upgrade or facilitate retrofits for aging properties, and to contribute to state and local government environmental conservation and renewable energy goals. C-PACE is a powerful tool for local governments interested in offering more economic development opportunities for their communities. For local contractors, C-PACE can mean more business and more local hiring. For capital providers, C-PACE can be an appropriate financing tool to replace or supplement conventional debt financing. For property owners, C-PACE Financing can offer long-term, fixed-rate non-recourse financing with no upfront costs. C-PACE Financing has a unique advantage over conventional financing because it is a lien secured against the property that does not accelerate upon transfer of ownership.
Who is eligible to use C-PACE?
C-PACE is currently available to commercial properties (office, retail, warehouse, medical, nursing homes, hospitality, agricultural, industrial, and vacant land among others) located within a C-PACE jurisdiction. Eligible properties may be owned by non-governmental, tax-exempt organizations that operate facilities such as community centers, hospitals, theaters, schools, religious facilities, etc. Residential and multifamily residential (including senior housing) properties are not eligible.
What types of projects will C-PACE finance?
Any type of clean energy projects, including energy efficiency improvements, alternative energy systems, and water conservation projects, which are implemented at an eligible property. The types of projects vary but usually are designed to reduce the carbon intensity and/or utility and/or fuel costs, with water, electricity, oil, coal and natural gas being the main five for industrial and commercial enterprises. The aim of an energy conservation measure (ECM) should be to achieve savings by reducing the amount of energy or water used by a particular process, technology or facility or eliminating the use of fossil fuel. Examples of eligible measures include, but are not limited to:
• Automated building controls
• Boilers, chillers, and furnaces
• Building envelope
• HVAC controls and upgrades
• High-efficiency lighting
• Solar PV systems
• Water efficiency/hot water systems
• Engineering, audits, and soft costs
Does IECA help design and finance C-PACE projects?
The IECA PACE Program does not provide design and financing services. Property owners work with a qualified energy engineering professional to design a project, develop a scope of work, and submit an energy survey that establishes the energy and water savings through usage reduction or energy generation. This energy survey will determine the viability of the project per the program guidelines. The IECA PACE Program operates an "open-market" program, therefore, property owners can select their preferred C-PACE Capital Provider from a list of capital providers that have registered with the program. The open market model gives eligible property owners access to a range of private capital providers that offer competitive rates and financing terms and conditions.
How can I get approved for C-PACE financing?
Briefly, the application and approval process is as follows:
- Determine initial project eligibility and complete the pre-application. The Program Administrator will review the pre-application and respond to interested applicants within approximately four business days.
- Develop the project scope by working with a qualified contractor or project developer to finalize the scope of work.
- Submit a final application with supporting documentation, including the energy survey.
- Identify a capital provider and comply with all requirements.