Petros PACE Finance Blog
Commercial Property Assessed Clean Energy (C-PACE) is in its first decade of turning commercial properties into energy savers. As the United States continues to go green, this creative finance solution—100% financing of all upfront costs— makes energy upgrades, that otherwise might go unfinished, even more compelling to execute for property owners and developers. Scientific American Magazine even called C-PACE a top 20 world changing idea for it’s ability to make sustainable and affordable changes in commercial real estate’s energy initiatives. What is C-PACE exactly, and how can it save energy and capital?
C-PACE is rapidly spreading across the country since it was first introduced in 2007. C-PACE allows property owners to pay for energy efficiency and renewable energy projects through an addition to their property tax bill, overcoming high upfront costs that prevent most property owners from investing in energy upgrades. C-PACE is essentially a long-term (typically 10 to 30 year), low-cost assessment for such improvements including mechanical systems (HVAC), renewable energy, lighting and seismic strengthening (to name a few).
Last year, we closed the first multi-tenant office building C-PACE deal in Houston. As the finance provider, we were excited about this project. The property, built in 1983, had 35-year-old chillers and an outdated control system. The energy upgrades were going to be costly, and to eliminate upfront capital the property management turned to C-PACE to finance the project. Since we provide 100% financing, it quickly reduced that burden. The project was a success and will provide $3.66 million in savings over the 20-year term. The reduction of CO2 emissions from this project is the equivalent of 29,000 tree seedlings grown over 10 years. It shows the power of C-PACE to improve the bottom line and help conserve energy. This is one example of many successful C-PACE projects we’ve closed over the years.
As C-PACE continues to go mainstream—18 states currently have active programs with others in the pipeline—the Petros PACE Finance team is eager to share insights we’ve picked up along the way after closing deals in 10 of those states.
We want to be an advocate for C-PACE programs and showcase how easy and affordable it is to finance vital improvements to commercial properties that will not only increase the property value, but also decrease the environmental impact. We’re launching our Petros PACE Finance Blog to help educate other market stakeholders on this new tool that can help save energy and capital.
CEO, Petros PACE Finance