In June 2012, Connecticut passed legislation enabling Commercial Property Assessed Clean Energy financing (C-PACE), targeting commercial, industrial and multifamily property owners. C-PACE is a financial policy tool that allows property owners to finance qualifying energy efficiency and clean energy improvements on their properties through a special assessment on the property tax bill, which is repaid over a period of years (up to 20 years). Connecticut's C-PACE program is “owner-arranged,” meaning the property owner contracts directly with a private capital provider to obtain financing. The special assessment (also called a lien) on the property automatically transfers to the next owner in the event of a sale or transfer of ownership. The lien is senior to a mortgage, although it is non-accelerated, meaning in the event of default, only the payments in arrears would come due.
To participate in C-PACE financing, interested property owners must:
- Be located in a participating municipality. The first two towns to opt into C-PACE are Bridgeport and Norwalk. CEFIA maintains a list of [http://www.ctcleanenergy.com/LinkClick.aspx?link=643&tabid=642 participating municipalities]. Interested property owners should contact CEFIA if their municipality is not on the list of participating municipalities.
- Work with an approved energy professional (such as an auditor or contractor) to identify eligible projects. CEFIA will maintain a list of approved contractors. In general, improvements must be permanently affixed to the property and should either lower the building’s energy consumption or produce clean energy.
- Apply for financing via CEFIA's C-PACE web site.* If approved, CEFIA will place a lien on the property and financing will become available. Property owners repay the financing via the local property tax bills over the course of 20 years.
- Obtain written consent of existing mortgage holders.
While there is no financing minimum, PACE financing is best suited for capital improvements above $150,000, due to transaction costs.
* The online application will be available in early December 2012.