From the New Hampshire Business Review
New program backs commercial building energy projects
C-PACE offers innovative financing tool
By NHBR Staff
The Jordan Institute, a Concord-based non-profit organization focused on promoting energy-efficiency and renewable energy projects, is teaming with Trumbull, Conn.-based Sustainable Real Estate Solutions, to develop and administer New Hampshire’s new Property Assessed Clean Energy for Commercial program, or C-PACE, which is expected to be launched in 2015.
According to Laura Richardson, executive director of The Jordan Institute, C-PACE financing is an innovative tool that, similar to a sewer assessment, connects loan repayments for energy-efficiency and renewable energy projects to the commercial building, and not the building’s owner.
She said it is an entirely voluntary opt-in program for municipalities, capital providers, contractors, existing mortgage holders and building owners. In fact, before the financing can be accessed, municipalities must adopt the program prior first.
Through the NH C-PACE program, Jordan Institute and SRS will connect municipalities, capital providers, commercial building owners, architects, engineers, builders, contractors and installers via a streamlined process to provide financing for “well-designed” projects, Richardson said.
A “well-designed” project is defined as having projected energy cost savings exceeding the cost to install the measures and repay the private capital loan.
“C-PACE provides unique benefits that other loan products currently do not or cannot provide,” said Richardson. “These include longer financing terms, non-accelerating payoff at time of property sale and off-balance sheet accounting. By statute, C-PACE requires certain quality standards which will ensure that the project makes sense and is cash flow-positive, in other words, where the energy savings outweigh the loan repayment obligation.”
She added that SRS was chosen to partner in the New Hampshire C-PACE program because of the success it has had in Connecticut, where the firm developed a streamlined and transparent process “widely acknowledged as the most effective program nationally.”
The Jordan Institute is seeking private donations to support the launch of NH C-PACE, which receives no public money. Richardson said the goal is for the program to become totally self-supporting by 2016.
For more information, visit jordaninstitute.org.
This article appears in the October 31 2014 issue of New Hampshire Business Review
Did you like what you read here? Subscribe to New Hampshire Business Review»
According to Laura Richardson, executive director of The Jordan Institute, C-PACE financing is an innovative tool that, similar to a sewer assessment, connects loan repayments for energy-efficiency and renewable energy projects to the commercial building, and not the building’s owner.
She said it is an entirely voluntary opt-in program for municipalities, capital providers, contractors, existing mortgage holders and building owners. In fact, before the financing can be accessed, municipalities must adopt the program prior first.
Through the NH C-PACE program, Jordan Institute and SRS will connect municipalities, capital providers, commercial building owners, architects, engineers, builders, contractors and installers via a streamlined process to provide financing for “well-designed” projects, Richardson said.
A “well-designed” project is defined as having projected energy cost savings exceeding the cost to install the measures and repay the private capital loan.
“C-PACE provides unique benefits that other loan products currently do not or cannot provide,” said Richardson. “These include longer financing terms, non-accelerating payoff at time of property sale and off-balance sheet accounting. By statute, C-PACE requires certain quality standards which will ensure that the project makes sense and is cash flow-positive, in other words, where the energy savings outweigh the loan repayment obligation.”
She added that SRS was chosen to partner in the New Hampshire C-PACE program because of the success it has had in Connecticut, where the firm developed a streamlined and transparent process “widely acknowledged as the most effective program nationally.”
The Jordan Institute is seeking private donations to support the launch of NH C-PACE, which receives no public money. Richardson said the goal is for the program to become totally self-supporting by 2016.
For more information, visit jordaninstitute.org.
This article appears in the October 31 2014 issue of New Hampshire Business Review
Did you like what you read here? Subscribe to New Hampshire Business Review»
Jordan Institute - Resilient Buildings Group 2nd Annual Fall Networking Party and Fundraiser LOUD Party - Silent Auction October 22, 2014 - 3pm - 7 pm 6 Dixon Avenue, Concord, NH 03301 $10 covers the food and fun, all proceeds benefit The Jordan Institute and the launch of C-PACE Space is limited -- Register with Prudy at 603-226-1009, x210 or pveysey at jordaninstitute.org | Hourly Raffles Silent Auction Light Appetizers and Libations |
C-PACE News
Town and City Magazine: from the NH Municipal Association
Commercial-PACE Financing Moves forward in New Hampshire
September/October 2014
By Laura Richardson
New Hampshire’s legislature overwhelmingly supported improvements to existing but ineffective enabling legislation originally passed in 2010, and in statute under RSA 53-F. Many believe that House Bill (HB) 532, relative to energy efficiency and clean energy districts, will provide a much-needed tool for businesses to invest in energy efficiency and renewable energy projects.
Called C-PACE financing, for Property Assessed Clean Energy in Commercial Buildings, this enabling legislation allows municipalities to create PACE districts and for building owners to finance energy efficiency and/or renewable energy projects, repaying their loans through property tax assessments, similar to water, sewer, or sidewalk special assessments.
Municipalities currently have various other tools to woo and support businesses within their districts, recognizing that occupied buildings provide strong tax and employment bases, which provide public benefits in numerous ways. Additionally, RSA-53:F states that PACE is found “To achieve the public benefits of protecting the economic and social well-being by reducing energy costs in the community and risks to the community associated with future escalation in energy prices, and addressing the threat of global climate change … that the energy conservation and efficiency and clean energy improvements … will serve the public purposes as set forth in this chapter and not primarily be for the benefit of private persons or uses even though such private benefits and uses may incidentally result…”
Unlike traditional bank loans, C-PACE financing is tied to the commercial building, not the building owner. Loans are paid back through the conduit of a municipal tax assessment and over a long-enough period of time so that the projects are cash positive – where the energy savings are greater than the loan payment. Moreover, there is no up-front fee or down payment and loans do not accelerate at the time of ownership change or default. This allows the building owner to pay for the energy efficiency that they “use” and subsequent owners pay for those savings until the loan is fully paid.
Lien position is negotiated between municipality and lender to determine best comfort level for each project. Municipalities that adopt PACE typically receive a fee to cover their administrative costs. Projects that are financed by private entities and are in first lien position have no cap on the dollar-size of the project. Those projects financed through municipalities are capped at 35% of the assessed value of the building and property plus any existing mortgages, or $1,000,000, whichever is greater. Additionally, municipalities that self-fund projects must have a loan-loss reserve that is not capitalized through their general fund.
C-PACE financing is completely voluntary. Municipalities/voters choose to designate the district and adopt the tool, and municipal officials can nix a project; lenders determine if projects are viable and worthy of investment; building owners decide if C-PACE and the project meets their needs. If all three of these groups conclude that there is a win-win-win fit, the project may proceed.
This financing tool is available for office buildings, hotels and convention centers, manufacturing facilities, small retail, malls, and big box stores, heated warehouses, historic buildings, health clubs and athletic facilities, agricultural buildings, restaurants, as well as buildings owned by non-profit organizations. Multi-family buildings of four or more units can participate. Publicly-owned buildings and residential buildings of less than four units are not included.
Energy projects must demonstrate an energy-cost savings-to-investment ratio of greater than one as determined by an independent third party through an energy audit which includes energy and financial modeling. Projects should also include building commissioning and energy monitoring and verification to assure the lender that the financed project performs as designed. C-PACE projects can include:
The Jordan Institute, a New Hampshire based non-profit organization that focuses on improving the energy efficiency in buildings, has been the lead voice on C-PACE and is developing a statewide C-PACE program without public funds or a “green bank”. Jordan Institute and its program partners will streamline this process, deploy best-practice standards and protocols, and bring together the necessary teams to develop and launch a sustainable program in the coming months.
Pioneer C-PACE projects in the statewide program are expected to launch in late 2014 and early 2015, with a significant scale-up of projects anticipated in 2015 and 2016. Municipalities and others can learn more at www.jordaninstitute.org.
Laura Richardson is the Executive Director of the Jordan Institute.
By Laura Richardson
New Hampshire’s legislature overwhelmingly supported improvements to existing but ineffective enabling legislation originally passed in 2010, and in statute under RSA 53-F. Many believe that House Bill (HB) 532, relative to energy efficiency and clean energy districts, will provide a much-needed tool for businesses to invest in energy efficiency and renewable energy projects.
Called C-PACE financing, for Property Assessed Clean Energy in Commercial Buildings, this enabling legislation allows municipalities to create PACE districts and for building owners to finance energy efficiency and/or renewable energy projects, repaying their loans through property tax assessments, similar to water, sewer, or sidewalk special assessments.
Municipalities currently have various other tools to woo and support businesses within their districts, recognizing that occupied buildings provide strong tax and employment bases, which provide public benefits in numerous ways. Additionally, RSA-53:F states that PACE is found “To achieve the public benefits of protecting the economic and social well-being by reducing energy costs in the community and risks to the community associated with future escalation in energy prices, and addressing the threat of global climate change … that the energy conservation and efficiency and clean energy improvements … will serve the public purposes as set forth in this chapter and not primarily be for the benefit of private persons or uses even though such private benefits and uses may incidentally result…”
Unlike traditional bank loans, C-PACE financing is tied to the commercial building, not the building owner. Loans are paid back through the conduit of a municipal tax assessment and over a long-enough period of time so that the projects are cash positive – where the energy savings are greater than the loan payment. Moreover, there is no up-front fee or down payment and loans do not accelerate at the time of ownership change or default. This allows the building owner to pay for the energy efficiency that they “use” and subsequent owners pay for those savings until the loan is fully paid.
Lien position is negotiated between municipality and lender to determine best comfort level for each project. Municipalities that adopt PACE typically receive a fee to cover their administrative costs. Projects that are financed by private entities and are in first lien position have no cap on the dollar-size of the project. Those projects financed through municipalities are capped at 35% of the assessed value of the building and property plus any existing mortgages, or $1,000,000, whichever is greater. Additionally, municipalities that self-fund projects must have a loan-loss reserve that is not capitalized through their general fund.
C-PACE financing is completely voluntary. Municipalities/voters choose to designate the district and adopt the tool, and municipal officials can nix a project; lenders determine if projects are viable and worthy of investment; building owners decide if C-PACE and the project meets their needs. If all three of these groups conclude that there is a win-win-win fit, the project may proceed.
This financing tool is available for office buildings, hotels and convention centers, manufacturing facilities, small retail, malls, and big box stores, heated warehouses, historic buildings, health clubs and athletic facilities, agricultural buildings, restaurants, as well as buildings owned by non-profit organizations. Multi-family buildings of four or more units can participate. Publicly-owned buildings and residential buildings of less than four units are not included.
Energy projects must demonstrate an energy-cost savings-to-investment ratio of greater than one as determined by an independent third party through an energy audit which includes energy and financial modeling. Projects should also include building commissioning and energy monitoring and verification to assure the lender that the financed project performs as designed. C-PACE projects can include:
- Heating, Ventilation, Air-conditioning (HVAC) Systems
- Controls and heat distribution
- Lighting
- Solar – photovoltaic, hot water, hot air
- Biomass heating – pellets or chips
- Airsealing and Insulation – walls, basements, crawlspaces, attics, roofs
- Combined heat and power
The Jordan Institute, a New Hampshire based non-profit organization that focuses on improving the energy efficiency in buildings, has been the lead voice on C-PACE and is developing a statewide C-PACE program without public funds or a “green bank”. Jordan Institute and its program partners will streamline this process, deploy best-practice standards and protocols, and bring together the necessary teams to develop and launch a sustainable program in the coming months.
Pioneer C-PACE projects in the statewide program are expected to launch in late 2014 and early 2015, with a significant scale-up of projects anticipated in 2015 and 2016. Municipalities and others can learn more at www.jordaninstitute.org.
Laura Richardson is the Executive Director of the Jordan Institute.
Commercial-PACE Financing Moves Forward in New Hampshire
Published in the NH Retailers Association Newsletter, August 25, 2014
Commercial building owners in New Hampshire will soon have access to a financing tool that will help them improve their bottom line through making energy-efficiency upgrades and/or installing renewable-energy (EE/RE) projects.
Called C-PACE financing, for Property Assessed Clean Energy in Commercial Buildings, this enabling legislation allows municipalities to create special assessment districts and for building owners to finance EE/RE projects, repaying their loans through property tax assessments, similar to water, sewer or sidewalk special assessments. New Hampshire’s 2014 legislature supported improvements to existing but ineffective enabling legislation originally passed in 2010, and in statute under RSA 53-F.
The Jordan Institute has been the lead voice on C-PACE and is developing a statewide C-PACE program without public funds, ratepayer funds or a green bank. Jordan Institute and its program partners will streamline this process, deploy best-practice standards and protocols, and bring together the necessary teams to develop and launch a sustainable program.
Currently, municipalities have various tools to woo and support businesses within their districts, recognizing that occupied buildings provide strong tax and employment bases, which provide public benefits in numerous ways. Furthermore, statute recognizes the potential impact to energy and greenhouse gas reductions that will come from the widespread use of C-PACE.
Unlike traditional bank loans, C-PACE financing is tied to the commercial building, not the building owner. Loans are paid back through municipal tax assessments and over a long-enough period of time so that the projects are cash positive – where the energy savings are greater than the loan payment. Moreover, there is no up-front fee or down payment and loans do not accelerate at the time of ownership change or default. This allows the building owner to pay for the energy efficiency that they use and subsequent owners pay for those savings until the loan is fully paid.
C-PACE financing is completely voluntary. Municipalities/voters choose to designate the district and adopt the tool, and municipal officials can nix a project; lenders determine if projects are viable and worthy of investment; building owners decide if C-PACE and the project meets their needs. If all three of these groups conclude that there is a win-win-win fit, the project may proceed.
This financing tool is available for office buildings, hotels and convention centers, manufacturing facilities, small retail, malls, and big box stores, heated warehouses, historic buildings, health clubs and athletic facilities, agricultural buildings, restaurants, as well as buildings owned by non-profit organizations. Publicly owned buildings and residential buildings of less than four units are not included.
For more information on C-PACE, please contact Laura Richardson, Executive Director of the Jordan Institute.
Commercial building owners in New Hampshire will soon have access to a financing tool that will help them improve their bottom line through making energy-efficiency upgrades and/or installing renewable-energy (EE/RE) projects.
Called C-PACE financing, for Property Assessed Clean Energy in Commercial Buildings, this enabling legislation allows municipalities to create special assessment districts and for building owners to finance EE/RE projects, repaying their loans through property tax assessments, similar to water, sewer or sidewalk special assessments. New Hampshire’s 2014 legislature supported improvements to existing but ineffective enabling legislation originally passed in 2010, and in statute under RSA 53-F.
The Jordan Institute has been the lead voice on C-PACE and is developing a statewide C-PACE program without public funds, ratepayer funds or a green bank. Jordan Institute and its program partners will streamline this process, deploy best-practice standards and protocols, and bring together the necessary teams to develop and launch a sustainable program.
Currently, municipalities have various tools to woo and support businesses within their districts, recognizing that occupied buildings provide strong tax and employment bases, which provide public benefits in numerous ways. Furthermore, statute recognizes the potential impact to energy and greenhouse gas reductions that will come from the widespread use of C-PACE.
Unlike traditional bank loans, C-PACE financing is tied to the commercial building, not the building owner. Loans are paid back through municipal tax assessments and over a long-enough period of time so that the projects are cash positive – where the energy savings are greater than the loan payment. Moreover, there is no up-front fee or down payment and loans do not accelerate at the time of ownership change or default. This allows the building owner to pay for the energy efficiency that they use and subsequent owners pay for those savings until the loan is fully paid.
C-PACE financing is completely voluntary. Municipalities/voters choose to designate the district and adopt the tool, and municipal officials can nix a project; lenders determine if projects are viable and worthy of investment; building owners decide if C-PACE and the project meets their needs. If all three of these groups conclude that there is a win-win-win fit, the project may proceed.
This financing tool is available for office buildings, hotels and convention centers, manufacturing facilities, small retail, malls, and big box stores, heated warehouses, historic buildings, health clubs and athletic facilities, agricultural buildings, restaurants, as well as buildings owned by non-profit organizations. Publicly owned buildings and residential buildings of less than four units are not included.
For more information on C-PACE, please contact Laura Richardson, Executive Director of the Jordan Institute.
More C-PACE NewsStronger Energy Efficiency Policy Moves Forward in ConcordJun 4, 2014 by Jeff Fromuth, Conservation Law Foundation Today, our cleanest and cheapest energy resource—energy efficiency—got a big boost in the Granite State. The New Hampshire House and Senate voted to send two important energy efficiency bills, profiled on this blog last month, to Governor Hassan’s desk for final approval. The passage of House Bills 532 and 1129 signals a greater focus on energy efficiency as a cornerstone of the state’s efforts to meet our energy needs while reducing energy bills and carbon pollution. The Governor is expected to sign them into law. Working Toward an Energy Efficiency Resource Standard for NH HB1129 is the latest step forward in a long-running effort to build the case for trimming New Hampshire energy bills by capturing much more energy efficiency savings than we do now. This process is intended to lead to a robust Energy Efficiency Resource Standard, or EERS, a policy that sets cost savings goals for the state to achieve through graduated investment in energy efficiency improvements (investments in goods and services increasing energy savings for the state). The think tank American Council for an Energy Efficient Economy (ACEEE) calls the EERS “a critical policy that lays the foundation for sustained investment in energy efficiency.” The bill directs New Hampshire’s Office of Energy and Planning (OEP) to hold stakeholder meetings with multiple parties in the state (including residential, commercial, and industrial consumers, utilities, state agencies, and financing entities) to create a blueprint for achieving greater cost savings and reductions in emissions through an EERS. Building off of earlier work (including a 2009 study), a 2013 study found that New Hampshire should attain as much as ten times—6.6 percent—its energy efficiency savings in 2012 through an EERS. That study, contracted by the OEP for the purpose of drafting an EERS, concluded that New Hampshire could achieve as much as $2.9 Billion in savings with a graduated investment of $941 Million by 2017. Experience in Massachusetts and other states suggests that even greater savings are feasible. With a strong message from the upcoming HB1129 stakeholder process (and a parallel process underway at the state’s Public Utilities Commission), New Hampshire can move toward a robust and ambitious EERS for enactment in 2015. Catalyzing Private Investment Now In the meantime, a second bill passed today would help remove another significant barrier to private investment in energy efficiency: freeing up capital for business owners interested in retrofitting their properties (installing improved efficiency systems in buildings with no or less effective ones). HB532 strengthens New Hampshire’s 2010 “Property Assessed Clean Energy,” or “PACE” law. The bill ties investments in energy-related projects to the building, not the building owner, through property tax assessments used by municipalities. This eliminates the need for loan payoff upon sale of the property. According to Professor Michael Mooiman of Franklin Pierce University, HB532 (known as C-PACE for “commercial” PACE) helps resolves the Federal Housing Finance Authority’s unfortunate concerns with PACE laws (regarding lenders’ ability to recover capital in the event of foreclosure) by focusing on the commercial sector—over which FHFA has no jurisdiction. HB532 also ups the current $60,000 dollar cap on project size to $1 million or 35% of the property’s value, whichever is greater, which according to the Jordan Institute allows much more significant projects where “the C-PACE participant, the lender, and the town to determine the appropriate amount to finance.” As a rule of thumb, larger investments in energy efficiency tend to yield larger returns—as long as those investments are cost-effective. C-PACE improves access to investment capital for New Hampshire’s commercial sector through financial tools such as providing up to 30 year, 100 percent up-front financing, resolving the FHFA’s concerns (removing the program’s main obstacle), eliminating the need for a loan payment upon sale of the property, and keeping the cost with the business owners instead of tax payers. It is also completely voluntary. Finally, C-PACE ties the energy efficiency lien to the commercial property, relieving owners of paying off the loan if they decide to sell the property. As I argued in my last post, New Hampshire can and should do more to scale up energy efficiency. CLF celebrates the passage of these bills as strong milestones toward this goal. There now appears to be growing momentum to make the policy changes necessary, including within state government and the utility sector. New Hampshire is well positioned to take the golden opportunities presented by the new legislation and other burgeoning efforts to reduce energy bills and meet our energy needs as cheaply and cleanly as possible. Jeff Fromuth is an intern in CLF’s New Hampshire office. | C-PACE EventsC-PACE Launch Party
The Jordan Institute is preparing to launch an innovative financing program for energy efficiency and renewable energy projects in privately owned commercial buildings. Called C-PACE for Commercial-Property Assessed Clean Energy financing, this program will tie private investment – banks, institutions, individuals – to privately owned commercial buildings through the municipal tax assessment process. Unlike other states and jurisdictions that are running C-PACE programs, New Hampshire’s statewide program will be launched without public dollars – no tax dollars, no ratepayer dollars, no State dollars. We are actively seeking donations from individuals, businesses, and foundations to offset the costs of program design and launch. Please support our work to build a program that can have very far-reaching benefits. USGBC, NH Chapter, Green Eggs Presentation - July 7, 2014 July Green Eggs: Scaling Up EE and RE with C-PACE July 9, 2014, 7:30 AM Community Development Finance Authority, 14 Dixon Ave, Concord, NH 03301 Commercial buildings in NH face many hurdles in order to stay profitable, and energy costs can be a budget killer. C-PACE financing is an innovative model for energy efficiency and renewable energy projects in commercial buildings. This model connects private investment with privately owned existing commercial buildings where the loan is paid back through a municipal tax assessment and is tied to the building, not the building owner. Loan terms can be longer, allowing for energy savings to be greater than loan payments, meaning that energy projects can be cash positive from Day One. Enabling legislation for this innovative financing tool has been a quiet focus of NH’s house and senate this session and was adopted on June 6. Come learn how the model works and provide some early input about the development of a statewide C-PACE program. |