Concentration of CO2 in the Atmosphere

Commercial-PACE financing moves forward in New Hampshire

By Laura Richardson

Commercial building owners in New Hampshire will soon have access to a financing tool that will help them significantly improve their bottom line through making energy-efficiency upgrades or installing 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 building owners to finance energy efficiency or renewable energy projects, repaying their loans through property tax assessments, similar to water, sewer, or sidewalk special assessments.

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, 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 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.

New Hampshire’s 2014 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 532, relating to energy efficiency and clean energy districts, will provide a much-needed tool for businesses to invest in energy efficiency and renewable energy projects.

Municipalities currently 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 adoption and implementation 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 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 which cannot be capitalized through their general fund.

C-PACE financing is completely voluntary. Municipalities or their 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 meet 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. Multifamily buildings of four or more housing units can participate. Publicly owned buildings and residential buildings of fewer 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. 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
  • Air sealing and insulation – walls, basements, crawlspaces, attics, roofs
  • Combined heat and power

Recognizing that many municipalities are stretched thin in terms of staffing capacity, HB532 allows municipalities to designate another entity to administer the C-PACE program. The Jordan Institute will lead this effort, thus significantly reducing the challenges of tying together financing, energy-project vetting, project management, and administration. Learn more at,

Laura Richardson is the Executive Director of the Jordan Institute.

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