C-PACE moves closer to reality in NH

By Laura Richardson

With Governor Maggie Hassan’s signature on New Hampshire’s House Bill 205, the Jordan Institute is preparing to launch what will soon become a statewide program to provide attractive financing for energy-efficiency and renewable-energy (EE/RE) projects in existing privately owned commercial buildings.

C-PACE, short for Property Assessed Clean Energy financing for Commercial buildings, addresses numerous obstacles that have made comprehensive EE/RE projects rare historically, especially in New Hampshire.

HB 205 originally sought to prohibit for-profit entities from participating in the program because of NH Constitutional concerns – municipalities providing loans to for-profit entities is counter to the intent of Article 5, Section 2 of the Constitution. Many C-PACE programs across the country provide financing through municipal bonds, taxpayer funds, or line items on energy bills. The NH C-PACE program is being designed to only use private investment, no public funds. That said, it is understood that publicly funded rebates and incentives will be very important to reduce capital costs for most C-PACE projects. With common ground found, interested parties rewrote the statute to eliminate the authority for NH’s municipalities to provide project financing. This step was warmly received by legislators and passed both the NH House and NH Senate by voice votes and without any audible objections. Such unanimity is rare in these bodies and bodes well for rolling out the program.

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After signing HB 205, Governor Maggie Hassan stated, “As we work to reduce energy costs and build a more affordable, reliable and innovative energy future, we know that a successful long-term strategy must include stepping up our energy efficiency efforts and supporting small-scale clean energy projects. New Hampshire’s PACE program has the potential to boost local energy efficiency and clean energy efforts that are critical to reducing energy costs for municipalities, businesses and homeowners, and protecting our natural resources. House Bill 205 will make it easier for our municipalities to secure private financing for projects through this program. I thank Representative Carol McGuire, legislators from both parties and advocates from the Jordan Institute for their support of this bipartisan legislation, and I am proud to sign it into law.”

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Municipalities that adopt the statute, RSA 53-F, create special assessment districts where commercial building owners can tie the EE/RE project financing to the property as a special assessment lien. This single step allows for numerous benefits including:

• repayment terms up to 30 years.

• non-accelerating payments at time of property sale.

• in some cases, it can be off balance sheet.

New Hampshire’s C-PACE program requires certain quality-control standards to ensure that the energy savings from the project are more than the repayment, meaning that building owners will have better buildings and improved cash flow.

• An energy audit before the project starts will determine historic baseline energy use, appropriate energy projects, and the anticipated savings-to-investment ratio.

• Building commissioning during the project will ensure that measures are installed correctly.

• Energy use monitoring and verification after the project is completed will prove out that the project performs as designed.

These steps provide comfort to building owners and investors and will raise the bar on performance outcomes by the EE/RE contractor community.

Jordan Institute is working with selected cities to adopt the program in 2015 with the plan of having template language available this fall for Town-Meeting towns to consider adopting next March. By 2017, Jordan Institute expects the program to be available widely. Building owners, EE/RE contractors, and municipal officials interested in participating in this program should contact the Jordan Institute.

Jordan Institute is partnering on NH C-PACE with Sustainable Real Estate Solutions, the NH Community Development Finance Authority, and Resilient Buildings Group. For more information about the New Hampshire C-PACE Program, go to www.jordaninstitute.org.

Laura Richardson is executive director of the Jordan Institute.