A feasible funding strategy that hotels can now access

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By Rob Holdsworth

The Commercial Property Assessed Clean Energy, or C-PACE, program is a unique public-private funding program designed to help commercial, industrial, nonprofit, multi-family and agricultural property owners and property developers fund large-scale energy efficiency and renewable energy projects.

How does C-PACE work?
A home owner borrows money from a private lender to pay for a large energy efficiency project and pays back the loan with a portion of the project savings. The repayment will be in the form of a provisional assessment fee that will be added to your property tax bill. Several types of energy saving measures can be included in a C-PACE project, such as LED lighting, solar systems, HVAC equipment, smart thermostats, building envelope solutions and more.

How is C-PACE different from other funding options?

  • 100% of the project’s hard and soft costs are funded upfront through the loan, which means that building owners can see savings from day one with no capital investment on all C-PACE projects.
  • C-PACE loans have a term for the nominal life of the installed equipment (often more than 20 years), so project costs can be spread over a longer period of time compared to a traditional loan.
  • When real estate is sold, the tax assessment automatically passes to the new owner so that the original borrower does not have to repay the loan before the sale.

Does your hotel qualify for C-PACE?
C-PACE is open to owners of new / existing commercial, industrial, community, multi-family, and agricultural real estate in states with an active program (Pennsylvania, Delaware, New York, Rhode Island, Connecticut, Maryland, Ohio, Virginia, Massachusetts and other ).

C-PACE is designed for larger projects from one million US dollars. It provides an incentive for hotel owners to make large green investments with longer term paybacks as the longer funding term of a C-PACE loan, often 20 years or more, generates sustained positive cash flow for the owner.

C-PACE is a valuable tool for hotels that want to take over or improve the health of their buildings. The program mitigates risk for business owners while providing the capital needed for significant Mother Nature and guest-approved upgrades.

C-PACE has grown in popularity in recent years, reaching an annual investment of $ 670 million, up 150% from 2018. According to market data from PACENation, 37 states and the District of Columbia have passed laws enabling C-PACE programs as of 2019. However, only 22 states plus DC have active C-PACE programs in place. Approximately $ 1.5 billion in funding has been provided for more than 2,000 commercial buildings.

To get started on your next C-PACE funded project, contact a local approved contractor who can provide detailed technical and project economic information for a C-PACE funded project.

Rob Holdsworth is the VP of Evolution Energy Partners. His experience spans extensive leadership experience, power engineering, top-level operations management, large project management, and Six Sigma deployment.

This is a contribution to Hotel industry, written by an industry professional. The thoughts expressed are the perspective of the person with the byline.

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