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An Owner’s Guide to C-PACE

Posted by Mark Kennedy on May 31, 2019
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C-PACE stands for “Commercial Property Assessed Clean Energy.” It’s a Colorado state-sponsored program that uses private financing for commercial building retrofits and upgrades that meet certain energy efficiency thresholds. The key financial elements of the program are that the loan does not require owner equity in the project and it is repaid by a special property tax assessment on the building and collected by the county.

So, what are the benefits to the owner of undertaking a C-PACE project? To start, the C-PACE loan is structured as a property tax assessment; it’s a loan on the building, not to the owner. And the loan term can be as long as 25 years. If the building is sold, the tax assessment transfers to the new owner. This keeps the loan off of the owner’s balance sheet. C-PACE assessments are also non-recourse and non-accelerating, so they are very low-risk.

What’s the catch? Well, it’s in the name: Clean Energy! For building retrofits, 70% of the project has to be related to increasing energy and water efficiency.

How C-PACE Works

Say, for example, you own a 50,000 square foot building valued at $10,000,000 and this building needs a new HVAC system ($700K), LED lighting ($150K), and a building automation system ($150K). You can fund all $1,000,000 of these capital expenses through C-PACE, turning it into a property assessment, on a 5-7% fixed-rate loan against the building, over a 15- to 25-year term. Depending on the lease types and ages of the leases, some or all of the C-PACE tax assessment can be passed through to tenants. If the design engineering and scope of work is planned effectively, then the annual C-PACE assessment will be more than offset by the utility bill savings.

It’s not much of a catch. Of course, you need someone to work through the energy audit, design engineering, financial analysis, and project planning. That’s where we come in. Wheelhouse Commercial is an experienced C-PACE project manager. We can navigate the complex process of a C-PACE project and give our clients a more comfortable, energy efficient, and eco-friendly asset in return.

Eligible Properties: Commercial properties; office, industrial and retail.

Eligible Scope: Any upgrade or renovation that will reduce energy or water consumption.

Eligible Upgrades: LED lighting, motion and occupancy sensors, HVAC units, boilers, Building Automation Systems, elevator motors, building envelope, solar panels, roof upgrades, low-flow faucets and flush valves and more.

Financing: Up to 100% financing, provided by many private lending institutions. Currently, there are about 30 private lenders in Colorado with more joining every month. All hard and soft costs can be included.

  • Up to 30% of the financing can be used for non-energy efficient building upgrades.
  • Loan amortizations can be up to 25 years, but most are no more than 20.
  • No personal guarantees.
  • The financing must meet lender coverage ratios.
  • The loan does not show up on the balance sheet.
  • No acceleration clause. The debt stays with the property, not the owner.

Loan Service: The C-PACE loan is paid directly to the lender via a new Special Assessment on the property tax assessment.

Financial Impact: The goal of the program is to ensure that the increase in the property taxes are offset by the reduction in energy expenses. In many cases, the net impact is an overall reduction in the operating expenses. Depending on the types of leases, the tenants can pay some or all of the costs.

Rebates/Incentives: Many rebates and incentives are also available to a property owner through utility and other companies and can be taken in conjunction with the C-PACE project. These rebates are paid directly to the property owner.

Where Eligible: Participation is decided upon by each individual county. Currently, 23 of 64 Colorado counties participate in C-PACE. An additional five counties, including El Paso County (Colorado Springs) are in discussions to participate. Thirty-four mostly rural counties have not addressed C-PACE yet. Of the seven Denver-area counties, only Douglas County has rejected the program.

In summary, the C-PACE program is a low-risk means to vastly improve the quality and, therefore value, of a commercial property, with almost no out-of-pocket costs to the owner. The majority of Front Range commercial properties are over 30 years of age and in need of retrofitting due to normal wear and tear. That, coupled with the fact that the original building systems were markedly less efficient than those of today make a compelling case for any owner to investigate the program. Wheelhouse Commercial can help guide your through every step of the process, from initial due diligence through project completion.


Mark W. KennedyMark W Kennedy is the President of Wheelhouse Commercial in Denver, Colorado. For more information about how Wheelhouse Commercial can help manage your properties, please call 303.518.7406 or email

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