Commercial property owners in Rhode Island and across the country are working hard to reduce their environmental impact while lowering energy costs through investments in building efficiency, solar power and other energy sources. renewable. For larger, well-funded commercial real estate players, energy efficiency and renewable projects are relatively easy to fund. But for small businesses that own their own real estate, major efficiency improvements and investments in renewable energy can be a challenge.
Recognizing this market gap while working to reduce overall emissions in the Ocean State, the Infrastructure Bank has aggressively marketed our Clean Energy Program Rated by Commercial Properties (C-PACE) to RI’s small business community
The benefits of C-PACE for small businesses looking to improve their energy efficiency are significant, offering up to 100% project finance at a fixed rate for up to 25 years. This means that no upfront costs and no personal guarantees are needed to make energy efficiency and renewable energy projects a reality. Reimbursement is made through a property appraisal and, as a rule, the energy savings resulting from these improvements outweigh the payment for the appraisal.
Two recent projects funded by C-PACE show how well the program can work for small businesses.
McQuade’s ACE hardware store in Westerly is one of the city’s most well-known hardware stores. General manager Mark McQuade was interested in the possibility of installing solar panels on the roof, but after a recent complete renovation of the store, he was unsure of how to finance the solar project. In collaboration with Infrastructure Bank and Greenworks Lending, C-PACE funding of $ 448,000 allowed the store to build a 200.2 kW rooftop solar installation that will reduce 2,683 tonnes of CO2 emissions and save 1, $ 1 million in electricity costs over the expected 20-year useful life. of the project. Without pocket money and C-PACE covering all costs, the project generated positive cash flow from day one.
Green Line Apothecary in Providence is a pharmacy and soda fountain inspired by vintage apothecaries. With green in his name, President and COO Ken Procaccianti wanted his building to be energy efficient. Using Green Line’s equity, the company installed building upgrades in 2019, including LED lighting and high-efficiency HVAC equipment, saving the company over 7 $ 500 per year in energy costs. Faced with the difficult business environment created by the COVID-19 pandemic, Green Line approached the Infrastructure Bank about opportunities to increase liquidity. Thanks to C-PACE, Green Line was able to borrow $ 328,000 against the value of previous efficiency improvements. Through this creative use of the program, Green Line was able to secure a long term, fixed rate C-PACE loan that freed up valuable capital using existing assets.
Whether it is to fund energy efficiency and renewable energy projects, or to free up capital from qualifying efficiency upgrades installed any time after July 2015, C-PACE is a great option for small businesses that seek to reduce their emissions and save on energy costs.
Jeffrey Diehl is CEO of Rhode Island Infrastructure Bank, Providence, RI.