C-PACE (Commercial Property Assessed Clean Energy) financing impacts property tax bills by adding a special assessment that covers the cost of energy-efficient or renewable energy improvements. This assessment is attached to the property itself, not the property owner, meaning that it can transfer to new owners if the property is sold.
Here’s how C-PACE financing affects property tax bills:
- Financing Terms: C-PACE allows property owners to finance up to 100% of eligible energy-related projects without an upfront payment. The repayment term matches the useful life of the improvements, typically ranging from 20 to 30 years.
- Assessment Structure: The repayment is made through annual or semi-annual property tax bill assessments. This works similarly to how local utilities are paid.
- Transferability: The C-PACE assessment remains with the property if it is sold. This means new property owners will be responsible for continuing the payments.
- Potential Cost Savings: While the assessment increases the property tax bill, the energy-efficient improvements it finances often lead to significant cost savings on energy and water bills. These savings can offset the additional assessment costs.
- Triple Net Leases: In triple net lease arrangements, tenants typically cover property taxes. Therefore, they would also be responsible for the C-PACE assessment, which can be passed through to them by the property owner. This can be beneficial for property owners, as they reap the benefits of energy-efficient upgrades without directly covering the costs.
Overall, C-PACE financing offers a unique financing opportunity for property owners to invest in sustainable improvements while potentially benefiting from cost savings and increased property value over time.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-c-pace-financing-impact-property-tax-bills/
