The C-PACE (Commercial Property Assessed Clean Energy) financing approval process involves several key steps:
Overview of C-PACE Financing
C-PACE is a state-enabled financing mechanism that allows building owners to access low-cost, long-term financing for energy-related improvements, such as energy efficiency upgrades and renewable energy installations. The financing is secured by a benefit assessment lien attached to the property.
Steps in the Approval Process
Here is a step-by-step guide on how the approval process works:
- Project Eligibility and Proposal:
- Contractor Selection: Property owners work with a contractor to identify and propose energy-saving improvements. Although it is beneficial to use a contractor familiar with C-PACE, it is not mandatory.
- Scope of Work: The contractor furnishes a detailed proposal including the scope of work and estimated costs.
- C-PACE Program Application:
- Property owners can apply for C-PACE financing when they have a clear scope of work and proposal from a contractor. They do not need to have a signed contract at this stage.
- The application includes providing details about the property, the project scope, and estimated savings.
- Program Administrator Review:
- The C-PACE program administrator reviews the application to ensure the project meets eligibility criteria and to verify the estimated energy savings and costs.
- Some states may have specific “Savings to Investment Ratio” requirements that the project must satisfy.
- Mortgage Lender Consent:
- For properties with existing mortgages, obtaining consent from the mortgage lender is crucial. This is because C-PACE assessments create a senior lien on the property, which can affect the mortgage.
- This step can add complexity and time to the approval process.
- Approval and Funding:
- Once approved, a tax assessment is placed on the property, and the financier funds the eligible improvements. The property owner repays the loan as part of their property tax bill over a long-term period, typically ranging from 10 to 30 years.
- The assessment is typically non-recourse and transferable, meaning it remains tied to the property even if sold.
- Closing and Project Implementation:
- The property owner works with the C-PACE team and contractor to complete the project as planned.
- The project timeline can influence the overall approval and closing process.
Timeline for Approval and Closing
The C-PACE financing process can be completed quickly, with some projects going from application to closing in as little as one month. However, this timeline often aligns with the broader project development and construction schedule, and delays in these processes can impact the overall duration.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-c-pace-financing-approval-process-work/
