The Manufacturing Law Blog provides timely commentary on issues of importance to manufacturers and distributors. Contributors from the law firm of Robinson & Cole LLP are corporate compliance and litigation attorney, Jeff White; environmental, health and safety attorney, Pam Elkow; and labor and employment attorney, Nicole Bernabo
While this blog focuses on manufacturers, many of you are also building owners. Interested in affordable capital for energy upgrades? There really is a deal for you….
Property owners know that they can save money over the long run by upgrading their electrical or HVAC systems to more efficient systems or systems that use renewable energy. But the catch has been the time it can take to recoup your investment.
Connecticut has now joined other states, including New York (but not Massashusetts, yet) in adopting an innovative financing tool that allows owners to pay for the costs of energy improvements through their property tax bill, spreading the costs out over time and tying the costs to the property, allowing future owners to be part of the solution.
- Adopted by legislation in 2012, C-PACE is administered by the Clean Energy Finance and Investment Authority (CEFIA) (replacing the Connecticut Clean Energy Fund) as part of the state’s Energize Connecticut initiative, which helps ratepayers lower costs and use clean energy.
- C-PACE gives building owners to access capital they can use to finance energy improvements – either renewable or energy efficient. The new idea is that rather than borrowing the money from a bank or, worse, fronting the funds, the property owner places a voluntary assessment on the property tax bill. There is no down-payment or other upfront payment, and the property owner pays over time through the additional charge. Because it’s a tax assessment, repayment obligation transfers automatically to the next owner if the property is sold.
- To qualify, the upgrades lower the energy consumption of the building or enable the building to produce clean energy. Examples: high efficiency lighting, HVAC upgrades, high efficiency chillers, boilers, furnaces, and water heating systems, and renewable energy systems such as solar or fuel cells.
New York – The Energize New York Benefit Finance Program
- Also a PACE program, the New York version is run by the Energy Improvement Corporation (EIC), a local development corporation and a New York State nonprofit.
- Similar to the Connecticut program, the property owner pays for the energy Improvements by authorizing the municipality where the property is located to add a special assessment to the property.
- The New York PACE program is available to owners of both commercial and multi-family properties.