The Colorado Senate has passed SB 212 to create a commercial property-assessed clean energy (CPACE) program that would give Colorado commercial property owners access to loans for energy efficiency projects.

Through the CPACE program, businesses could finance energy projects upfront and save on their electricity costs, as they pay back the loans.

Here’s how the CPACE program would work:

• Commercial property owners will voluntarily opt into a PACE district, which is an improvement district.
• The business will specify the cost of the energy project it wants, such as HVAC, refrigeration or hot water solar, for example.
• The district will issue a bond to fund the project.
• The district sells the bond to an investor.
• The business pays off the bond in installments, as it saves money through energy efficiency.

SB 212 must now go to the House of Representatives for consideration.

In June 2012, the Connecticut legislature established a CPACE program for the state’s commercial and industrial property market. A whitepaper “Underwriting Energy Efficiency Financing in the Innovative Connecticut PACE Program” found that PACE financing has lots of upside for commercial real estate owners.