Philadelphia Energy Authority, by Lennal Kalawa and Lisa Shulock
Commercial Property Assessed Clean Energy (C-PACE) is a financing tool that facilitates the placement of private capital – with favorable terms and conditions – in order to improve the energy and water performance of commercial buildings. Nationwide, this tool has primarily been used to fund building retrofits and new construction projects. In Pennsylvania, commercial property owners can also take advantage of C-PACE for retroactive financing for projects completed within the past 24 months.
Commercial properties that have recently had qualifying energy and water efficiency work done can use C-PACE to shore up a property’s reserves, improve cash flow, provide liquidity, and even potentially reduce other lenders’ exposure in the capital stack. For example, The Philadelphia Met recently used retroactive C-PACE financing to strengthen its financial position. The owner of The Met borrowed $6,000,000 in C-PACE financing from Enhanced Capital to finance energy efficiency upgrades in the recently renovated Philadelphia landmark.
While not strictly retroactive, for properties nearing completion, C-PACE can also offer funds for cost overruns or to replace lender pullback. The terms and conditions of C-PACE will likely out-perform other forms of financing available to building owners and developers in these scenarios. For example, Shift Capital, the developer of J-Centrel, added $1,500,000 in C-PACE financing to its capital stack while the project was in construction, leveraging its deep investments in energy and water efficiency.
To learn more about whether C-PACE financing – retroactive or otherwise – is right for your project, contact Philadelphia C-PACE at CPACE@philaenergy.org.