Month: August 2024

Written by Scott Doig, PEA Summer 2024 Intern and Senior at Oberlin College

The Philadelphia C-PACE (Commercial Property Assessed Clean Energy) program requires that new construction and gut rehab projects exceed the minimum energy efficiency code requirements established by Philadelphia’s building energy code. The current code is International Energy Conservation Code (IECC) 2018. Beginning in July 2025, Philadelphia and Pennsylvania will adopt IECC 2021.

This post provides a description of the major differences between IECC 2018 and IECC 2021 for commercial properties.

A recent analysis by the Pacific Northwest National Laboratory (PNNL) indicated that commercial buildings adhering to the IECC 2021 could see energy savings of 4.7 percent compared to IECC 2018. 

Key Changes in the IECC 2021 for Commercial Buildings

Building Envelope: The new code mandates higher insulation levels to improve thermal resistance (R factor) and reduce heat transfer (U factor). The updated code requirements for envelope air leakage testing and verification adopted by Pennsylvania requires that the reports be submitted to code officials. Additionally, new provisions mandate controls for operable openings including windows and doors. 

Mechanical Systems: The code updates efficiency requirements for mechanical equipment. These include refinements in energy recovery ventilation and introducing a new fan efficiency metric.

Electrical Power and Lighting Systems: The code increases lighting and power efficiency requirements. Pennsylvania made section 405.11 on automatic receptacle control optional. There are also new provisions that mandate energy metering and monitoring.

Efficiency Requirements of Section C406: The revised structure of Section C406 now includes a greater number of additional efficiency options. Buildings must comply with one or more of the following: enhanced HVAC performance requirements, reduced lighting power, improved lighting controls, on-site renewable energy supply, dedicated outdoor air systems for certain HVAC equipment, high-efficiency service water heating systems (hot water for restrooms, showers, kitchens, etc.), enhanced envelope performance, and measures to reduce air infiltration.

Appendices: New appendices are included in IECC 2021 though they were not adopted for use in Pennsylvania, so are optional. They include: (1) Appendix CA Board of Appeals to address disputes related to code interpretation and enforcement; (2) Appendix CB is for Solar-Ready new construction; (3) Appendix CC introduces provisions for zero energy commercial buildings.

Resources:

IECC 2021 Summary

PNNL Analysis of IECC 2021 Energy Savings

IECC 2021 Commercial Code (Chapter 4)

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C-PACE was used to finance the construction of 114-unit multifamily property in the Fishtown neighborhood near the Market-Frankford “El” expanding on the number of transit-oriented developments in the area. On July 31, 2024, PACE Loan Group (PLG) closed a $10.6 million C-PACE loan with 1440 FRONT LLC to complete the capital stack for the new construction of a 114-unit multifamily property in the Fishtown neighborhood of Philadelphia resulting from combining six vacant city lots. The project, at 1440 N. Front Street has an expected completion date of June 2026. 

The new construction project includes 2,083 sq. ft. of ground-level retail space, 114 apartments, a green roof deck, fitness center, and business center. Builders Capital provided a $14 million construction loan. The C-PACE proceeds will be used for the building envelope, energy-star windows, HVAC, lighting systems, and mechanical systems. 

Fact sheets for this project and all PA C-PACE projects can be found here.  

Matthew McCormack (Senior Vice President) at PLG who originated the loan stated, “when a local bank backed out at the closing table, PLG worked with JLL to bring a partner lender, Builders Capital, to complete the capital stack. We were pleased that C-PACE enabled this project to move forward and to have completed our first Pennsylvania project.”

Interested in learning more about C-PACE? Contact us at cpace@philaenergy.org and/or attend our C-PACE Open Meetings which take place on the last Thursday of each month from 2:00-3:00PM. See all C-PACE Philadelphia events here.

About PACE Loan Group
PACE Loan Group (PLG) is a national leader in the C-PACE marketplace, providing direct C-PACE financing to commercial property owners. PLG benefits from institutional support with $700 million in capital from funds managed by AB CarVal, a subsidiary of Alliance Bernstein. The PLG team provides expertise up and down the capital stack, from origination and underwriting to loan servicing. To learn more about PLG, visit www.paceloangroup.com.