New Jersey’s property assessed clean energy program for commercial properties, the Garden State C-PACE program, is fully launched as of July 30, 2025. As detailed earlier in this series, PACE is a state-enabled, locally administered program that facilitates up-front financing of certain improvements to commercial properties that promote energy efficiency and sustainability goals. According to PACENation, an advocacy nonprofit association that tracks program adoption nationwide, New Jersey now numbers among 37 states with active commercial PACE programs, with a further two states (Alabama and Vermont) having passed enabling legislation at the state-level but without active programs. Three states also offer PACE programs for single-family residences (California, Florida, and Missouri). New Jersey’s enabling legislation, adopted in August 2021, tasked the state’s Economic Development Authority (NJEDA) with developing guidelines and oversight responsibilities for New Jersey municipalities opting into the program.
According to NJEDA, 16 municipalities have already opted in and have active programs accepting applications from commercial property owners. All are general-purpose governments with the requisite authority to levy a property tax, the mechanism through which the loans are repaid. Participating localities include two boroughs, six townships, and eight cities across 13 counties, including our two most populous cities: Newark and Jersey City. According to the 2020 Census, about 14 percent of New Jerseyans reside in these municipalities. As with some of our major centers of economic activity, far more of us work, attend school, shop, and visit these cities for leisure and other activities and stand to benefit from potential improvements in commercial properties and localized environmental conditions. Since the program has only recently been launched, we can expect other New Jersey general purpose municipalities to opt in, providing commercial property owners in their jurisdictions with the opportunity to apply for financing.
Core to the design of PACE is the fact that although the program is originated and administered by governments, the money leant to property owners who borrow through the program is sourced from the private sector, rather than raised through the general property tax. Borrowers pay interest on their loans, just as they would if they were borrowing from a bank, which attracts investors looking to profit from lending their capital. Accordingly, an industry of firms that originate and underwrite the loans and specialize in raising private capital to then lend through PACE programs profit by providing financial services and access to capital. So far, eight firms which operate across the nation are involved as capital providers to the Garden State C-PACE program. Providers must apply to and be approved by NJEDA to operate in this manner.
Future posts in this series will explore, to the extent possible, some of the first projects funded through the Garden State C-PACE program.