Displayed below is a list of Frequently Asked Questions (FAQs). Click on the “>” icon associated with each question to view the answer.


Renewable Energy Contractors FAQs

What is Arlington C-PACE?

Arlington C-PACE is a program that helps building owners access private-sector financing to upgrade their building with energy efficiency, clean energy, and water efficiency improvements. With C-PACE, building owners receive up to 100 percent financing with attractive repayment terms consistent with the useful life of the improvements (up to 25 years). This typically enables them to undertake large building modernization projects that addresses multiple deficiencies.

In well-designed C-PACE projects, the energy cost savings exceed the PACE payments, creating a cash-flow-positive project. By using C-PACE, building owners can reduce their operating costs, improve the value and competitiveness of their building, meet energy performance goals, and increase their cash flow. C-PACE is also available to developers with new construction projects if they design their building to exceed current energy codes.

Repayment is secured by a voluntary special assessment, similar to a sewer assessment, that is recorded on the improved property and repaid to the private capital provider over the financing term (up to 25 years). In most cases, the energy cost savings exceed the assessment payment, thereby enabling capital-intensive equipment upgrades and cash-flow-positive projects. Because the C-PACE assessment obligation remains with the property, the assessment can transfer to the next owner when the property is sold.

Who administers Arlington C-PACE?

After a competitive bidding process, Arlington County selected Sustainable Real Estate Solutions, Inc. (SRS) to serve as the Arlington C-PACE program administrator.

Which Arlington County department is responsible for C-PACE?

The Arlington County Department of Environmental Services’ Arlington Initiative to Rethink Energy (AIRE) team is spearheading the C-PACE program.

What are the benefits of the Arlington County C-PACE program?

Arlington County’s C-PACE program benefits multiple stakeholders.

  • Building owners reduce their energy costs, increase their cash flow, and improve the value of their building—all with no upfront, out-of-pocket costs
  • Contractors grow their business by closing more projects
  • Capital providers receive more opportunities to fund attractive, finance-ready projects
  • Developers can reduce their equity contribution or other forms of high-cost capital with no upfront, out-of-pocket expense
  • Mortgage holders benefit from an improved asset; plus, the increased cash flow strengthens the owner’s repayment ability and reduces mortgage default risk
  • Communities enjoy local job growth, improved building stock, and reduced greenhouse gas emissions—all financed with private capital, and not taxpayer dollars.
What are the county’s responsibilities?

Arlington County is responsible for program oversight in collaboration with the program administrator, SRS.

Do mortgage holders typically embrace C-PACE projects?

Yes, because mortgage holders have two main concerns: 1) the borrower’s ability to repay the loan and 2) the value of the collateral, and C-PACE positively impacts them both. Since most C-PACE projects not only generate positive cash flow from the energy savings, but also increase the value of the building, well-designed projects typically gain mortgage holder consent.

View a list of lenders who have consented to C-PACE.

What is the program administration fee for each project?

The Arlington C-PACE program will be self-financed thorugh program fees charged to participating property owners. A one-time program administration fee, equal to 2.5 percent of the project finance amount, not to exceed $75,000 per project, is applied to each financed project.

Does a contractor need any special licensing or certification to participate in the program?

All contractors must be in compliance with state and local license requirements. In addition, you must register with the program, which you can do by attending one of the recurring Arlington C-PACE contractor training workshops . There is no charge for attending these sessions. View a calendar of upcoming workshops.

How do I get started?

Arlington C-PACE provides regularly scheduled training workshops for contractors free of charge. Visit the Events page for the schedule or email va@paceworx.com.

How does the process work?

Once your company becomes a registered Arlington C-PACE contractor, you will work with the C-PACE program director to:

  • Select and prequalify buildings,
  • Perform preliminary project scoping,
  • Prepare proposals and review them with the building owner,
  • Develop and optimize project scenarios,
  • Conduct project technical reviews, and
  • Install the energy improvements.

For more information on how the process works, refer to the User Guide.

How long does it take to prepare a project for submission to Arlington C-PACE?

It depends on the complexity of the project. Single ECMs take just a few days. Complex projects that require audits and/or detailed engineering can take six to eight weeks.

How long does it take to get a project financed after an application is submitted?

Timeframes are project-specific and depend on the number of parties involved. In a C-PACE project, the contractor, mortgage holder, and capital provider establish their own schedules with the building owner. Once a project has been approved for financing, it typically takes an average of 60 days to close.

Is the construction contract between the contractor and the owner?

Yes.

When does a contractor get compensated?

After a project has been reviewed by the program administrator and approved by the building owner and mortgage holder (if any), participating capital providers are offered the opportunity to finance the project. The capital provider (selected by the owner) will review the project documentation (provided by the program administrator and the owner), prepare a Financing Agreement, and schedule the closing. Funds to initiate construction will be disbursed as provided in the financing agreement.

What is the savings-to-investment ratio (SIR)?

The SIR tells all stakeholders whether a project will be cash-flow-positive. It is calculated by dividing the projected energy cost savings over the finance term by the total installed cost of the project, including the cost of equipment, installation, and financing.

While the Arlington C-PACE ordinance does not require any SIR criteria, the program strongly encourages projects with an SIR>1 for the following reasons:

  • Building owners are more likely to commit to projects that are cash-flow positive
  • Mortgage holders are more likely to provide consent for projects that show positive cash flow
  • Capital providers look favorably on projects that show positive cash flow
  • In general, the higher the SIR, the greater the demonstrated environmental benefits of the project, helping to promote the goals for the Arlington C-PACE program and the Community Energy Plan.
How are the energy savings calculated for solar-only projects?

A solar PV feasibility study must be prepared for any project that includes a solar PV installation. For multi-ECM projects, the contractor providing the non-solar ECMs should refer to the Audit Requirements section of the Arlington C-PACE User Guide. The methodology used for the savings projections is determined during the project development stage. In most cases, an ASHRAE Level I will suffice. For single ECMs such as a boiler replacement, the required documentation can be less comprehensive; however, it should facilitate an SIR calculation.

As is the case for all new and innovative programs, we anticipate a learning curve. Therefore, the program administrator will provide tools and support services to streamline the project submission, review and approval process. Regardless of the feasibility study and/or audit level, energy use data collection should comply with the ASTM E2797-15 Building Energy Performance Assessment (BEPA) Standard.

How many years of utility data do I need to establish the energy use baseline?

Three years of utility data are preferred with a minimum of one year, during which time no major renovations should have taken place. For more information, email va@paceworx.com.

How do I estimate the baseline energy use for a building that is partially vacant?

This scenario requires modeling. For more information, email va@PACEworx.com.

Can roof repair or structural work be financed?

Yes. These costs are added to the costs of the solar installation and will reduce the SIR.

Do the projected energy savings need to be normalized for weather conditions?

Yes. Since the energy savings are projected and future weather conditions are unknown, energy savings are projected using average conditions. These projections create baselines for the status quo (which assumes ECMs have not been installed) and for the projected case (which assumes the recommended ECMs have been installed).

For roof-mounted systems, what is required to confirm a roof will handle the additional load?

All roof-mounted systems require an assessment and sign-off by a roofing contractor and a structural engineer. For more information refer to Solar Feasibility Study section in the Arlington C-PACE User Guide or email va@paceworx.com.

Can I include demand savings?

Yes, but these savings must be directly related to the projected solar energy production.

Can electricity/fuel-cost escalation factors be used that are higher than the published default factors?

While the default electricity/fuel-cost escalation factors, which are based on industry best practice, should be used, the program administrator will consider higher factors if the contractor submits the rationale for, and the calculations used, to arrive at a different cost escalation factor.

Can performance degradation factors be used that are lower than published default factors?

Yes, although the default system performance degradation factor, which is based on industry best practice, should be used. To use a lower factor, the contractor must submit a rationale for, and the calculations used, to arrive at a different performance degradation factor.

Do I need a Letter of Agreement from the utility to take credit for a utility incentive?

Yes.

Who determines the value MACRS?

The value of the MACRS must be provided by the prospective owner or his/her accountant.

Can the solar investment tax credit (ITC) include the roof upgrade?

No.

Will a project with an SIR<1.0 receive financing?

Yes, but there are hurdles. First, the owner would have to agree to a proposal that is not cash-flow positive. Next, the mortgage holder will have to consent. This should be discussed early in the process to minimize the chance that a project will fail after it has been developed.

What can be done to raise a SIR that is less than 1.0?

There are many factors that can be adjusted, including cost, anticipated energy production, the potential use of tax credits, MACRS depreciation, and utility incentives. In addition, an owner can directly invest in a project to reduce the financed amount and thereby increase the SIR. The program administrator can model different scenarios to find one that will appeal to the owner and the mortgage holder.

How do I deal with the inverter warranty over the finance term?

The cost of the inverter (extended) warranty should be included in the cost of the project.

Can I use a different solar PV electricity production model than PVWatts?

Yes. For more information, refer to the Arlington C-PACE User Guide or email va@paceworx.com.

Can the program administrator help me prepare an application?

Yes, the program administrator can and will assist in the preparation of an application, if needed.

Will the program administrator attend meetings with the building owner?

Yes. The program administrator routinely attends meetings with building owners and their contractors to support the program and respond to C-PACE related questions.

Can I use the ITC and MACRS even if I have a utility incentive?

Yes.

What do you consider a reasonable de-rate factor for the solar PV model?

0.5 percent. A proposed de-rate factor that is less than 0.05 percent must be supported by data from the system’s manufacturer. In consultation with the solar contractor, any such proposal will be reviewed and either approved, modified or rejected by the program administrator.

What should the commissioning plan include?

The system commissioning plan is intended to confirm that the proposed ECMs have been installed according to manufacturers’ guidelines and that the system will perform as expected. Contractors are required to prepare a commissioning report and submit it to the owner and the program administrator. It should include as-built drawings, O&M manuals for each ECM, and a narrative appropriate for the size and complexity of the project.

Can Arlington C-PACE finance a battery energy storage system with the solar PV system?

Yes.

Why does the C-PACE program require the submission of solar system components cut sheets?

The program administrator relies on cut-sheet data, which is combined with other project data included in the solar feasibility study, to confirm a project’s eligibility.

Energy Efficiency Contractors FAQs

What is Arlington C-PACE?

Arlington C-PACE is a program that helps building owners access private-sector financing to upgrade their building with energy efficiency, clean energy, and water efficiency improvements. With C-PACE, building owners receive up to 100 percent financing with attractive repayment terms consistent with the useful life of the improvements (up to 25 years). This typically enables them to undertake large building modernization projects that addresses multiple deficiencies.

In well-designed C-PACE projects, the energy cost savings exceed the PACE payments, creating a cash-flow-positive project. By using C-PACE, building owners can reduce their operating costs, improve the value and competitiveness of their building, meet energy performance goals, and increase their cash flow. C-PACE is also available to developers with new construction projects if they design their building to exceed current energy codes.

Repayment is secured by a voluntary special assessment, similar to a sewer assessment, that is recorded on the improved property and repaid to the private capital provider over the financing term (up to 25 years). In most cases, the energy cost savings exceed the assessment payment, thereby enabling capital-intensive equipment upgrades and cash-flow-positive projects. Because the C-PACE assessment obligation remains with the property, the assessment can transfer to the next owner when the property is sold.

Who administers Arlington C-PACE?

After a competitive bidding process, Arlington County selected Sustainable Real Estate Solutions, Inc. (SRS) to serve as the Arlington C-PACE program administrator.

Which Arlington County department is responsible for C-PACE?

The Arlington County Department of Environmental Services’ Arlington Initiative to Rethink Energy (AIRE) team is spearheading the C-PACE program.

What are the benefits of the Arlington County C-PACE program?

Arlington County’s C-PACE program benefits multiple stakeholders.

  • Building owners reduce their energy costs, increase their cash flow, and improve the value of their building—all with no upfront, out-of-pocket costs
  • Contractors grow their business by closing more projects
  • Capital providers receive more opportunities to fund attractive, finance-ready projects
  • Developers can reduce their equity contribution or other forms of high-cost capital with no upfront, out-of-pocket expense
  • Mortgage holders benefit from an improved asset; plus, the increased cash flow strengthens the owner’s repayment ability and reduces mortgage default risk
  • Communities enjoy local job growth, improved building stock, and reduced greenhouse gas emissions—all financed with private capital, and not taxpayer dollars.
What are the county’s responsibilities?

Arlington County is responsible for program oversight in collaboration with the program administrator, SRS.

Do mortgage holders typically embrace C-PACE projects?

Yes, because mortgage holders have two main concerns: 1) the borrower’s ability to repay the loan and 2) the value of the collateral, and C-PACE positively impacts them both. Since most C-PACE projects not only generate positive cash flow from the energy savings, but also increase the value of the building, well-designed projects typically gain mortgage holder consent.

View a list of lenders who have consented to C-PACE.

What is the program administration fee for each project?

The Arlington C-PACE program will be self-financed thorugh program fees charged to participating property owners. A one-time program administration fee, equal to 2.5 percent of the project finance amount, not to exceed $75,000 per project, is applied to each financed project.

Does a contractor need any special licensing or certification to participate in the program?

All contractors must be in compliance with state and local license requirements. In addition, you must register with the program, which you can do by attending one of the recurring Arlington C-PACE contractor training workshops . There is no charge for attending these sessions. View a calendar of upcoming workshops.

How do I get started?

Arlington C-PACE provides regularly scheduled training workshops for contractors free of charge. Visit the Events page for the schedule or email va@paceworx.com.

How does the process work?

Once your company becomes a registered Arlington C-PACE contractor, you will work with the C-PACE program director to:

  • Select and prequalify buildings,
  • Perform preliminary project scoping,
  • Prepare proposals and review them with the building owner,
  • Develop and optimize project scenarios,
  • Conduct project technical reviews, and
  • Install the energy improvements.

For more information on how the process works, refer to the User Guide.

How long does it take to prepare a project for submission to Arlington C-PACE?

It depends on the complexity of the project. Single ECMs take just a few days. Complex projects that require audits and/or detailed engineering can take six to eight weeks.

How long does it take to get a project financed after an application is submitted?

Timeframes are project-specific and depend on the number of parties involved. In a C-PACE project, the contractor, mortgage holder, and capital provider establish their own schedules with the building owner. Once a project has been approved for financing, it typically takes an average of 60 days to close.

Is the construction contract between the contractor and the owner?

Yes.

When does a contractor get compensated?

After a project has been reviewed by the program administrator and approved by the building owner and mortgage holder (if any), participating capital providers are offered the opportunity to finance the project. The capital provider (selected by the owner) will review the project documentation (provided by the program administrator and the owner), prepare a Financing Agreement, and schedule the closing. Funds to initiate construction will be disbursed as provided in the financing agreement.

What is the savings-to-investment ratio (SIR)?

The SIR tells all stakeholders whether a project will be cash-flow-positive. It is calculated by dividing the projected energy cost savings over the finance term by the total installed cost of the project, including the cost of equipment, installation, and financing.

While the Arlington C-PACE ordinance does not require any SIR criteria, the program strongly encourages projects with an SIR>1 for the following reasons:

  • Building owners are more likely to commit to projects that are cash-flow positive
  • Mortgage holders are more likely to provide consent for projects that show positive cash flow
  • Capital providers look favorably on projects that show positive cash flow
  • In general, the higher the SIR, the greater the demonstrated environmental benefits of the project, helping to promote the goals for the Arlington C-PACE program and the Community Energy Plan.
How are the energy savings calculated for proposed ECM?

The methodology for the savings projections is determined during the project development stage. In most cases, an ASHRAE Level I or II Audit will suffice. For single ECMs, such as a boiler replacement, the required documentation can be less comprehensive; however, it should facilitate an SIR calculation. For more information, refer to the Arlington C-PACE User Guide.

As is the case for all new programs, a learning curve is expected. Therefore, the program administrator will provide tools and support to streamline the project submission, review and approval process. Regardless of the audit level, energy use data collection should comply with the ASTM E2797-15 Building Energy Performance Assessment (BEPA) Standard.

Which ECMs are eligible for Arlington C-PACE financing?

The following list of typical, proven energy efficiency technologies is intended as a reference. The program administrator will review other proposed ECM(s) on a case-by-case basis.

Energy efficiency

  • Automated building controls (BMS, EMS)
  • Boilers, chillers and furnaces
  • Building envelope (insulation, glazing, windows, etc.)
  • High efficiency lighting
  • HVAC upgrades
  • New roof (if it will result in energy savings)
  • Variable speed drives on motors, pumps and fans
  • Water heating systems

Renewable energy

  • Combined heat and power (CHP) systems
  • Fuel cells
  • Geothermal systems
  • Hydroelectric systems
  • Roof (if used to support a solar PV system)
  • Small wind systems
  • Solar PV
  • Solar thermal

Water conservation

  • Irrigation systems
  • Low-flow fixtures (faucets, toilets, etc.)

Other eligible expenses

  • Commissioning costs
  • Construction costs related to an eligible improvement
  • Energy audit costs
  • Engineering and design expenses
  • Measurement & verification costs
  • Permit fees
  • Renewable energy feasibility study costs

This list is not comprehensive. Any improvements that result in utility cost savings and that meet other program criteria will be considered. See the Arlington C-PACE User Guide for more information.

How many years of utility data do I need to establish the energy use baseline?

Three years of utility data are preferred with a minimum of one year, during which time no major renovations should have taken place. For more information, email va@paceworx.com.

How do I estimate the baseline energy use for a building that is partially vacant?

This scenario requires modeling. For more information, email va@PACEworx.com.

Can a non-energy-saving measure be financed?

Yes, provided it is related to water conservation, environmental health & safety, or a specific ECM. For instance, a roof or structural repair that is needed to support a solar system is eligible. The costs for such work will be added to the costs of the solar installation. These additional costs will reduce the SIR.

What building simulation model should I use to determine the energy savings in a multi-ECM project?

The most common include DOE’s eQuest and EnergyPro, although other models such as Trane’s Trace 700 and Carrier’s HAP model are also acceptable.

Do the projected energy savings need to be normalized for weather conditions?

Yes. Since the energy savings are projected and future weather conditions are unknown, energy savings are projected using average conditions. These projections create baselines for the status quo (which assumes ECMs have not been installed) and for the projected case (which assumes the recommended ECMs have been installed).

Should the energy savings be evaluated over the system’s estimated lifetime rather than just over the finance term?

Energy savings are calculated over the expected useful life of a specific ECM. In projects that incorporate multiple ECMs, the weighted useful life of the multiple ECMs is calculated and used to determine the maximum allowable finance term.

Can electricity/fuel-cost escalation factors be used that are higher than the published default factors?

While the default electricity/fuel-cost escalation factors, which are based on industry best practice, should be used, the program administrator will consider higher factors if the contractor submits the rationale for, and the calculations used, to arrive at a different cost escalation factor.

Can performance degradation factors be used that are lower than published default factors?

Yes, although the default system performance degradation factor, which is based on industry best practice, should be used. To use a lower factor, the contractor must submit a rationale for, and the calculations used, to arrive at a different performance degradation factor.

Will a project with an SIR<1.0 receive financing?

Yes, but there are hurdles. First, the owner would have to agree to a proposal that is not cash-flow positive. Next, the mortgage holder will have to consent. This should be discussed early in the process to minimize the chance that a project will fail after it has been developed.

What can be done to raise a SIR that is less than 1.0?

There are many factors that can be adjusted, including cost, anticipated energy production, the potential use of tax credits, MACRS depreciation, and utility incentives. In addition, an owner can directly invest in a project to reduce the financed amount and thereby increase the SIR. The program administrator can model different scenarios to find one that will appeal to the owner and the mortgage holder.

Why does the Arlington C-PACE program require the submission of ECM cut-sheets?

Cut sheets provide a wealth of data from the OEM manufacturer. The program administrator uses this data, combined with other project data, to confirm project eligibility.

Can the program administrator help me prepare an application?

Yes, the program administrator can and will assist in the preparation of an application, if needed.

Will the program administrator attend meetings with the building owner?

Yes. The program administrator routinely attends meetings with building owners and their contractors to support the program and respond to C-PACE related questions.

What should the commissioning plan include?

The system commissioning plan is intended to confirm that the proposed ECMs have been installed according to manufacturers’ guidelines and that the system will perform as expected. Contractors are required to prepare a commissioning report and submit it to the owner and the program administrator. It should include as-built drawings, O&M manuals for each ECM, and a narrative appropriate for the size and complexity of the project.