A downtown Anchorage business expects to save tens of thousands of dollars a year in energy costs under a loan program that’s new to Alaska and that officials say requires little or no money up front for clean energy upgrades to commercial properties.
RIM Investments is the first company in Alaska to take out a loan under the program, called C-PACE, or Commercial Property Assessed Clean Energy, according to officials from the City of Anchorage’s C-PACE program. The program is already in place in many parts of the Lower 48.
RIM is borrowing $680,000 from Connecticut-based Nuveen Green Capital to improve the energy efficiency of its four-story building at Seventh Avenue and G Street next to City Hall, which features a new mural and companies such as RIM Architects and UPS.
Larry Cash, co-owner of RIM Companies, said improvements to be made in the coming months include the installation of a small rooftop cogeneration system that will combine the building’s heat and power using gas natural, as well as LED lights, a new water heater and a thermostat that lowers the heat when the building is not occupied.
Energy savings of around 40% will more than cover the cost of the loan, he said.
“They will be important,” Cash said.
City officials who administer the program said other commercial property owners are seeking similar loans.
The loan can pay for projects such as wind turbines, solar panels and other energy efficiency improvements, said Melanie Lucas-Conwell, co-administrator of Anchorage’s C-PACE program.
Eligible properties including commercial buildings, warehouses and multi-family dwellings with four or more units, she said.
“It’s good for our local economy, jobs and business growth,” she said in a statement from the municipality on Monday.
“We hope this is the first of many clean energy projects in Anchorage funded through this innovative program,” Mayor Dave Bronson said in the statement.
The program makes it easier to get a loan from a lending institution based on the savings that energy upgrades will bring, said Shaina Kilcoyne, also co-administrator of the C-PACE program.
Under the program, the city allows a lending institution to issue the loan secured by a lien on the property. This allows the lender to provide a long-term, low-interest loan without requiring the property owner to provide a down payment or other upfront fees, Kilcoyne said.
“You can do this without any direct investment,” she said.
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More than 35 states have passed legislation authorizing the program in their state, including the Alaska legislature in 2017. “There have been no foreclosures as a result of C-PACE in the Lower 48 after billions of investment dollars,” Kilcoyne said.
The Anchorage Assembly amended the municipal code to bring the program to Anchorage in 2020. The municipality administers the only program in Alaska. Other local governments across the state are expected to create their own programs.
This year, the Legislature also expanded opportunities in Alaska, so lenders can provide loans for commercial properties involving new construction and for resiliency projects such as earthquake and fire preparedness or recovery. , Lucas-Conwell said. The expansion will be implemented in Anchorage next year and could help spur construction of new multi-family housing in Anchorage, she said.
Chris Rose of the Renewable Energy Alaska Project said C-PACE loans are a convenient way for commercial building owners to make buildings more energy efficient, productive and comfortable.
“This first loan is exciting because it will demonstrate to other building owners in the city that there is an opportunity to borrow money at an affordable price for these kinds of projects,” he said.
Cash said his payments for the loan would be made to the city, like a property tax payment, under a special assessment by the city. The city will pay the bank.
Cash said he started trying to get a C-PACE loan about two years ago. He said his building was old and inefficient. He contacted his mortgagee, Anchorage-based Northrim Bank, which worked on the loan with Nuveen. He also contacted the city’s C-PACE program.
He had to hire an energy auditor to detail the energy savings that are fundamental to the loan, he said. But the costs of the audit are built into the loan, he said.
“It’s just a no-brainer,” he said of the program. “It reduces the energy used by the building, reduces the carbon footprint, so you get all the benefits of greater efficiency from an energy use perspective.”
The city is working with other Alaska municipalities looking to adopt the program, Kilcoyne said.
Alaska’s housing stock is aging and in need of improvements, Kilcoyne said.
“It offers an opportunity for economic development when we really need it. It can improve our housing stock for decades to come,” she said.