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State officials hope a bill passed during the 2026 legislative session will boost a 2-year-old energy-efficiency financing program that has struggled to attract applicants.

The program, called C-PACE 鈥� short for Commercial Property Assessed Clean Energy 鈥� is aimed at cleaning up one of the state鈥檚 largest polluters: buildings.

The law, which took effect May 20, allows properties that have received industrial revenue bonds to qualify for C-PACE, which New Mexico lawmakers established in 2023.

No public money is spent on such loans, which are between private lenders and developers. Under C-PACE financing, a borrower repays the lender a fixed rate through the county government via a special assessment tax. The county then passes those payments to the lender.

The law authorizes counties to impose special assessments on properties that make energy efficiency improvements, such as better insulation, energy-efficient lighting and water-saving fixtures.

In case of default, a special assessment lien between a developer takes priority over all other liens 鈥� even on the underlying mortgage 鈥� except property taxes. That gives lenders of C-PACE loans more room to offer lower interest rates than a normal construction loan.

The program is housed in the state Economic Development Department and administered by Adelante Consulting.

Eric Christensen, Adelante鈥檚 C-PACE project manager, said not many people are aware of the program, which has thus far financed more than $140 million in improvements on five different loans.

鈥淪ometimes it鈥檚 actually the tool that helps them close a project that鈥檚 dragging on,鈥� he said.

Qualifying projects must make property improvements in one of at least four categories: Energy efficiency, water efficiency, renewable energy and making buildings more resilient to events such as wildfires.

The average loan amount is $28 million, according to Adelante. As of January, the program has helped save six million gallons of water, helped the state avoid up to 2.8 million pounds of CO₂ emissions, and provided annual utility savings of $278,443.

The program is a part of Democratic Gov. Michelle Lujan Grisham鈥檚 push to decarbonize the state.

In 2024, officials with several state agencies published a to advance her 2019 executive order directing New Mexico to achieve a statewide reduction of greenhouse gas emissions of at least 45% by 2030 compared to 2005 emissions levels. The governor added a long-term target for the state to eliminate anthropogenic CO₂ emissions by midcentury.

Electricity generation was the main culprit, accounting for nearly 18% of the 88.6 million metric tons of CO₂ emitted that year. After that was transportation. Both sectors are under decarbonization mandates from legislation signed by Lujan Grisham.

If those two sectors decarbonize, New Mexico鈥檚 buildings could soon be the biggest CO₂ emitters in the state.

The residential building sector was the state鈥檚 third-largest CO₂ emitter, accounting for 2.7% of total emissions, or 2.1 million metric tons, in 2021, according to the climate plan. Commercial buildings came in fourth. They emitted 1.6 million metric tons, 1.6% of total emissions.

Under the 2023 law, counties and municipalities opt into the program. So far, seven of the state鈥檚 33 counties have done so: Santa Fe, Bernalillo, Do帽a Ana, Taos, Los Alamos, San Juan and Miguel counties. The cities of sa国际传媒官网网页入口, Taos, Santa Fe, Farmington and Las Cruces opted in as well.

John Murtagh鈥檚 company, Wexford Construction, has built approximately 3,000 homes and 850 apartments in sa国际传媒官网网页入口.

In September, he took out a C-PACE loan of roughly $33 million for his latest residential development in Northwest sa国际传媒官网网页入口, called Via Verde. Some 85 people have moved into the townhomes, which are still under construction. The main pitch to attract potential residents on a website set up for the development is its 鈥渆co-conscious design鈥� that allows for lower utility bills.

The energy efficiency measures allowed him to qualify for C-PACE funding. About 30% of his costs are being funded by the C-PACE loan, he said, helping him finance upgrades that he may not have otherwise installed. The C-PACE loan allowed him to get a lower interest rate to finance the upgrades than he would have gotten for a normal construction loan.

鈥淗opefully, between the interest savings and other things, I can actually make the project competitive compared to the competition,鈥� he said.

Justin Horwath covers tech and energy for the Journal. He can be reached at jhorwath@abqjournal.com.