CPACE

 COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY (CPACE) PROGRAM

CPACE

Commercial Property Assessed Clean Energy

What is CPACE?

 The CPACE program allows owners of eligible commercial property to obtain long-term, low-interest rate financing from private capital        providers for certain qualified projects. Eligible properties may include any privately-owned commercial, industrial, agricultural, or multi-family (with five or more dwelling units) real property.

Background

CPACE was authorized by the Oregon State Legislature under ORS 223.680 and ORS 223.685.

On Aug. 2, 2022, Deschutes County’s CPACE Ordinance, Ordinance No. 2022-005, became effective. The Deschutes County Administration    Office administers the CPACE program.

Benefits

CPACE offers benefits to eligible privately-owned commercial, industrial, agricultural, or multi-family (with five or more dwelling units) properties located within the boundaries of Deschutes County.

For Building Owners and Developers:

One of the biggest barriers to converting potential projects to completed projects for efficiency and seismic upgrades are the up-front cost of the types of measures identified in the statute as qualifying improvements. CPACE financing typically requires little up-front investment, and qualifying improvements improve property value. Energy efficiency measures also lower operating costs. In addition, CPACE financing has the following benefits:

• Up to 100%, long-term financing.  Many owners lack the capital to complete efficiency and seismic improvements. All direct and indirect costs incidental to the qualified improvements can be wrapped into CPACE financing.
• Transferrable upon sale.  Some owners may want to sell the building before the financing is repaid.  The CPACE lien and assessment are attached to the property and transfers to the new owner.
• Cash flow benefits.  CPACE financing may be repaid over the useful life of the improvements which, because of the long-term financing options, can have positive effects on cash flow.
• Triple-net and Full-net leases may allow pass-through of assessment installments to tenants.  Under triple/full net leases, CPACE payments can be passed along to tenants, who also typically derive benefit from any energy savings through reduced operating costs.

For Energy Auditors, Architects, Building Engineers, and Contractors:

By allowing a property owner to access 100% up-front financing for longer terms than are typically available for conventional financing, more substantial efficiency and seismic improvements are now more affordable with CPACE.  Energy auditors, architects, engineers, and contractors can suggest CPACE financing as a way for their clients to implement needed energy or seismic upgrades that might otherwise be unaffordable.  Since the demand for building efficiency and seismic improvements will grow in a CPACE-enabled jurisdiction, CPACE is a powerful business growth catalyst for building professionals like energy auditors and contractors.

For Existing Lien Holders: 

CPACE improvements can enhance property value and typically improve a building’s longevity, thereby reducing the risk of property value decline over time.  In addition, CPACE financing is non-accelerating, meaning only current or past due annual payments can be collected each year while future payments stay with the property.  As such, existing mortgage holders see their collateral improved without substantial increase in credit risk and with only a modest impact on lien priority.  CPACE financing is not permitted without the consent of all existing lien holders and, under certain circumstances, the holders of certain other obligations encumbering commercial residential property.

Qualifying Projects

CPACE program enables financing for commercial property owners to make certain qualified energy efficiency, renewable energy, water conservation, and seismic rehabilitation improvements. Funds must be used for eligible expenses, which may fall into one of these categories:

Energy efficiency

• Decrease energy consumption or demand through the use of efficiency technologies, products, or activities that reduce or support the reduction of energy consumption or allow for the reduction in demand or reduce greenhouse gas emissions.

Renewable Energy

• Support the production of clean, renewable energy, including but not limited to a product, device, or interacting group of products or devices on the customer's side of the meter that generates electricity, provides thermal energy, or regulates temperature.

Water Conservation

• Decrease water consumption or demand and address safe drinking water through the use of efficiency technologies, products, or activities that reduce or support the reduction of water consumption, allow for the reduction in demand, or reduce or eliminate lead from water which may be used for drinking or cooking.

Seismic Rehabilitation Improvements

Process

Documents

If you are interested in applying for the CPACE program, please complete the below forms and email them to CPACE@deschutes.org

• CPACE Application
• CPACE Application Checklist
• Certificate of Capital Provider Qualification
• Certificate of Qualified Improvement
• CPACE Notice of Benefit Assessment and CPACE Lien

Resources

• Deschutes County Program Guidebook
• Deschutes County CPACE Program Summary
• Deschutes County Ordinance 2022-005
• US Department of Energy – CPACE Programs
• 350 Deschutes - CPACE

Fees

Upon approval by county staff, and prior to executing documents for a CPACE transaction, a program fee will be due. The program fee is one percent (1%) of the total CPACE financing, or a minimum of $2,500 and capped at a total of no more than $15,000.

Contact

If you have questions please email CPACE@deschutes.org.