C-PACE comes to Rhode Island: An easier way for you and your tenants to go solar - by Michael Cucchiara

Michael Cucchiara, Nexamp

Increasing your property’s value with renewable energy has always been appealing, though not always economically compelling. Onsite solar projects can provide reliable and significant electricity cost savings. Especially in Rhode Island, where electricity rates are among the highest in the country, properties with solar installations can differentiate themselves - and even draw a premium - for progressive tenants drawn by industrial expansion and economic growth. However, typical financing structures can severely limit the potential for these projects to become a reality for middle market commercial and industrial property owners.

However, a new option is quickly gaining popularity in the Ocean State: Commercial Property Assessed Clean Energy (C-PACE). C-PACE allows property owners to finance a solar project through voluntary charges on their property tax bill over the life the project. Following major successes in California and Connecticut, C-PACE legislation has been enacted in Rhode Island and 31 other states to help owners bring their properties into the new energy economy.

What’s different about C-PACE?

Because C-PACE funds are tied to property taxes, the program offers property owners a low-cost, long-term, and transferable financing option to breathe life into their investment goals. Generally, C-PACE loans are non-recourse, do not accelerate, and their interest payments are tax-deductible. C-PACE represents a streamlined way to go solar that matches property owners with pre-approved contractors and competitive lending options.

C-PACE commitments are repaid through on-bill property tax assessments, meaning that direct asset ownership has become a real option for businesses that previously had to rely on third parties to finance their solar projects.

In short, C-PACE expands access to the benefits of solar to thousands of small and medium-sized businesses and property owners who otherwise may not have the operating history or balance sheet to attract affordable financing for their own solar projects.

Who’s eligible?

C-PACE applies to all typical commercial buildings, such as office, retail, hotel, industrial, multifamily residential units, as well as non-profits.

How can I participate?

Building owners interested in how much they could save through an on-site solar project should seek out RI C-PACE approved contractors like Nexamp. Once your roof is evaluated, a contractor will put together a preliminary project design and production estimates, which are presented to program administrators for technical review and initial screening. To the extent there are any pre-existing liens on the property, program administrators will also work with the owner’s mortgage company to seek approvals for tax assessment and support project underwriting.

With a stable of fully-vetted contractors and an additional level of third-party evaluation built into the process, property managers can rest assured that each C-PACE installation will be a sound investment.

What type of work is included on a solar project?

In addition to the design and installation of a solar project, owners of older buildings will often need to complete engineering studies, and may need to perform either roof replacement or structural upgrades to support a system on their roofs.

Owners should also consider maintenance contracts to ensure optimal system performance. Under C-PACE, these additional costs are all eligible under project financing.

With financing options designed specifically for commercial property owners, the time has never been better to navigate the process with the expertise of an involved program administrator and state-approved contractor.

As an experienced and fully-integrated solar company working in the Northeast’s largest solar markets, Nexamp sees C-PACE as a great opportunity for the Ocean State’s small and mid-sized businesses to finally access the electricity cost savings that top national firms have been enjoying from solar.

Michael Cucchiara is a project developer with Nexamp, with offices in Providence, Boston, Haverhill, Mass. and Tarrytown, N.Y.