New Canaan has joined nearly 90 Connecticut municipalities in a program aimed at encouraging businesses to become more energy efficient, following Town Council approval July 16.
Commercial Property Assessed Clean Energy, or C-PACE, facilitates loan financing for clean energy improvements to commercial, industrial and multi-family property owners who then receive private capital up front for the entire project. The loan is then repaid through a benefit assessment lien for the commercial owner.
Mark Robbins, of the Conservation Commission, told the council that the program is "equipment agnostic," which means that it's there to provide capital and underwrite a project, not tied to specific technology.
"It's a mechanism for facilitating capital to fund multi-measure energy improvement projects," Robbins said. "It's simply a loan."
One of the unique features of the repayment obligation is that it "runs with the property and not with the current owner or occupant," Robbins said. In other words, a lien is placed on the property so that if it changes hands, the new owner is responsible for repaying the loan.
New Canaan would then serve as the collection agency for the authority, which Robbins said would bring "no cost or risk" to the town.
He said the financing would allow property owners "which are multi-family, greater than five units; commercial; industrial; for-profit; nonprofit; libraries; YMCAs; houses of worship; (and) private schools" to take advantage of the program "as long as the property is not owned by the municipality."
Robbins, who also is a consultant for the authority, said property owners "are net positive from day one" since the savings in operating and maintenance costs are greater than the payback obligations. "It's a win-win," he said.
"This money can be used to finance anything in connection to the project," Robbins added. "If you have a $1 million project to install solar (energy) on your roof, first you need to fix the roof (and) all these parts can be bundled in the project."
Eligible projects include high-efficiency lighting; heating and air-conditioning upgrades; high-efficiency chillers, boilers and furnaces; high-efficiency hot water heating systems; combustion and burner upgrades; fuel switching; renewable energy systems; among others.
Robbins noted that Connecticut has a "unique complexion" that calls for more green energy initiatives.
"We have the highest energy cost statewide, of the contiguous states," he said, "and we have among the oldest building stocks in the country."
According to an April report by the U.S. Energy Information Administration, Connecticut ranks third in the country, behind Hawaii and Alaska, on average retails price of electricity.
At least 20 projects already are underway or have been completed with the help of C-PACE, including one at the shopping plaza at 542 Westport Ave. in Norwalk for an LED lighting upgrade and a solar parking canopy.Read Full Article
The property owners financed $172,000 of a $340,000 lighting project through the program. According to C-PACE, the commercial owners will save an annual $17,500.
New Canaan's Tax Assessor Sebastian Caldarella said he's not sure how the taxpayers or the town would benefit from the program. He noted that the program doesn't make green building projects cheaper unless the interest rate remains low through the years.
"All it is is a guarantee of the repayment which is going to pass to the next owner," he said.
Gail Kelly, an attorney for New Canaan, said the authority "has assured that they would cover" all administrative costs incurred from the town's participation in the program. She noted, however, that although the authority "does an extensive analysis of the credit worthiness" of property owners, the town would have to enforce payments "when it comes to collecting delinquent charges."
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