The New Jersey Economic Development Authority (EDA) is expected to soon release regulations implementing the New Jersey Commercial Property Assessed Clean Energy (C-PACE) program, which will apply to commercial and institutional entities including hospitals and medical facilities.
Adopted on August 24, 2021, the C-PACE law establishes a mechanism to finance, among other things, commercial renewable energy projects, energy efficiency initiatives, electric vehicle charging stations, microgrids, power purchase agreements, as well as water efficiency and other authorized improvements where “capital providers” pay the upfront costs of the project and are then repaid through a real property assessment levied by the participating municipality. Under the program, the municipality assigns to the capital provider the real property assessment through an assignment agreement. A capital provider is defined as including “an accredited investor or qualified institutional buyer” as defined in the applicable federal regulations, as well as commercial lending institutions.
The C-PACE program is expected to be a popular option for healthcare sector and other commercial and institutional properties looking to rehabilitate facilities or adopt clean energy initiatives while seeking to avoid the upfront capital expenditures typically required for such projects. The program will become available once the regulations are adopted and the EDA publishes various required form documents. While the regulations were originally expected to be introduced earlier this summer, they remain pending but are anticipated shortly.