New Jersey C-Pace Legislation

A-2374 requires the New Jersey Economic Development Authority (NJEDA) to establish a Garden State Commercial Property Assessed Clean Energy (“C-PACE”) Program to facilitate the financing of C-PACE projects. The bill also allows certain local governments to establish their own local C-PACE programs to facilitate the financing of C-PACE projects. A C-PACE project is defined as (1) the acquisition, construction, capital lease, installation, or modification of an energy efficiency improvement, renewable energy system, electric vehicle charging infrastructure, flood resistant construction improvement, or hurricane resistant construction improvement; (2) a microgrid or district heating and cooling system in which a property owner participates for the duration of the C-PACE assessment; or (3) a power purchase agreement with respect to a renewable energy system affixed to a property. The properties that are eligible for C-PACE financing are industrial, agricultural, or commercial properties; residential properties containing five or more dwelling units; common areas of condominiums and other planned real estate developments; and properties owned by a tax-exempt or nonprofit entity, including, schools, hospitals, institutions of higher education, and religious institutions.

The new program will provide a reliable mechanism for funding up-front costs associated with clean energy improvements, and may come with a host of additional benefits such as decreased interest rates and longer repayment terms.