Texas is facing a mounting water crisis, and the economic stakes are high. With demand projected to increase by more than 80% between now and 2050, the state must act swiftly to secure the future of its water resources. Without action, the state may be prone to a loss of up to $117 billion in GDP and nearly a million jobs, according to public policy research and advocacy group Texas 2036.
Commercial Property Assessed Clean Energy (C-PACE) financing offers a compelling solution. The innovative program allows commercial property owners to access affordable, long-term financing for water conservation improvements, such as low-flow plumbing fixtures and water reuse technologies. By reducing upfront costs and an up to 30-year amortization schedule, C-PACE makes it financially feasible for businesses to invest in water-saving measures.
Economic and Environmental Benefits
Implementing C-PACE-funded water conservation projects can lead to significant water savings while reducing strain on municipal water supplies and lowering utility costs for property owners. These improvements not only contribute to the state’s conservation goals but also enhance property values and support economic development. Moreover, by decreasing demand on overburdened water systems, C-PACE projects can help mitigate the risk of water shortages that threaten Texas’s economic stability.
Integrating C-PACE into Texas’s Water Strategy
To maximize the impact of C-PACE, state and local governments should consider integrating the program into broader water conservation initiatives. This includes promoting awareness among property owners and incorporating C-PACE into regional water planning efforts. By doing so, Texas can leverage private capital to fund critical water-saving projects, complementing public investments and helping to close what Texas 2036 believes to be an estimated $112 billion funding gap for water infrastructure.
Case Study: ViVa Center in Harris County
Property owners across Texas are already leveraging C-PACE to address water conservation goals. When it comes to commercial real estate, data centers are perhaps the largest consumers of energy and water, and with technologies like AI and cloud computing propelling demand for more storage, some developers are looking at C-PACE to reduce reliance on the state’s water supply and power grid.
Take ViVa Center, a 2.3-million-square-foot technology hub underway in the Houston-area suburb of Tomball. The developers added a $40 million C-PACE assessment to the property — a move which is expected to reduce the property’s annual water consumption by 69%. This is expected to be massively impactful to the property as a whole, which will include a 774,000-square-foot data center at full build-out.
Looking Ahead
As Texas confronts the challenges of a growing population and diminishing water resources, innovative financing mechanisms like C-PACE offer a viable path forward. By facilitating investment in water conservation, C-PACE can play a pivotal role in securing the state’s water future, safeguarding its economy and promoting sustainable growth.
If you have a commercial project that could benefit from C-PACE financing, contact Lone Star PACE today.