Five states recently passed Commercial Property Assessed Clean Energy (C-PACE) legislation, adding to the growing list of states that enable C-PACE to be used in commercial property financing. This list of states using C-PACE financing translates to better building stock, increased job creation and an increased focus on climate change. Those states are Georgia, Idaho, Hawaii, New Jersey and New Mexico.
Georgia: Legislation (HB 206) enacted features applying to local development authority. Eligible projects include energy efficiency, renewable energy, water conservation and resiliency.
Hawaii: Amendment (HB 2801) enacted which places all program administration with statewide Hawaii Green Infrastructure Authority (HGIA). Eligible projects are septic systems, clean energy technology, efficiency technology, resiliency measures or other improvement approved by HGIA. PACE Equity has applied to be a capital provider. CPA is still completing legal analysis on the passed statute. There is a chance it is not fundable as it has a unique structure not found in other C-PACE statutes. More to follow.
Idaho: Legislation (H 624) allows for new and existing commercial properties to include energy efficiency, renewable energy, water conservation and resiliency (including energy storage and microgrids).
New Jersey: The Garden State C-PACE program is a voluntary financing tool which allows qualifying commercial property owners to access financing for qualifying energy efficiency, renewable energy, water conservation and resiliency improvements. This repayment is similar to a real property tax bill.
UPDATE: 7/17/24 | Approval of the program guidelines by NJEDA board has been delayed until fall. The prevailing wage requirement passed the house and is likely to become law. CPA is working with NJEDA to get carveouts for smaller-sized projects.
New Mexico first enacted C-PACE legislation in 2009, later followed by the Improvement Special Assessment Act enacted in 2023 via HB 228, which authorized counties to impose, administer and disburse special assessments to encourage the development of certain property improvements (C-PACE financing).
UPDATE: 7/17/24 | Bernalillo County and Albuquerque, New Mexico are opted-in and participating in C-PACE financing.
Other States with Legislative Progress
North Carolina: The Senate/House have passed C-PACE. The next step is getting the governor to sign it.
UPDATE: 7/17/24 | Governor Roy Cooper has signed North Carolina’s C-PACE program into law.
New York: At long last, NYSERDA updated guidelines to support new construction in New York City by removing the SIR/CBR for all electric buildings and published an updated CBR methodology to codify/define an incremental cost approach for meeting it. The NYC/NYCEEC program will provide new guidelines in the next several weeks to define what, if any, additional requirements/funding thresholds will be required for New York City. It’s expected to be LTV or TECC guidance for new construction.
This approach to financing has been used on thousands of properties in more than 30 states and the District of Columbia. The Commercial PACE industry is expected to be a $3.4 billion industry in 2024 and continue to expand in the coming years as more states adopt the legislation for this financing option. As C-PACE expands, it continues to solve financing challenges that developers and owners face in new construction development and renovation projects. Particularly in the coming years as Building Performance Standards continue to be a major focus for building owners, more projects will take advantage of the long-term, fixed-rate, non-recourse financing solution that is transferable to future owners when a building is sold.
