C-PACE (Commercial Property Assessed Clean Energy) Financing Benefits
C-PACE financing offers several benefits in states like California and New York:
Benefits of C-PACE Financing
- 100% Upfront Financing: C-PACE provides 100% financing for eligible energy efficiency, water conservation, seismic strengthening, and wildfire hardening measures, significantly reducing or eliminating the need for upfront capital investments.
- Long-term Fixed-Rate Financing: Loans typically have terms ranging from 20 to 30 years, offering predictability and stability in repayment costs. This can be especially advantageous for long-term energy-saving projects.
- Non-Recourse Basis: Financing is generally non-recourse upon completion, meaning that personal or corporate guarantees are not required. This reduces the financial risk for property owners.
- No Acceleration in Default: Unlike traditional loans, C-PACE financing does not accelerate repayment in case of default. This provides more flexibility and protection for property owners.
- Transferability: The C-PACE lien can be transferred with the property upon sale or refinancing, making it an attractive option for long-term property holders.
- Off-Balance Sheet Treatment: Repayment can be treated as an operating expense (OPEX), which may be passed through to tenants. This allows property owners to avoid adding debt to their balance sheets.
- Support for New Construction and Retrofits: C-PACE financing supports both new construction projects and existing building retrofits, allowing owners to implement sustainable upgrades without significant upfront costs.
- Eligible Projects: It can cover hard and soft costs associated with HVAC, LED lighting, solar installations, seismic strengthening, and wildfire safety measures, among others.
- Tailored Prepayment Fees: The financing structure includes step-down prepayment fees that decrease over time, providing more financial flexibility as the loan progresses.
- ESG and Social Responsibility: By facilitating sustainable upgrades, C-PACE helps property owners achieve environmental, social, and governance (ESG) goals, enhancing their properties’ value and appeal in a socially responsible manner.
Overall, C-PACE financing in California and New York offers a robust framework for commercial property owners to enhance their buildings’ sustainability and resilience while managing costs more effectively.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-benefits-of-c-pace-financing-in-states-like-california-and-new-york/
