Richmond may join Virginia's C-PACE green financing program
The loans, which come from private lenders, can be assessed against a commercial property in liens.
The City of Richmond is preparing to join a statewide program that encourages developers to invest in on-site renewable energy, energy efficiency and water conservation measures.
Commercial Property Assessed Clean Energy, or C-PACE, loan financing is available to property owners in participating localities to cover the upfront costs of those improvements. Everything from apartment buildings with five or more units to data centers, hotels and offices are eligible — though condominiums and smaller apartment buildings are not covered.
The financing can be used for a wide variety of upgrades or new construction projects. Solar panels, battery systems, wind turbines, lead pipe remediation, energy efficient lighting and HVAC systems, energy recovery systems, rain and gray water collection systems — all of these and many more count. C-PACE loans are repaid over the average lifespan of the improvements — usually in the 20- to 30-year range.
The unique thing about C-PACE is that the loans, which come from private lenders, are assessed against a property in liens.
Abigail Johnson is executive director of the Virginia PACE Authority, a nonprofit tasked with overseeing the program statewide. She told VPM News the lien format means developers can get a loan with no money down, and don’t have to worry about repaying if they sell the property — the obligation falls on whoever owns the property.
“[You don’t have to] do a project that has return on investment in two years,” Johnson said. “You can put on a new roof and new solar... sell it in two years and then the next property owner would continue to make the payments.”
To her, that means property owners can invest in something without worrying whether they’ll see a return right away.
Laura Thomas, head of Richmond’s sustainability office, told City Council members earlier this month that there’s local interest in the program.
“There are community members — business owners — who would like to enter into the program, who have been waiting,” Thomas said.
Johnson sees potential uses for the financing in Richmond, which has set a range of goals to reduce carbon emissions and reduce the city’s environmental impacts. She says old buildings that need remediation for asbestos, lead pipes or other environmental and health hazards are good candidates.
“I think it could really help from that perspective, you know, improve environmentally the buildings, it’s gonna help the folks living in the buildings,” Johnson said.
Richmond has had a C-PACE ordinance on the books since 2019. Johnson said the city decided to wait for a state program to help guide implementation.
“They really wanted the state involvement,” she said.
Once the program is in place, Johnson said the authority’s challenge will be informing local property owners that this financing is available.
“It’s not supposed to just be a program where national lenders and developers come in, it’s for the community, as well,” she said.
Richmond’s new C-PACE ordinance is scheduled for discussion at Monday’s City Council meeting, though recent changes to the text mean the council will likely have to wait to vote on the measure.
The changes include:
- giving lenders debt enforcement authority, rather than the city
- setting city attorney fees at 20% or lower, instead of a set 20% rate
- providing the statewide PACE Authority leeway to adjust forms as needed without City Council or administration approval.
Because Richmond City Council has an August recess, a final vote on the measure won’t come until at least September. Representatives for the city did not respond to a request for comment on this story by deadline.
What about my house?
As for the homeowners out there hoping for help with financing energy efficiency measures, rooftop solar and more — they’ll have to wait for any PACE financing. Currently, only three states have residential PACE programs in place. In a Virginia Department of Energy report on residential PACE (R-PACE) financing, the department urged lawmakers to wait until clear data is available from those programs before moving to set one up in the Commonwealth.
“Given its unique features and the sizeable market for clean energy products it has generated, R-PACE should remain under consideration as a tool as it may be able to make a significant contribution to the Commonwealth’s efficiency and renewable energy goals if a satisfactory approach can be identified,” the report stated.
While recommending lawmakers wait, the report also noted existing programs that can cover energy efficiency and other upgrades for limited groups of homeowners.
Some homeowners can take advantage of those other programs. The General Assembly passed a law in 2019 that requires Dominion Energy and Appalachian Power Co. to incentivize low-income, elderly and disabled Virginians to install energy efficiency measures like new windows and insulation.
And 50% of proceeds from Virginia’s involvement in the Regional Greenhouse Gas Initiative are dedicated to energy efficiency improvements for low-income Virginians through programs administered by the Virginia Department of Housing and Community Development. Overall, Virginia has raised $328.5 million for those programs, according to RGGI data.
Although the report states “the DHCD program can expect to have substantial funding moving forward,” that no longer appears to be the case — a state panel moved to end Virginia’s RGGI membership earlier this summer. Gov. Glenn Youngkin’s administration has pushed to take Virginia out of the program, calling it a tax on electric ratepayers with no clear benefits in terms of carbon emissions reductions.
Virginia will remain a RGGI member at least until the end of 2023.