skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Lessons in Commercial PACE Leadership: The Path from Legislation to Launch

Abstract

Nonresidential buildings are responsible for over a quarter of primary energy consumption in the United States. Efficiency improvements in these buildings could result in significant energy and utility bill savings. To unlock those potential savings, a number of market barriers to energy efficiency must be addressed. Commercial Property Assessed Clean Energy (C-PACE) financing programs can help overcome several of these barriers with minimal investment from state and local governments. With programs established or under development in 22 states, and at least $521 million in investments so far, other state and local governments are interested in bringing the benefits of C-PACE to their jurisdictions. Lessons in Commercial PACE Leadership: The Path from Legislation to Launch, aims to fast track the set-up of C-PACE programs for state and local governments by capturing the lessons learned from leaders. The report examines the list of potential program design options and important decision points in setting up a C-PACE program, tradeoffs for available options, and experiences of stakeholders that have gone through (or are going through) the process. C-PACE uses a voluntary special property assessment to facilitate energy and other improvements in commercial buildings. For example: - Long financing terms under C-PACE can produce cashmore » flow-positive -- projects to help overcome a focus on short paybacks. - Payment obligations can transfer to subsequent owners, mitigating concern about investing in improvements for a building that may be sold before the return on the investment is fully realized. - 100% of both hard and soft costs can be financed. To capture the benefits of C-PACE financing, state and local governments must navigate numerous decision points and engage with stakeholders to set-up or join a program. Researchers interviewed experts (including state and local sponsors, program administrators, capital providers and industry experts) on their lessons learned and arrived at the following key takeaways for state and local leaders: Enabling legislation: Carefully developed enabling legislation (which includes certain key provisions) and early stakeholder input can greatly improve the chances of program success. Options for program administrative structure: At least four program administrative structures are in use; certain administrative structures inherently result in more standardized product offerings and, potentially, economies of scale. Approaches to program and project capitalization: Two approaches to capitalization have been used. Bonding (project capital is raised through a bond sale) and direct funding (capital providers fund projects directly); programs can rely on one capital provider (a closed market) or allow multiple capital providers to participate (an open market). What and who qualifies for the program: Some programs require a minimum project savings-to-investment ratio; other programs encourage it or are indifferent. Estimating and documenting project energy cost saving: Estimating and documenting energy and cost savings can add costs to projects but also demonstrate C-PACE program value. Stakeholder engagement: Key stakeholder groups to engage include community leaders, local governments, building owners, contractors, utilities, capital providers and mortgage holders; stakeholder engagement should be tailored to each particular group. Start-up and ongoing costs: Understanding set-up and ongoing costs can help program sponsors plan for funding C-PACE programs and projects. The U.S. Department of Energy's Office of Weatherization and Intergovernmental Programs funded the report.« less

Authors:
; ; ;
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Weatherization and Intergovernmental Programs Office (EE-5W)
OSTI Identifier:
1425438
Report Number(s):
LBNL-2001121
ark:/13030/qt32b0n0bz
DOE Contract Number:
AC02-05CH11231
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION

Citation Formats

Leventis, G, Schwartz, LC, Kramer, C, and Deason, J. Lessons in Commercial PACE Leadership: The Path from Legislation to Launch. United States: N. p., 2018. Web. doi:10.2172/1425438.
Leventis, G, Schwartz, LC, Kramer, C, & Deason, J. Lessons in Commercial PACE Leadership: The Path from Legislation to Launch. United States. doi:10.2172/1425438.
Leventis, G, Schwartz, LC, Kramer, C, and Deason, J. Tue . "Lessons in Commercial PACE Leadership: The Path from Legislation to Launch". United States. doi:10.2172/1425438. https://www.osti.gov/servlets/purl/1425438.
@article{osti_1425438,
title = {Lessons in Commercial PACE Leadership: The Path from Legislation to Launch},
author = {Leventis, G and Schwartz, LC and Kramer, C and Deason, J},
abstractNote = {Nonresidential buildings are responsible for over a quarter of primary energy consumption in the United States. Efficiency improvements in these buildings could result in significant energy and utility bill savings. To unlock those potential savings, a number of market barriers to energy efficiency must be addressed. Commercial Property Assessed Clean Energy (C-PACE) financing programs can help overcome several of these barriers with minimal investment from state and local governments. With programs established or under development in 22 states, and at least $521 million in investments so far, other state and local governments are interested in bringing the benefits of C-PACE to their jurisdictions. Lessons in Commercial PACE Leadership: The Path from Legislation to Launch, aims to fast track the set-up of C-PACE programs for state and local governments by capturing the lessons learned from leaders. The report examines the list of potential program design options and important decision points in setting up a C-PACE program, tradeoffs for available options, and experiences of stakeholders that have gone through (or are going through) the process. C-PACE uses a voluntary special property assessment to facilitate energy and other improvements in commercial buildings. For example: - Long financing terms under C-PACE can produce cash flow-positive -- projects to help overcome a focus on short paybacks. - Payment obligations can transfer to subsequent owners, mitigating concern about investing in improvements for a building that may be sold before the return on the investment is fully realized. - 100% of both hard and soft costs can be financed. To capture the benefits of C-PACE financing, state and local governments must navigate numerous decision points and engage with stakeholders to set-up or join a program. Researchers interviewed experts (including state and local sponsors, program administrators, capital providers and industry experts) on their lessons learned and arrived at the following key takeaways for state and local leaders: Enabling legislation: Carefully developed enabling legislation (which includes certain key provisions) and early stakeholder input can greatly improve the chances of program success. Options for program administrative structure: At least four program administrative structures are in use; certain administrative structures inherently result in more standardized product offerings and, potentially, economies of scale. Approaches to program and project capitalization: Two approaches to capitalization have been used. Bonding (project capital is raised through a bond sale) and direct funding (capital providers fund projects directly); programs can rely on one capital provider (a closed market) or allow multiple capital providers to participate (an open market). What and who qualifies for the program: Some programs require a minimum project savings-to-investment ratio; other programs encourage it or are indifferent. Estimating and documenting project energy cost saving: Estimating and documenting energy and cost savings can add costs to projects but also demonstrate C-PACE program value. Stakeholder engagement: Key stakeholder groups to engage include community leaders, local governments, building owners, contractors, utilities, capital providers and mortgage holders; stakeholder engagement should be tailored to each particular group. Start-up and ongoing costs: Understanding set-up and ongoing costs can help program sponsors plan for funding C-PACE programs and projects. The U.S. Department of Energy's Office of Weatherization and Intergovernmental Programs funded the report.},
doi = {10.2172/1425438},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Tue Feb 27 00:00:00 EST 2018},
month = {Tue Feb 27 00:00:00 EST 2018}
}

Technical Report:

Save / Share: