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City staff brief committee on CPACE financing option for commercial energy, water and resilience projects
Summary
Staff briefed the Jobs and Economic Development Committee on CPACE, a new state‑authorized financing mechanism for energy, water and resilience upgrades that records long‑term assessments on commercial properties and is administered statewide by EDPNC under SB 802.
City staff briefed the Jobs and Economic Development Committee on Feb. 3 about Commercial Property Assessed Clean Energy (CPACE), a voluntary financing mechanism authorized by North Carolina’s SB 802 that allows long‑term financing placed as a property lien for energy efficiency, renewables, water efficiency and resilience projects.
Todd (city staff) and Aaron Tower explained CPACE lets private lenders finance eligible improvements and record an assessment (a lien) on the commercial property; the lien generally travels with the property so repayment obligations remain with the property until satisfied. Staff said the North Carolina statewide administrator for the program is the Economic Development Partnership of North Carolina (EDPNC), which will review and approve project applications. Local governments must opt into the statewide program by passing a resolution and completing a public‑hearing process.
Staff emphasized several features: CPACE can provide 100% financing of eligible work, offer terms tied to the useful life of improvements (often long durations for solar), enable lower annual costs and may reduce split‑incentive barriers for owners and future buyers. Staff also noted priority requirements: local acceptance is required and lenders typically negotiate terms directly with property owners. The presenter said CPACE liens generally have priority over private mortgages except for certain government liens and taxes; staff noted that property owners typically must obtain existing lender consent for a CPACE assessment.
Staff said SB 802 authorizes EDPNC to administer a statewide toolkit and that EDPNC had submitted the toolkit to the NC Commerce Department for approval; once the toolkit is approved the statewide program will be active and local governments may pass resolutions of intent, hold hearings and opt in. Staff said the city and county are coordinating to pursue countywide participation to make the mechanism available broadly.
Committee members asked about uptake, lender terms, borrower protections and how CPACE compares to conventional financing. Staff said CPACE typically benefits larger projects and that national CPACE portfolios show transactions often in the multi‑million dollar range; projects and lender terms will be negotiated case by case. Staff said they will continue coordination with county partners and return with additional details on administration and outreach once the state toolkit is finalized.
