NJ Lawmakers Pass Landmark C-PACE Bill

TRENTON, N.J. - June 28, 2021 - PRLog -- On June 24 the New Jersey Legislature approved A2374/S1953 with overwhelming, bipartisan majorities in both the Assembly and Senate. The C-PACE (Commercial Property Assessed Clean Energy) bill establishes the Garden State C-PACE Program, to be developed and overseen by the New Jersey Economic Development Authority (NJEDA).
The bill was sponsored by Assemblyman Raj Mukherji (D-Jersey City) and Senators Bob Smith (D-Piscataway) and Kip Bateman (R-Somerset).  This represents the culmination of a ten-year effort by New Jersey PACE (NJPACE), a 501c3 nonprofit organization, to amend NJ's unworkable 2011 PACE (Property Assessed Clean Energy) statute.
The legislation establishes a program that, through a municipal ordinance, allows commercial property owners to privately finance energy efficiency, renewables and resiliency projects and repay them over time through a special assessment on the property tax bill, similar to a sidewalk or sewer assessment. These projects are 100% financed with private sector capital—no taxpayer or public monies are used.
The NJ Economic Development Authority (NJEDA) is assigned administrative responsibility for the C-PACE program. No later than 270 days after Governor Murphy's signing, NJEDA will publish rules and regulations for existing buildings, and 30 days later, for new construction and retroactive financing (projects completed within 3 years of their application). The top third of municipalities, by population, can establish local programs that conform to the NJEDA program. In the meantime, some projects can be approved by special exception by the Director of Local Government Services under the existing statute (PL2011, Ch.187)
What does the C-PACE law enable?
C-PACE can finance 100% of the hard and soft costs of energy efficiency, renewable energy, and resiliency projects. Projects are designed to be cash-flow positive from the start with low-cost, fixed-rate, long-term capital (up to 30 years, based on the average useful life of the improvements). Commercial property owners collect available incentives from federal, state, and local governments, so the financing covers the remaining costs. C-PACE capital is non-recourse, non-accelerating, transferable, and often treated as an off-balance sheet operating expense. The consent of the mortgage lender(s) is required.
Eligible improvements under the new bill include energy efficiency (lighting, HVAC, motors, windows, insulation, roofs, etc.); solar, wind, geothermal, and other forms of renewable energy; energy storage, microgrids, water conservation, stormwater, flood- and hurricane-resistant construction improvements; and electric vehicle charging infrastructure.
For more information, see http://NewJerseyPACE.org.