C-PACE is the acronym for Commercial Property Assessed Clean Energy. C-PACE programs provide private financing for commercial property owners to upgrade buildings with energy, resiliency, and environmental remediation improvements. As their website explains, C-PACE legislation authorizes counties to work with private capital providers to provide upfront financing to commercial property owners for qualifying improvement projects, and to collect the repayment through annual or semi-annual surcharges on the property’s tax bill.
C-PACE is advantageous to the property owner because there are no upfront costs: C-PACE pays 100% of any qualifying improvement projects, and the cost is repaid by a tax bill surcharge stretched out over a 20-year period. As C-PACE’s website explains, “By lowering a property’s energy and operational expenses and potentially making buildings safer and healthier, C-PACE makes an asset more inviting to tenants. After the cost of the improvements are paid off through the C-PACE loan, building owners retain the improvements. Assets that use C-PACE achieve higher valuations through better tenant retention and retained ownership of improvements (like solar and upgraded HVAC systems).”
In order to use C-PACE, jurisdictions must adopt enabling legislation through an ordinance that adheres to the principles established by state legislation. Jurisdictions must also sign a Locality Agreement with the Maryland Clean Energy Center.The MD Clean Energy Center (MCEC) oversees MD-PACE, which is the statewide C-PACE program. As of the printing of this article, five counties have not adopted the program yet, and those are Calvert, St. Mary’s, Caroline, Somerset and Worcester counties.
Eligible improvement projects include: energy efficiency such as HVAC and lighting; water efficiency such as replacement of bathroom fixtures, icemakers, and dishwashers; renewable energy such as solar; resiliency such as green roofs or electric vehicle charging stations; and, environmental remediation such as asbestos or mold remediation.
More information on the C-PACE program can be found on their website at https://md-pace.com.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
