After only 10 months, Connecticut”™s clean energy financing program for commercial buildings is among the largest in the nation.
Since the program”™s launch in January, nearly 20 building owners across the state have received $15 million in funding to finance building energy improvements. The only state to finance more is California, though its programs are much older.
“We”™re beyond our expectations,” said Genevieve Sherman, a senior manager at the Clean Energy Finance and Investment Authority (CEFIA). “It really illustrates the interest and need for this kind of financing.”
Whereas energy upgrades often produce savings over time, finding the upfront capital can be a challenge for business owners. To solve the issue, Connecticut”™s General Assembly created last year the Commercial Property Assessed Clean Energy (C-PACE) program, to help building owners connect with lenders to secure the necessary funding.
Whether it”™s for solar panels, weatherization of an office building or simple efficiency upgrades at a manufacturing facility, the program has its benefits. Businesses save on their energy bills; bankers have secured loans through the state-run program and cities reduce their energy consumption.
Building on programs in roughly 30 states, Connecticut”™s C-PACE program is the first to include a statewide platform, as opposed to individual city-run initiatives. Additionally, it”™s the only program to include an open market for banks to purchase the loans.
“We”™re really excited about where we”™re at,” Sherman said. “This is by leaps and bounds one of the most successful programs in the country.”
The total level of funding provided is already more than five times the national average for any given program, according to self-reported data from the programs. C-PACE already has a viable pipeline of 100 additional applicants eager to participate, Sherman said.
Not every city has signed up for the program, allowing businesses to participate. But the 69 cities to do so represent roughly 70 percent of the commercial real estate market.
By having a middle man like CEFIA underwrite the financing, the program is able to leverage a much larger private investment out of public dollars, Sherman said. CEFIA officials can review and approve quality applications and, by accepting payments through property taxes, banks are willing to invest in the loans.
At the nonprofit PACENow, which reviews states”™ programs for stakeholders, Executive Director David Gabrielson agreed Connecticut”™s program is among the most successful at this early stage.
“It”™s a great model and one we wish more states around the country would adopt,” he said. “The governor and Legislature, in their wisdom, created a statewide program and housed it in Connecticut”™s green bank, CEFIA. That authority has a budget, resources and a balance sheet.”
Only two PACE programs are still within the same size of Connecticut”™s program, according to PACENow data.
California”™s Sonoma County program has financed roughly $10.7 million through 60 projects. The program in Toledo, Ohio, has financed $11.7 million through 51 projects.
“Connecticut has done a really good job of getting a good program in place and the word out,” Gabrielson said. “It”™s basically better economics for the building. If you have a power financing tool like PACE, that helps seal the deal.”
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