A program designed to finance projects to make commercial buildings more energy efficient is growing in Rhode Island, according to a May 5 report by Rhode Island Public Radio.
Thirteen more municipalities are working to participate in the Rhode Island Commercial Property Assessed Clean Energy (C-PACE) program. They would join the 14 other municipalities that have become members active in the program since it launched one year ago, according to the local radio news outlet.
C-PACE enables owners of eligible commercial and industrial buildings to finance up to 100 percent of projects that will advance energy efficiency, renewable energy, water conservation, environmental health, and safety
There are no up-front costs. Financing is provided at competitive rates, with repayment terms consistent with the useful life of the improvements – generally up to 25 years.
Specifically, according to the state of Rhode Island program description, C-PACE financing repayment is facilitated through the municipal property tax assessment process. A voluntary assessment (similar to a sewer district assessment) is placed on the building owner’s property tax bill. The assessment is repaid over the financing term and the annual energy cost savings will, in most cases, exceed the annual assessment payment, thereby enabling capital intensive equipment upgrades.
Michael Baer, senior advisor to the executive director at Rhode Island Infrastructure Bank, which sponsors the program, said C-PACE is beneficial because it adds more jobs to the state’s clean energy sector.
“These are energy efficient contractors; they’re electricians; they’re renewable energy developers, so it’s a local job program,” Baer said.
Baer told Rhode Island Public Radio that the program also helps reduce air pollution and increases cash flow for businesses by lowering their operating costs.
He said that what makes this program different than traditional commercial loans is that financing is secured by a municipal benefit assessment. That assessment allows longer-term financing options that last up to 25 years. Securing long-term financing helps to match the useful life of the building’s improvements. The assessment is also transferable if the owner sells the building.
The average cost of a project in the program is between $500,000 and $1 million; however the actual price depends on the size of the building.
So far, two projects in Middletown have been completed. Baer said about 100 more projects are in process of being financed.