Benefits of C-PACE

I’m a municipality: Why Should I Like PACE?

  • Legislation passed in June 2012 allows interested municipalities to “opt-in” to this financing program that is administered by CEFIA. Municipalities across the state are beginning to take advantage of this new program.
  • C-PACE allows building owners in enabled municipalities to access financing to upgrade their buildings.
  • C-PACE is an economic development tool for municipalities. Energy upgrades create a more competitive environment for businesses by lowering energy costs.
  • Energy upgrades create jobs, reduce pollution, and attract new businesses to town.
  • Many communities across Connecticut have made commitments to clean energy – C-PACE offers a way for building owners to finance those commitments.
  • Energy upgrades reduce greenhouse gases and other pollutants.
  • CEFIA is working with municipalities to reimburse for costs associated with joining the program.


I’m a building owner: Why Should I Like PACE?

  • 100% upfront financing for qualified energy upgrades.
  • PACE lien stays with the property if it changes owners and doesn’t accelerate in case of default.
  • Allows building to finance improvements while incurring no additional debt on a property.
  • Allows projects to be cash flow positive from the outset because the financing offered is relatively low cost and payable over an extended period of time (up to 20 years);  this means that the energy savings can more than offset the increase in property tax increase.
  • PACE assessments qualify as an operating expense under most triple-net lease agreements. This means payments (as well as the energy savings) can be passed along to tenants.
  • Security of the tax lien allows building owners, who often lack investment grade credit ratings, to access third party financing for energy upgrades.
  • Deeper energy upgrades possible because the term of the assessment is up to 20 years and stays with the property, rather than the owner.
  • Using property assessment preserves capital and credit line for core business investments.
  • Improved attractiveness of building, including better indoor air quality and comfort for tenants.
  • I’m a mortgage holder: Why Should I Like PACE?
  • Energy upgrades, particularly in a state with high energy prices like Connecticut, can significantly lower the net operating income of the building, which lowers its value once the appropriate cap rate is applied. 
  • Connecticut’s law requires that the Savings to Investment ratio on approved deals must be greater than 1, which is to say that the economics of the building will be strengthened from the outset and throughout. Since a high Savings to Investment ratio results in positive cash flow, the building will see an increased NOI and an immediate ROI.
  • The technical standards that will govern the PACE program are designed to provide a robust framework for measurement and verification of energy savings estimates. Click here for the financial standards of eligible upgrades. In the case of a default, only the assessments in arrears are due.
  • PACE-funded energy upgrades may increase property value.
  • Connecticut’s law requires that property owners receive the written consent of their existing mortgage holder before being eligible for PACE financing. Mortgage lenders will be at the table helping to determine whether a property can undertake this voluntary assessment.


I’m an investor: Why Should I Like PACE?

  • The security of a PACE investment comes from its position as a tax lien on a property. The tax lien, like all public benefit assessments, sits in a senior position.  The repayment is tied to property taxes, which is a very secure stream of payment.
  • Energy prices in Connecticut are high and an investment in energy upgrades can quickly pay for themselves.
  • Connecticut has established a statewide program, which will be administered by the Clean Energy Finance and Investment. One set of standards will govern the program.
  • Note: CEFIA is seeking to pre-qualify capital providers for the C-PACE program. Please click here for the RFI.


I’m a contractor: Why Should I Like PACE?

  • The biggest barrier to converting leads to deals for energy upgrades is the lack of access to upfront financing. PACE solves this.
  • By allowing a property owner to access 100% upfront financing for energy upgrades, the demand for building energy improvements will grow in Connecticut – and jobs will be created.
  • The longer payback period of PACE financing, up to 20 years, allows for deeper energy upgrades in buildings to be financeable.
  • As administrator of the program, CEFIA will pre-qualify and highlight auditors and contractors on its website and in marketing material. Additionally, qualified contractors will have access to market research commissioned by CEFIA.

 

 

 

<back to C-PACE home>