Commercial Property Assessed Clean Energy
C-PACE Financing Program Approved
Program Will Provide Energy Financing for Connecticut's
Commercial and Industrial Customers
Rocky Hill, Conn., June 27, 2012 —The Clean Energy Finance and Investment Authority (CEFIA) is preparing to roll out a new program designed to encourage clean energy projects in commercial and industrial buildings throughout Connecticut.
During a special session of the legislature June 12, action was taken to approve a Commercial Property Assessed Clean Energy (C-PACE) program, which will allow commercial and industrial property owners to pay for energy-related improvements to their properties using a finance program that offers low fixed rates and longer repayment periods than traditional loans. Public Act 12-2, which contains provisions for C-PACE, was signed by Governor Malloy on June 15.
“C-PACE will play a significant role in helping Connecticut become a national leader in clean energy by facilitating major energy savings for commercial and industrial properties,” said CEFIA President Bryan Garcia. “It also creates new opportunities for Connecticut banks and financial institutions to invest in local clean energy projects through a proven financing mechanism.”
“The Clean Energy Finance and Investment Authority looks forward to working with the Connecticut Bankers Association, Connecticut Business and Industry Association, Connecticut Conference of Municipalities, Connecticut Energy Efficiency Fund, and numerous other key stakeholders to develop standards and protocols to support this statewide clean energy financing effort,” Garcia said. “C-PACE is a ‘win’ for all involved, as it will encourage and enable local institutions to invest in commercial clean energy projects and help Connecticut’s businesses stabilize their energy costs and continue to increase their competitiveness.”
Under C-PACE, the cost of an energy project may be funded by special financing arranged through CEFIA and repaid annually by the property owner through a special “benefit” assessment on their property tax bill. C-PACE spreads the cost of energy improvements over the expected life of the measures and allows the repayment obligation to transfer automatically, like other property assessments, to the next owner if the property is sold.
Benefit assessments are a safe and familiar tool of municipal finance that has been used for many projects including, street paving, water and sewer systems, and street lighting. C-PACE is a proven and effective vehicle to attract private capital into the clean energy market. Twenty-seven states and the District of Columbia have PACE enabling policy and thousands of energy projects have been funded through PACE assessments.
In exchange for easy access to low-interest C-PACE financing, building owners repay the cost of the upgrade through an assessment on property taxes. C-PACE upgrades will keep energy costs down and Connecticut businesses competitive. By attaching repayment for the upgrades to the property tax, C-PACE can attract lower-cost capital since it is viewed as a secure investment. Among other benefits, C-PACE will support job creation, contribute to the resiliency of the utility grid by reducing demand for electricity, and drive investment in clean energy technologies within Connecticut.
CEFIA will play an important role as the C-PACE program administrator—working to support cities and towns, commercial and industrial companies, and financial institutions to implement the program. CEFIA, through its role as program administrator will seek to aggregate demand for projects, source capital, and use the tools of the state to bring down the cost of capital.
CEFIA along with many critical partners, including the Connecticut Department of Energy and Environmental Protection, Connecticut Business and Industry Association, Connecticut Bankers Association, Connecticut Conference of Municipalities, local clean energy developers, environmental groups, and other non-profit organizations worked collaboratively to achieve the passage of C-PACE legislation. CEFIA and program partners have already begun to work on implementation to achieve a robust C-PACE program in anticipation of a successful program launch in early 2013.
Connecticut’s C-PACE policy is unique in having been created with the support of the banking community. The support of Connecticut’s banking industry positions Connecticut to be a national leader in advancing the deployment of clean energy through financing.
About the Clean Energy Finance and Investment Authority
CEFIA was established by Connecticut’s General Assembly on July 1, 2011 as a part of Public Act 11-80. This new quasi-public agency supersedes the former Connecticut Clean Energy Fund. CEFIA’s mission is to help ensure Connecticut’s energy security and community prosperity by realizing its environmental and economic opportunities through clean energy finance and investments. As the nation’s first full-scale clean energy finance authority, CEFIA will leverage public and private funds to drive investment and scale-up clean energy deployment in Connecticut. For more information about CEFIA, please visit www.ctcleanenergy.com.