Finance Authority Attends 2024 PACENATION Summit

For the last 15 years in Ohio, Commercial Property Assessed Clean Energy (C-PACE) financing has been available to commercial property owners looking to incorporate energy efficient improvements and/or renewable energy elements into their buildings.  

The financing mechanism utilizes a property assessment (similar to a tax assessment) as the source of repayment.  The program provides unique benefits to the owner, including:

  • Potential for 100% financing
  • Fixed interest rate
  • Potential for immediate positive cash flow as energy savings pays for the debt
  • Improvement to balance sheet as financing shifts from debt to an assessment
  • Potential to pass on assessment cost to tenants 

 The Columbus-Franklin County Finance Authority was the first lender to offer C-PACE in Central Ohio with the first project financed in 2016.  We continue to be the only public financing agency offering the product. “Since that time, the private market for C-PACE financing has expanded and Ohio is now the nation’s second largest market based on information shared at the recent PaceNation conference,” says CFFA Vice President Rose Roman. According to PACENation, an association supporting the PACE movement, total investment in C-PACE exceeded $7 billion nationally through the end of 2023. Ohio’s share of that figure is $761 million. To remain current on C-PACE lending practices, CFFA staff attended the recent PACENation Summit hosted in Nashville, Tennessee.

PACE financing has increased dramatically over the last seven years. It is a smart option for commercial (and more recently, residential) property owners to finance energy-efficiency improvements. 

Conference speakers shared that currently 30 states have active C-PACE programs. Florida and California, also offer a residential version of the program. Many communities have expanded their PACE program eligibility to include investments leading to resiliency. PACER enables community resiliency by financing investments addressing many areas of community concern including: seismic, lead, asbestos, flood resistance, drought, severe weather, wildfire, septic to sewer conversions, seawalls, weight of snow on structures, wind resistant hard siding, doors and roofing.

HUD – PACE Lender Consent

PACE financing requires lender consent if there are multiple lenders on the property. In 2017, the U.S. Department of Housing and Urban Development (HUD) acknowledged the benefits of C-PACE by issuing a notice whereby multifamily HUD-financed properties could qualify for C-PACE financing. Since the issuance, a few multifamily projects in the USA have used the tool. “One of the primary obstacles in the Central Ohio market is the lack of an Ohio Attorney General’s opinion letter, which is required by HUD,” says Roman. “According to conference speakers, the related Ohio legislation identifies a county or township prosecuting attorney as the only individual able to request such an opinion letter.”  Absent this opinion, Ohio HUD projects may be missing out on tapping C-PACE financing as part of the capital stack.

As a first step to securing an Ohio AG opinion letter,  it is necessary for a HUD property owner with a C-PACE financing request to come forward. HUD and C-PACE financing work well for existing buildings in need of HVAC and other improvements that result in increased energy efficiency. As administrator for the Columbus Regional Energy Special Improvement District overseeing C-PACE, CFFA is actively seeking owners of HUD financed multifamily properties interested in learning more about C-PACE.  A link to the 2017 HUD notice can be found here.

 What Can C-PACE Finance?
Here are a few of the qualified improvements that may be undertaken:

Heating and Cooling                 

                  High Efficiency HVAC

                  Building Envelope – including “Cool Roofs” and energy efficient windows

                  Steam Systems – Heat and Industrial Usage – Boilers

                  Compressed Air

                  Refrigeration Systems

                  Solar Hot Water Systems

                  Ground Source Heat Pumps – Geothermal HVAC

                  District Heating and Cooling Systems

 Electricity Improvements

                  LED Lighting

                  Energy Management Systems and Controls – including metering

Energy Distribution Technologies

                  Waste Energy Recovery:  Power Generation, Absorption Chillers, Process Reviews

                  Fuel Cells

                  Renewable Power Generation:  Methane Gas, Biomass, Wind, Solar PV

                  Combined Heat and Power Systems – Microturbines – Cogeneration

                  Electrical Distribution – Power Factor Correction, Transformer Replacement

                  Water Conservation Measures or Reduced Flow – (must be able to calculate accompanying energy savings)

 To learn more please contact Matt Lima, Columbus-Franklin County Finance Authority

  [email protected] / (614) 721-3854