Sonoma County real estate owner taps C-PACE financing for Guayaki Yerba Mate solar installation
Installing renewable energy is often expensive, but North Bay business and property owners are taking advantage of a little known program that eases the financial burden.
Guayakí Yerba Mate, a drink maker based in Sebastopol, along with the owner of its building, Highway Partners LLC, recently took advantage of Sonoma County’s property assessed clean energy program, or PACE, which allows property owners to finance permanent energy or water improvements, using county cash to finance the initial improvements. The debt is then repaid through a property tax lien over several years.
According to Sonoma County, the rooftop solar system is expected to satisfy up to 95% of Guayakí’s electric demand and is adding 60 kilowatt of renewable power to the regional electric grid.
Most PACE funded improvements happen on residential property, but using commercial PACE, or C-PACE, funding is an attractive option for building owners and tenants in some cases, but is not necessarily the best option for every business, according to Woolsey McKernon, managing director at CleanFund, a private provider of PACE funding based in Sausalito. Building owners have to consider where the initial money is coming from to finance the improvements that have to be paid back and factor in issues including how long they intend to stay invested in a property.
Using PACE financing can be attractive to property owners since they can often pay back the loans over a longer period, sometimes up to 30 years, and potentially pass on some of the cost of the improvements on to tenants, according to McKernon.
McKernon noted for some property owners the long-term repayment period for C-PACE loans makes them less attractive because not every owner intends to hold onto a property long enough to reap the benefits.
“What’s interesting to them is buying and selling,” he said, noting “environmental upgrades are just not first and foremost in property owners’ minds.”
McKernon’s company recently closed the financing for C-PACE-funded improvements at the Corison Winery in St. Helena and has worked on financing solar-powered improvements at SOMO village, formerly Sonoma Mountain Village, a business park in Rohnert Park.
Last year San Rafael-based Seagate Properties also inked a 30-year C-PACE loan through CleanFund for upgrades to two of its Marin office buildings.
Seagate installed a 76,000-kilowatt solar electricity array on its 32,000-square-foot 3030 Bridgeway building in Sausalito. At its 11,300-square-foot headquarters building at 980 Fifth Ave. in San Rafael Seagate also installed a 49,600-kilowatt photovoltaic array plus a new roof and more-energy-efficient boilers, chillers and mechanical systems.
Improvements that increase energy efficiency like solar power and more efficient boiler systems make sense for companies like CleanFund to fund and for property owners to invest in since they create savings over the longer term. But McKernon said other improvements, like hardening against wildfires and earthquakes, don’t have the same margins and are less attractive.
Providing financing for fire protection “doesn’t really move the needle” while seismic improvements do not create a return other than allowing a business owner to maintain insurance, he said.
“You spend the money and you don’t get anything back other than returning tenants,” McKernon added.