Program aims to finance green projects in Pa.
Many businesses want to have solar arrays on their roofs, water-conservation technology inside their buildings and energy-efficient heating and cooling systems in their offices.
Property owners like the idea of being conscious about energy use, saving money on energy consumption and attracting customers and workers to buildings that reflect their views on sustainability.
But businesses struggle to pay for the upgrades that turn ideas into reality.
To help businesses in Central Pennsylvania and throughout the state, four organizations are collaborating on a new financing model for energy-efficiency upgrades: the Commercial Property Assessed Clean Energy, or C-PACE, program.
The program offers property owners an alternative means to repay loans taken out for energy-efficient projects.
Pennsylvania is one of 36 states to adopt the program, which applies to industrial, commercial or agricultural properties. It does not apply to residential or multifamily properties.
Guidelines for Pennsylvania’s program are being developed by a nonprofit in Schnecksville called Sustainable Energy Fund, as well as the Keystone Energy Efficiency Alliance, Philadelphia Energy Authority and the City of Pittsburgh Sustainability Commission.
The four organizations drafted program guidelines and are making them available for public comment through Jan. 18. The organizations expect to finalize the guidelines by the end of January. For more information, visit www.PennsylvaniaCPACE.org.
“I think C-PACE has a proven track record across the country, driving investments into energy efficiencies,” said Julian Boggs, policy director for Keystone Energy Efficiency Alliance, based in Philadelphia.
The program can fund up to 100 percent of a project’s total costs, with the loan repaid through a fee tacked onto a property tax bill. The money is collected by a county or municipality, which must agree to take part in the program, and then sent to the private-sector lender that originated the loan.
“That structure allows a lender to make a long-term investment,” Boggs said.
Most C-PACE loans have a lifespan of 15 to 20 years, he added.
Under the legislation, the property owner and the C-PACE lender have to obtain a letter of consent from the property’s mortgage holder, such as a bank, said John Costlow, president of Sustainable Energy Fund. That’s because the C-PACE lien would be senior to the mortgage.
Eligible projects can include everything from solar arrays to efficient air compressors. Average project costs are between $250,000 and $300,000 and rarely are below $50,000, Boggs added, noting that project costs can run up to the millions.
Regional and national companies have seen the program operating in other states and it could be an appealing tool for those looking to cut energy costs and pollution, Boggs said.
“It can tackle a lot of barriers businesses face when they are trying to make those investments,” Boggs said.
Once the guidelines are finalized, the organizations will approach each county in the state to get their participation in the program, he added.