Phil Castle, The Business Times
Tracy Phillips has high hopes for a program offering financing for renewable energy and energy efficiency projects in Mesa County.
“It’s fantastic Mesa County is among the participants,” says Phillips, director of the Commercial Property Assessed Clean Energy (C-PACE) program in Colorado.
Mesa County Commissioners voted in April to opt into the program, joining 36 other counties across the state.
Phillips offered an overview of the program during an online presentation hosted by the Grand Junction Area Chamber of Commerce.
C-PACE offers the owners of eligible commercial and industrial buildings up to 100 percent financing for renewable energy, energy efficiency and water conservation projects, he says. Financing is available for agricultural properties as well as industrial and retail properties, hotels, multi-family housing, offices and buildings used by nonprofit organizations.
Private providers offer capital with competitive interest rates and payment terms of up to 25 years, Phillips says.
Payments are collected as part of the county property tax assessment process — tying the financing to buildings and not owners, he says. Assessments transfer when buildings are sold. Participating counties levy of service fee of up to 1 percent of the assessment.
Although not required by the terms of the program, savings realized through renewable energy and efficiency improvements often exceed the assessments, Phillips says.
That makes C-PACE attractive not only to the owners of buildings interested in improving their properties, but also investors. The program also benefits contractors that work on the projects, he says.
Financing is available through C-PACE for nearly any project that results in utility cost savings, Phillips says. That includes solar panels and other forms of renewable energy. That also includes heating, ventilation and air conditioning systems as well as insulation, lighting, roofing and water pumps. Financing also has been used to install electric vehicle charging stations. Financing also covers anything related to the projects, including architectural and engineering services and energy audits.
C-PACE financing has been used in Western Colorado for such projects as the new headquarters of the Mayfly fly fishing equipment manufacturer in Montrose, an organic fruit farm in Paonia and winery and art gallery in Delta County,
Some of the traditional aspects of lending still apply, Phillips says. Providers evaluate the ratio of the loan to the value of the property.
Mortgage holders on buildings must provide written consent and will consider the effects of C-PACE financing on the value of collateral and ability of a borrower to repay loans, Phillips says. Improvements usually increase the value of the properties.
While capital providers prefer larger projects, Phillips says there are opportunities as well with medium and smaller projects.
It’s more challenging to finance smaller projects in rural areas, but Phillips says he’s hopeful a fund can be established to bundle smaller projects and sell the portfolios to bigger lenders.
There’s an additional step in the process in Mesa County in that the county must review and approve applications. But the county has been “very responsive” he says.
The Colorado C-PACE program has completed a total of $147 million in financing for 93 projects, Phillips says.
With more than 40 participating lenders and 260 registered contractors, the Colorado program is one of the most active in the United States, he says.
But Phillips expects those numbers to grow in part because of the participation of Mesa County and other counties. “We’re very excited Mesa County opted in.”