NC Senate passes CPACE funding program to make clean energy upgrades more accessible

The legislature advanced a new financing program Thursday that aims to make clean energy upgrades more accessible, including rooftop solar, energy efficient HVAC systems, and LED lighting.

Commercial Property Assessed Clean Energy (CPACE) financing allows businesses to borrow money for upgrades and pay it back over time through a small increase in property taxes.

Clean energy advocates, including Matt Abele with the North Carolina Clean Energy Association, applaud the move.

“It’s a monumental step in clean energy here in North Carolina,” Abele said.

More than 38 states have already passed legislation for CPACE programs and more than $2 billion in projects have been financed nationwide, according to the Department of Energy.

“This is going to help those businesses put more money back into their pocket, be able to pay their employees more money, and continue to reinvest in the communities that they are already invested in,” Abele said.

State Treasurer Dale Folwell has strongly opposed efforts to introduce a state C-PACE program in recent years.

“CPACE is a form of predatory lending,” Folwell said. “It manipulates the free market to incentivize small businesses to be offered loans that will have higher interest rates and a higher rate of default. It’s also particularly concerning that when used for so-called green energy projects, that by the time the borrower has a problem, the lender is far removed from the transaction and has no liability if the project never meets its cost savings targets, leaving small business owners holding the bag to keep paying for something that isn’t working.”

Supporters say the treasurer’s concerns apply more to PACE lenders in the residential sector.

“It’s a voluntary option for commercial entities who are looking for an additional opportunity to finance the system,” Abele said. He also noted that clean energy upgrades could help businesses be more resilient in the face of climate change.

“It’s not only a clean energy and sustainability tool, it’s also a resiliency and a bottom line tool for businesses to decrease their utility bills and keep their doors open in the face of increasingly severe storms coming through the region,” Abele said.