Getting Ready for PACE in New Jersey (Part 7)*

In Part 6 of this series, we discussed the option for municipalities and counties to establish their own local C-PACE programs, following the NJEDA’s guidelines.

The next section of the law addresses financing, including retroactive financing:

Financing for the implementation of C-PACE projects, including the refinancing of an investment in an existing improvement that qualifies as a C-PACE project, provided the existing improvement was completed no more than three years prior to the submission of an application to the Garden State C-PACE program or local C-PACE program for the financing, shall be made available to property owners in exchange for a C-PACE assessment on the property. The C-PACE assessment shall be used to repay the financing.

It then goes on to spell out the provisions for towns and counties to issue bonds; counties and towns may apply to use County Improvement Authority bonds or, in the case of authorized municipalities, issue their own bonds to finance C-PACE improvements. In either case, these are to be “revenue bonds” backed by one or more C-PACE assessments. Stated explicitly,

Bonds issued by a participating municipality or county improvement authority shall be non-recourse obligations of the issuer and shall not be considered to be direct and general obligations of the issuer, or the State of New Jersey or any political subdivision thereof.

Municipalities must also allow direct private financing:

The authority shall allow capital providers to directly finance project costs for C-PACE projects, or for such costs to be financed through bond issuance.

This financing shall not be guaranteed by the municipality or by the state.

Property owners installing renewable systems such as solar may assign any of their renewable energy certificates or credits to the entity providing the financing.

This concludes our analysis of the law. Subsequent posts will address the guidelines, rules, and regulations of the program (currently in draft form).

(Series continues)

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*This is a layperson’s interpretation of the statute and should not be construed as legal advice or relied upon without consulting a qualified attorney.

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