The repayment structure of C-PACE (Commercial Property Assessed Clean Energy) financing, while standardized in many aspects, can vary slightly by state due to differing legislative frameworks that enable this financing mechanism. Below are key points explaining how C-PACE operates and how its repayment structure may vary by state:
Key Components of C-PACE Repayment Structure
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Repayment Method:
- C-PACE financing is repaid through a voluntary property tax assessment. This assessment is typically tied to the property, not the owner, and is paid semi-annually with property taxes.
- If the property is sold, the repayment obligation transfers to the new owner.
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Term and Rate:
- The repayment term usually matches the useful life of the improvements, typically ranging from 20 to 30 years.
- C-PACE offers fixed rates, which can vary by state depending on local regulations and market conditions.
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Eligibility and Projects:
- Eligible projects include energy efficiency improvements, renewable energy installations, water conservation measures, and sometimes seismic strengthening and wildfire hardening.
- The specific types of projects eligible for C-PACE financing can differ by state due to varying legislative definitions of what qualifies as a public benefit.
Variations by State
While the core principles of C-PACE remain consistent across states, variations may occur:
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Availability:
- C-PACE financing is available in over 40 states, each with its own enabling legislation.
- Specific rules and procedures may differ slightly based on state enactments.
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Eligible Projects:
- Some states might allow additional types of projects, such as resiliency measures or specific types of seismic upgrades, based on local priorities.
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Program Administration:
- State-specific programs may administer C-PACE differently, affecting the application process, repayment terms, or benefits for property owners.
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Look-back Periods:
- Some states allow property owners to utilize C-PACE financing during look-back periods, enabling them to refinance expenses incurred up to three years prior. This provision can vary by state.
Overall, while the basic structure of C-PACE repayment remains consistent across states, the specifics regarding eligibility, terms, and administration can vary due to state-level legislation and market conditions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-repayment-structure-of-c-pace-financing-vary-by-state/
