Owners and Developers

C-PACE: A Straightforward Financing Solution for Energy Efficient Construction

Commercial Property Assessed Clean Energy (C-PACE) is a relatively new and quickly growing alternative financing mechanism for businesses of all sizes. C-PACE makes it possible for owners and developers of commercial properties to obtain low-cost, long-term financing, which is paid back through an annual assessment on the organization’s property tax bill.

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Benefits for Owners and Developers

This alternative financing mechanism allows owners and developers to finance building retrofits, gut rehabilitations, and new construction with no upfront costs. In addition, eligible projects can be funded retroactively to replace more expensive financing.

When owners and developers utilize C-PACE financing, they create builds that are not only higher performing and more comfortable, but also cost-effective and competitive. They’re boosting their project’s long-term sustainability because they are able to afford higher quality materials and building measures, making for a better long-term investment.

Utilized for new construction and retrofits
Covers a variety of products including HVAC, roofing, solar, and more
Develop buildings that are cost-effective, energy efficient and higher quality

C-PACE Compared to the Competition

When you use C-PACE to finance your energy efficient construction or retrofit, you receive a longer financing term, lower interest rate, and annual or semi-annual payment schedule that fits your business' goals.

COST OF CAPITAL COST OF CAPITAL EQUITY MEZZ C-PACE
Senior Debt1 4.50% $30.0 $30.0 $30.0
Mezz2 14.00% - $14.0 -
C-PACE3 6.50% - - $11.5
Equity4 18.50% $20.0 $10.0 $10.0
Total Sources - $50.0 $54.0 $51.5
RETURNS
WACC - 9.9% 9.5% 7.6%
IRR - 17.9% 12.2% 25.2%
Equity Cash on Cash Multiple - 2.1x 1.8x 2.8x
  1. 60% LTC, includes senior interest revenue
  2. $10M loan plus 18 month prepaid interest reserve
  3. The preferred return is allocated to project owner so this does not reduct FCFE; As a result, there is a higher WACC is driven by the pref % but the return is higher than the Mezzanine Financing scenario
  4. Interest-Only
Features and Benefits MEZZ C-PACE
Typical Financing Term 3 - 5 years 15 - 30 years
Typical Interest Rate 10% - 15% 6% - 7%
Payment Schedule Monthly Annual or Semi-Annual
Balloon Payment, Amortization Yes, interest-only No, fully amortizing
Security Interest Pledge of Borrower Equity Assest only, no UCC filing
Transferability of Obligation No Yes
Pass Through to NNN Tenants No Yes
Delay First Payment (Capitalized Interest) No Yes, up to 2 years' interest for larger projects
Off-Balance Sheet Financing No Possibly*
Acceleration of Principal Balance Yes, upon default or foreclosure No
Financial/Operating Covenants Yes No
Out of Pocket Equity Required Sometimes No
Personal Guarantee Sometimes No**
  • Client's accounting resources to review and finalize accounting treatment
  • Non-resource after construction

A Full Service, Process Approach to Analyzing, Financing, Engineering, and Managing Energy-Efficient Commercial Projects

Ebee delivers a process designed to produce meaningful results to financing and developing commercial projects involving energy and water efficient retrofits, redevelopments, and new construction.

Our proprietary process and unique financing program leveraging C-PACE helps our clients afford start-to-finish energy savings projects. From analysis, to financing, planning, and construction management, we work with clients to achieve positive cash flow for their facility upgrades while saving time, energy, and resources.

100+ Projects Nationwide 40+ Years Combined Experience

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Contact our team to learn more, or schedule a discovery call to discuss your next project.