On October 3, 2016, Solar Energy International presented the next step in their economic revitalization vision to the Delta County Commissioners: Colorado C-PACE. PACE, which stands for Property Assessed Clean Energy, is an innovative financing model that enables building owners to fund 100% of the cost of energy efficiency, renewable energy, and water conservation improvements. Owners repay the cost of eligible improvements through an assessment on their property tax bills. The Governor’s Colorado Energy Office launched Colorado’s commercial PACE program, Colorado C-PACE in December 2015. Colorado C-PACE funding can help commercial properties pay not only for clean energy but also new heating and cooling systems, lighting improvements, water pumps, insulation and other building improvements.
Owners repay the cost of eligible improvements over a period of up to 20 years through an additional charge (“assessment”) on their property tax bill. The resulting energy savings typically outweigh the annual assessment payment, thereby enabling cash flow positive projects. Because the assessment is tied to the property, the repayment obligation automatically transfer to the next owner if the property is sold. PACE financing provides property owners a number of other benefits including: 100% financing, no out-of-pocket expense, long term loan (up to 20 years), lower energy costs, cash flow positive projects, no personal guarantees, competitive rates and terms, and the owner retains all tax incentives.
Following its launch in December of 2015, Colorado C-PACE has seen five counties pass resolutions to participate in the program thereby enabling commercial property owners in their jurisdictions the opportunity to pursue PACE financing. The five counties participating in the program to date are: Adams, Arapahoe, Boulder, Broomfield, and Eagle. Eight additional counties are currently considering to opt-in to the program and are expected to opt into the program by the end of the calendar year 2016.
Colorado C-PACE offers exciting business and economic opportunities to local partners involved in PACE projects. For example, counties who have opted into the program will see an increase in property value and conditions among participating buildings located in their jurisdictions. On the lending side, the open finance model of the program allows lenders, including local and regional banks, the opportunity to expand their lending services by securely investing in energy and water improvement projects. Finally, the local contractor and developer community can utilize PACE to generate additional projects, thus creating jobs and stimulating economic development.
C-PACE is a substantial economic development tool that spurs capital investment in all types of commercial real estate. It can have a catalytic impact across multiple sectors stimulating opportunity for contractors, engineers, and design firms. Approximately 19% of Colorado’s energy is consumed by commercial buildings.
“Opting-in to C-PACE in Delta County opens the opportunity to increase businesses’ property value, save substantial money on their energy bills, while generating large local investments, both in our tax base and our infrastructure” stated DCED board member and local business owner, Tom Huerkamp. The trickle down effect of C-PACE may include increased hiring of roofers, plumbers, and general contractors to keep up with project demand.
The Board of County Commissioners requested more information before making a decision. SEI is gathering information to respond to those questions.