As individuals and businesses across the country continue to navigate the difficult Covid-19 situation, the Philadelphia Energy Authority continues to operate the Philadelphia Commercial Property-Assessed Clean Energy (C-PACE) program to help commercial building owners reduce their carbon footprints while improving their financial health.
C-PACE provides long-term, fixed-rate and low-cost capital to commercial property owners for energy efficiency, water conservation and clean energy projects, and can be used to retroactively finance or refinance energy efficient construction already completed.
Many businesses are facing unprecedented challenges right now. Though energy efficiency projects may not be top of mind, C-PACE provides a useful opportunity to leverage inexpensive, long-term capital to create cost savings, provide liquidity, and improve public health – all of which strengthen businesses for the long term.
Here are three ways C-PACE can benefit your business:
1. Energy efficiency projects financed with C-PACE can generate annual savings: C-PACE energy efficiency and water conservation projects must result in cost savings. Often, the annual C-PACE repayment is less than the cost savings per year, creating positive net operating income. Property owners can use C-PACE to cover 100% of hard and soft project costs. During difficult economic times, zero dollars out of pocket combined with recurring cost savings can help commercial property owners boost their financial health.
2. Retroactive financing can reduce debt service payments or free up cash for businesses: Commercial property owners that completed an eligible project in the past two years may be able to retroactively finance their projects with C-PACE. Retroactive financing allows property owners to replace more expensive debt with C-PACE’s low-rate, long-term financing. If there isn’t a previous financing to replace, retroactive C-PACE financing can provide a cash infusion, bolstering the business’ cash on hand.
3. Addressing Philadelphia’s carbon footprint creates a more resilient city: Seventy percent of Philadelphia’s carbon footprint comes from buildings and industry. Energy efficiency and clean energy projects reduce Philly’s carbon emissions, which is more important than ever during the Covid-19 pandemic. Studies show that populations with high levels of air pollution are hit harder by Covid-19, so every step we take to reduce emissions will affect the health of all Philadelphians. Most C-PACE projects reduce emissions, which helps fight climate change and results in cleaner air, healthier people and a more resilient workforce.
During this uncertain time, C-PACE is a flexible tool that can help commercial property owners weather this storm and strengthen their businesses in the long term.
For more information or to discuss a specific project, email CPACE@philaenergy.org.