Sussex joins clean energy financing partnership

Energize Delaware recently announced that Sussex and Kent counties have joined New Castle County as partners in the Delaware Property Assessed Clean Energy program.

PACE is a managed initiative that allows commercial and industrial property owners to finance energy-efficient and clean energy projects that will lead to significant energy cost savings. Projects that qualify under the statewide PACE program will be financed through a voluntary assessment on property tax bills similar to a sewer or other benefit assessment.

PACE in Delaware is an open-market model, using private capital to finance all projects; no taxpayer dollars will be used for financing. With the recent addition of Kent and Sussex, this benefit is now available to every commercial or industrial business across the state. Complete background information is available at delawarecpace.org.

“This is a great step for the commercial and industrial sectors here in Sussex County, and one more tool to advance economic development and strengthen Delaware’s economy,” said William Pfaff, economic development director for Sussex County. “Certainly, the past year has been a challenging economic period for all of us, especially businesses. By endorsing programs such as D-PACE, the county becomes a more attractive place to do business, giving investors a competitive edge in lowering their energy costs. While that saves them money that can be infused back into the economy in other forms, it also means more energy-efficient buildings. In the end, it’s a win for investors, for the economy, and for the environment. That spells success all the way around for Sussex County.”

“Enabling businesses to make clean and sustainable energy choices in a way that is manageable and affordable is good for business, good for the environment, and promotes community health and well-being,” said Kent County Administrator Michael Petit de Mange.

D-PACE is designed to help qualifying commercial, industrial, agricultural, nonprofit and multifamily property owners access long-term financing for the installation of qualifying energy improvements. Such improvements may include any construction, renovation or retrofitting of energy-efficient technology, clean energy systems, or qualifying waste heat recovery technologies that are permanently fixed to qualifying commercial property.

D-PACE financing is provided by private capital providers in an open market. The financing is secured through a voluntary benefit assessment and assignable lien that is levied against the owner’s property.

The financing term is based on the useful life of the improvements and can extend up to 25 years. The financing can cover up to 100 percent of a building’s project cost and often requires no money down. In many cases, the project’s annual energy savings will outweigh the annual D-PACE payments, which creates positive cash flow for the owner.

Since starting the D-PACE program in New Castle county in 2019, businesses have received a total of $6.9 million in two separate financing deals.

“We have worked hard for a number of years to develop the PACE program for Delaware. It is very rewarding to now be able to say this is a statewide endeavor,” said Tony DePrima, executive director for Energize Delaware. “The result is a program that will allow each county to participate without adding a substantial administrative burden and makes it easy for interested business owners to finance energy efficiency and renewable energy projects. We welcome the Kent and Sussex administrations in rounding out Delaware’s full county involvement.”

D-PACE will benefit a broad range of stakeholders that utilize D-PACE financing. Property owners can reduce their energy costs and may improve the value of their building, all with no upfront, out-of-pocket costs. Contractors can close more projects and grow their business. Developers can fill gaps in their financing plan.

Capital providers will receive new secure financing opportunities. Mortgage holders will benefit from an improved asset; additionally, the increased cash flow of a typical project may strengthen the owner’s repayment ability and reduce mortgage default risk. The community will enjoy new investment, and residents may enjoy more job opportunities, greater energy savings, and improved air quality, all financed with private capital, not taxpayer dollars.