Regenerative Financing is a program of Possible Planet, a 501(c)(3) Nonprofit Organization, based in Basking Ridge and Princeton, NJ.
Our core focus is financing renewable, energy efficiency, and resiliency improvements on all types of commercial, industrial, multifamily, institutional, and agricultural properties.
For the last five years, as New Jersey PACE, we have been the principal advocate, educator, and public-interest spokesperson for PACE in New Jersey, and we now expect PACE to become law within the next year. In the absence of state approval, however, we’ve been working to develop innovative alternatives to PACE, two of which are discussed here.
Clean Energy Finance: PACE, NICCE, & DREEM
Forty percent of the world’s carbon emissions come from buildings, so with appropriate technologies and financing approaches there’s no reason why we can’t reduce our carbon emissions — cutting these emissions in half if not more.
But until recently, the business case for undertaking renewables and energy efficiency improvements has had to overcome a number of obstacles to be accepted by commercial real estate. The principal hurdle has often been access to longterm capital, which is either unavailable through conventional channels or simply committed to other priorities of the business owners. Now, with programs like PACE, NICCE, and DREEM, stakeholder interests and financial incentives are aligned.
PACE (Property Assessed Clean Energy)
There’s no doubt that PACE is a genuine breakthrough in financing clean energy improvements. PACE – Property Assessed Clean Energy – provides 100% off-balance-sheet financing by creating a voluntary special tax assessment that ensures repayment of the improvement costs by the property owner over an extended period.
PACE has now become the fastest-growing sector of finance lending in the country. It’s easy to see why. PACE is a win for everyone:
- The property owner benefits by saving energy, reducing costs, and increasing property value.
- It provides 100% off-balance-sheet financing that is voluntarily attached to the property and collected over the long term (up to 30 years) through a special assessment, and is transferable upon sale;
- The capital provider is able to ensure a long-term, secure and steady return on capital;
- The contractor earns higher revenues and profits by installing more comprehensive, state-of-the-art systems;
- The mortgage holder(s)’ collateral is more valuable and the property owner has greater cash-flow to pay its obligations;
- The public benefits by getting lower carbon emissions, cleaner air, an improved building stock and local JOBS.
If you’re a commercial building owner and can access PACE Financing in your jurisdiction, getting your building up to today’s renewables and energy efficiency standards will save money immediately, improve the value of your property, create jobs, improve the building stock of your community, and lower emissions and improve air quality.
But PACE isn’t available everywhere — and we can’t afford to wait.
New Jersey and other states and jurisdictions that do not yet have PACE are at a disadvantage. There is pent-up demand for the kind of financing that makes it profitable to do clean energy retrofits.
New Alternatives for PACE
We’ve partnered with leading-edge organizations to come up with two alternatives to PACE, where PACE is not yet available.
- NICCE (New Inter-Creditor Clean Energy) Financing, developed in collaboration with a major social impact investment fund, is available for financing, right now. We have a minimum initial pool of $10 million for projects of $1 million+ in New Jersey and select urban centers across the country, and we are seeking additional lenders to broaden our reach to any US location.
- DREEM (Deed-related Renewables & Energy Efficiency Measures) Financing, developed with Ronald Borod of RAM Island Strategies, will commence once we have appropriate lenders. DREEM attaches a special type of energy services contract to the title of the property, providing off-balance sheet upgrade financing for major clean energy retrofits and new buildings.
As these pre-PACE programs take hold, we’ll be priming the pump for PACE, making sure that new buildings have the clean energy financing they need, and that owners of existing buildings can get the financing they need, today, for these important improvements — which incidentally create local jobs, and upgrade and update the overall value and vibrancy of the community.
The main impediment to doing these projects is no longer lack of capital; rather, it is simply a lack of awareness and information. We believe that by providing several kinds of 100% long term financing, we’re doing what we can to accelerate the efficiency, resiliency, and sustainability of our built environment.
“Pre-PACE” Financing for Clean Energy is Now Available
For more information, and to apply, see Get financed.
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RegenerativeFinancing.org is a project of Possible Planet, a 501(c)(3) Nonprofit.
Possible Planet is the umbrella nonprofit for New Jersey PACE, NICCE, DREEM, and the Center for Regenerative Community Solutions (CRCS).
More at PossiblePlanet.org