Main Benefits of Using C-PACE Financing for New Construction
C-PACE (Commercial Property Assessed Clean Energy) financing offers several key benefits for new construction projects, including:
- Long-term, Low-cost Capital:
- C-PACE provides long-term financing options, typically ranging from 20 to 30 years, which can help reduce the burden of upfront costs associated with energy efficiency and sustainability measures in new construction projects.
- The financing is structured as an assessment, repaid through property taxes, making it a stable and predictable cost.
- Flexibility in Capital Stacking:
- Developers can use C-PACE as part of their capital stack to lower the weighted average cost of capital, potentially replacing more expensive debt and equity options.
- It allows developers to increase their overall available capital for higher-quality materials and systems, enhancing the sustainability and performance of their buildings.
- Eligibility for Various Improvements:
- C-PACE financing is eligible for a wide range of improvements, including energy efficiency, renewable energy systems, water reduction measures, and resiliency projects like seismic and storm protection.
- This enables developers to incorporate advanced technologies such as solar photovoltaics, electric vehicle charging stations, and high-efficiency HVAC systems into their projects.
- Simplified Repayment Structure:
- Repayment is tied to property tax bills, which reduces the financial strain of monthly payments and provides predictability in cash flows.
- The assessment remains with the property upon sale, offering built-in seller financing benefits.
- Non-Recourse Financing:
- C-PACE financing is non-recourse, meaning that the repayment obligation is tied to the property rather than the borrower personally, reducing personal financial risk.
- Increased Project Viability:
- By providing access to affordable financing, C-PACE can make projects more viable that might otherwise be unfeasible due to high upfront costs for energy-efficient or sustainable features.
These benefits make C-PACE an attractive option for developers aiming to build more efficient and sustainable properties while managing costs effectively.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-benefits-of-using-c-pace-financing-for-new-construction/
