'The Largest C-Pace Transaction Ever Closed'
- Jun 26, 2021 4:06 am GMT
“If you can retrofit a building in New York City, you can do it anywhere,” said Mayor de Blasio. New York City broke records this week with the biggest loan, to date, to fund energy efficiency upgrades. The loan was issued under the C-PACE (Commercial Property Assessed Clean Energy) program, which allows property owners to finance energy efficiency and renewable energy improvements. C-PACE uses borrowed capital to pay for upfront costs and the funds are repaid over time via a voluntary tax assessment. In effect, C-PACE allows retrofits beyond what property owners could do with traditional financing.
The historic $89 million loan will help the owners of 111 Wall Street meet New York carbon emissions targets. It is estimated to save $2.5 million in annual energy costs and avoid $750,000 in annual fines. Mayor de Blasio continued, “Today, I want to send a clear message to all building owners in our five boroughs — you have a critical financial tool to redesign your properties for energy efficiency and sustainability.” In New York, the program is open to any commercial or multifamily buildings with three units or more, including tax-exempt non-profit and religious facilities, health care facilities, and industrial properties, that meet the requirements and eligibility. Mansoor Ghori, CEO of Petros PACE Finance commented, “The fact that the first transaction shattered the record for the largest C-PACE transaction ever closed is proof of the magnitude of the City’s potential for C-PACE, and the wisdom of the Mayor and City’s leadership on climate change.”
Biden’s plan also includes cutting emissions from the building sector by upgrading and retrofitting some 4 million commercial buildings. Work would include replacing heat and cooling systems, new lighting controls and automated systems. Initial costs are estimated at $213 billion. Long-term savings would outweigh the immediate costs but how do you overcome the initial sticker shock? By focusing on the savings and using alternative methods of financing. Over 2,500 commercial projects representing over $2 billion invested have taken advantage of C-PACE financing. Almost 40 states adopted C-PACE in favor of energy efficiency upgrades, an economic boost for businesses and job creation. In harmony with Biden’s plan, Consolidated Edison Inc. (ConEd), one of the largest utilities in the U.S., is investing over $1.7 billion to increase its energy efficiency savings by 2025. The utility will provide clean heating alternatives, support low-and moderate-income communities, and help customers manage their energy use. ConEd CEO Tim Cawley said, “Energy efficiency is the best, first answer and we will triple our investment by 2030.” Private firms also participate in C-PACE as lenders, developers, administrators, contractors, and marketers. Greenworks Lending, a private capital provider dedicated to C-PACE funding has been acquired by Nuveen, the global investment manager of TIAA. “Greenworks is a pioneer in developing and scaling C-PACE as a cost-efficient marketplace solution for property owners and municipalities to pursue energy efficiency solutions for their commercial buildings,” says Jose Minaya, CEO of Nuveen.
Energy efficiency programs are projected to almost double, from approximately 2,445,000MMBTU in 2019 to approximately 4,723,000 MMBTU in 2025 and non-commercial PACE financing has doubled from $800 million in 2020 to $1.5 billion in May 2021. As programs and projects expand, will creative financing, private investors and Biden’s new plan, pave the way for another significant rise in energy efficiency projects? What will it mean for energy conservation and how will your utility participate?
No discussions yet. Start a discussion below.
Get Published - Build a Following
The Energy Central Power Industry Network® is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.
If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.