Energize Delaware, administrator for the Commercial Property Assessed Clean Energy Program (D-PACE,) has increased the total eligible construction costs from 20 to 30 percent as a way to ease the impact of increased borrowing costs.
Last year, four financing deals totaling more than $27 million were closed. In addition, there was renewed interest in future projects. Still, increased borrowing costs and other factors, including the 20 percent cap, limited the program.
“Through dialogue with our partners and PACE capital providers, it became clear an increase cap would help with today’s market conditions. In addition, we expect growing interest in our program providing higher energy savings and reduced greenhouse gas emissions through efficiency and renewable energy,” said Executive Director Drew Slater.
D-PACE projects use private capital for financing and make it possible for commercial property owners to obtain low-cost, long-term financing for energy efficiency, water conservation, and renewable energy projects.
The program starts with a state-level government policy that classifies clean energy upgrades as a public benefit – like a new sewer, water line or road. These upgrades can be financed with no money down and then repaid as a benefit assessment on the property tax bill over a term that matches the useful life of improvements and/or new construction infrastructure (typically at 20-30 years).
The assessment transfers on the sale of the property and can be passed through to tenants where appropriate. A release stated that while aiding sustainability efforts, the program reduces property owners’ annual costs and provides dramatically better-than-market financing for green new construction.
A nonprofit, Energize Delaware’s mission is “To inspire sustainable energy solutions for a thriving environment and economy, according to a release. .
Background information on D-PACE is available at www.delawarecpace.org.
