Delaware C-PACE for Property Owners
Looking to modernize your building? Need to replace outdated, energy-hogging equipment? Delaware C-PACE may be the answer. This innovative program for commercial and industrial property owners can:
- Lower your energy bills
- Provide up to 100 percent financing
- Offer long terms (up to 25 years)
- Typically require no personal guarantee
- Typically generate positive cash flow
- Allow you to transfer the repayment obligation if the building is sold.
Sound too good to be true? It’s not. Across the country, property owners are taking advantage of C-PACE to install the eligible improvements they’ve been putting off—and enjoying a more efficient building as a result.
What is C-PACE?
Commercial property assessed clean energy, or C-PACE, is an energy efficiency financing program that has been adopted by more than 30 states, including Delaware. The financing is provided by capital providers in an open market, which provides property owners with competitive, private financing. The financing is secured through a voluntary benefit assessment and assignable lien that is levied against the owner’s property and repaid to the capital provider. The term is typically based on the useful life of the improvements and can extend up to 25 years.
Because the long-term financing can cover up to 100 percent of a building’s modernization project cost and often requires no money down, C-PACE enables property owners to make substantial upgrades to their buildings. In many cases, the project’s energy savings may outweigh the C-PACE payments, which creates positive cash flow for the property owner, and whose upgraded building is likely to be more valuable after a C-PACE project has been completed.
What properties are eligible?
Properties eligible for C-PACE financing must meet two requirements. The building must be located in a county that has opted in to the program (participating counties) and have one of the following uses:
- Multifamily (with 5 or more units)
New construction projects are also eligible for C-PACE financing.
The minimum project construction cost is $50,000. There is no maximum.
Which improvements are eligible?
Improvements that are eligible for C-PACE financing must be permanently affixed to the commercial or industrial property. See a list of eligible improvements.
To get started, you can work with a registered contractor or project developer of your choosing to discuss the eligible improvements that would be beneficial for your building. (If you don’t have a contractor in mind, you can find one by viewing a list of registered contractors who have completed C-PACE training).
Next, you and your contractor will work together to determine the optimal project that meets both your needs and the property’s. Upon confirmation of the final project scenario, Delaware C-PACE will collaborate with you and your contractor on next steps, which include obtaining mortgage holder consent and selecting a capital provider.
Then, the capital provider will facilitate the finance closing. After the closing, the county tax assessor will record the assessment lien on the property and the capital provider will then commence funds disbursement for construction. The county will collect payments due in accordance with the terms of the Assessment and Finance Agreement.