Using C-PACE to Finance Commercial Solar Systems
Financing individual solar energy systems can be daunting, but you may be able to get help from the C-PACE program, a relatively new concept designed to provide commercial enterprises and business interests an alternative funding method. PACE stands for “property assessed clean energy,” and these programs are rapidly becoming a favored method for financing alternative energy system purchase and installation. Read on to learn more about these exciting programs.
The Purpose and Origin of PACE Financing
The original model for PACE originated in California more than a decade ago. It was so successful that cities, counties and states have replicated it all across the country. To put the program into action, a city or state sells municipal bonds and uses the money to lend to property owners. The program emerged in response to the poor financial model of solar leasing, which many experts believe prevented this money-saving technology from proliferating as quickly as it should. The issue of ownership and transferability was also a significant problem with leasing. If the owner sought to sell the property, moving the system wasn’t an option, but transferring the lease to a new buyer was difficult. Although other alternative energy financing options exist today, not everyone has access to them.
How PACE Programs Work
Although they vary slightly from location to location, these programs are surprisingly simple and effective. The property owner orders a site assessment from a solar provider of their choice to verify that their property is appropriate for installation, and the provider issues an estimate for the work’s completion. The property owner submits his or her application and the estimate to the city’s PACE program administrator. Upon approval, the administrator issues payment to the solar provider, who goes out and installs the system. The property owner rarely has to spend any money out of pocket. The loan is broken down over a period of 20 years and added to the property’s tax bill using a competitive rate of interest. Should the owner desire to sell the property later, the new owner simply takes over the balance due on the loan.
Going Commercial with C-PACE
C-PACE was designed using the residential PACE model, adapted for the commercial property owner. Both Sonoma County, California, and Boulder County, Colorado, helped pioneer C-PACE programs. Commercial programs typically offer more flexible financing options, based on the assumption that commercial solar financing involves more expensive systems. Although C-PACE programs aren’t yet established in every location, Utah recently implemented its own C-PACE program*, which launched earlier this year.
In Utah, Idaho, Colorado, Wyoming and Nevada, Intermountain Wind and Solar offers its customers financing for alternative energy generating systems, including wind and solar. For little or no money out of pocket, you can start saving immediately while ending your dependence on municipal electricity. Contact them today to learn how to finance commercial solar for your business.