Frequently Asked Questions

C-PACE (Commercial Property Assessed Clean Energy) is a financing option that allows commercial property owners to fund energy-saving improvements with long-term, fixed-rate capital. C-PACE is approved on a state-by-state basis, and, unlike traditional loans, is repaid through a special assessment added to the property's tax bill. C-PACE financing covers costs for upgrades like HVAC systems, solar panels, lighting, insulation, and storm-resistant windows.

C-PACE (Commercial Property Assessed Clean Energy) financing is a highly adaptable form of low-cost, non-recourse capital for property upgrades that improve energy efficiency, conserve water, and enhance the resiliency of buildings.

This alternative financing is secured and repaid by a special assessment attached to the property and is generally up to 35% of a property’s appraised value. The payment obligation transfers along with ownership of the property, and the assessment can be prepaid at any time.

C-PACE can work within a variety of capital stacks and can be utilized in different ways depending on the needs of the developer/property owner.

- C-PACE bridges gaps in the capital stack, ensuring projects get across the finish line.

- C-PACE can also be used as a substitute for high-octane senior debt, blending down interest rates and reducing the cost of capital.

- C-PACE also acts as an “Equity Reducer and IRR Juicer™”, substituting more expensive preferred equity and/or mezzanine debt for cheaper PACE financing.

C-PACE financing is available to owners and developers of commercial properties, including hospitality, industrial, and multifamily properties (5+ units, varies depending on state). The properties have to be located in states with active C-PACE lending programs, and their eligibility depends on local regulations and project scope. PACE Loan Group helps businesses navigate the process to secure funding.

No personal guarantees – The loan is secured to the property, not the owner.

Long loan terms – Up to 30 years, keeping payments manageable.

Positive cash flow – Energy savings often outweigh loan payments.

Improved property value – Upgrades enhance energy efficiency & resilience.

- C-PACE financing is available for commercial properties, including but not limited to: Office, Multifamily, Industrial, Mixed-Use, Retail, Hospitality, Senior Living, and Self-Storage. C-PACE does NOT finance single-family residential properties.

- Types of work that C-PACE can finance include: New construction, renovation, gut rehab, adaptive reuse, solar, roof projects, and refinancing of any of these projects. Fill out this form to see if your property is eligible for C-PACE.

Fill out this form to see if your property is eligible for C-PACE.

PLG funds projects of $1M+.

In most states, C-PACE can retroactively cover eligible improvements completed in the past 1-3 years, freeing up rescue capital for stalled projects. By refinancing completed improvements, owners can reduce the cost of capital, improve cash flow, and cover cost overages with retroactive C-PACE.

Click below to learn more about retroactive C-PACE.

Commercial Property Assessed Clean Energy (C-PACE) financing is available in most states across the country. While programs vary by location, C-PACE is currently active in over 35 states, including:

California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Washington D.C.

Looking to see if C-PACE is available for your project? Explore our interactive map or contact PACE Loan Group for state-specific guidance.

C-PACE finances a variety of renewable, energy-efficient, and resiliency projects. These include:

- HVAC upgrades, high-efficiency lighting, building envelope, roof replacement, boilers and chillers, renewable energy, water conservation, and seismic retrofits.

C-PACE assessments cannot be accelerated. Only the past due portion is senior to a mortgage lender’s claim, which is typically only 1-3% of property value. Some senior lenders also require property owners to escrow annual C-PACE payments monthly in a similar manner to property tax escrow requirements, helping mitigate risk associated with failure to pay the assessment when due. In case of a default on senior debt, C-PACE financing does not restrict a senior lender’s foreclosure rights. There is no required intercreditor agreement with a senior lender.

Chat with one of our Originators to further see how C-PACE can benefit the senior lender.

If considering Fannie or Freddie as post-construction takeout financing, C-PACE serves as construction financing, but does not stay in the takeout as permanent debt. There is also a viable execution with USDA financing nationwide and HUD in certain states. C-PACE fits in with SBA 7(a) financing, but not SBA 504 financing.

Contact an Originator to learn more.

C-PACE funding is a great option for solar financing, covering the cost of solar panels, battery storage, and installation. This allows businesses to invest in clean energy without large upfront costs.

Every deal is different – but we are looking at the strength of the sponsor, the proforma financials, and the overall capital stack. We also look at the exit plan. Is there a viable take-out?

CPACE (Commercial Property Assessed Clean Energy) financing is repaid not through traditional monthly loan payments but as a special assessment added to the property’s tax bill. This assessment is collected by the local government as part of regular property taxes and continues over a long-term period (often 15–30 years). Because the obligation is tied to the property tax, it remains with the property even if it is sold, unless paid off at closing.

“PACE” stands for Property Assessed Clean Energy, a broad financing approach for clean energy and efficiency upgrades. “C-PACE” specifically refers to Commercial PACE, the version designed for commercial, industrial, nonprofit, and multifamily properties. Residential PACE (R-PACE) exists in some states for single-family homes, but C-PACE is the commercial implementation of the same underlying mechanism.

CPACE differs from a conventional loan in important ways: the repayment is made through a property tax assessment rather than direct loan payments, the financing obligation is tied to the property itself rather than the owner and can transfer on sale, and the structure typically offers longer terms (up to 30 years) and fixed rates because it is secured by a tax assessment lien rather than standard mortgage or business credit.

C‑PACE financing is provided by private capital providers, such as banks, insurance companies, or specialty investment funds, rather than by government agencies. The local government’s role is limited to administering the tax assessment that secures repayment.

C‑PACE is considered debt financing, not equity. The property owner borrows funds to pay for energy efficiency, renewable energy, or resilience upgrades, and the loan is secured by a property tax assessment lien rather than ownership interest in the property.

No, c pace is not government funding. While the program is enabled by state and local legislation and uses local government infrastructure to collect repayment through property taxes, the actual financing comes from private lenders or investors, not public funds.

Typically, you do not need to change your building design to use C‑PACE. The program funds energy efficiency, renewable energy, or resilience improvements that can often be integrated into existing building systems. Any design changes are project-specific and depend on the scope of upgrades.

Banks and lenders use C‑PACE financing to reduce risk because the repayment is secured by a senior property tax lien, which takes priority over most other liens on the property. This structure provides long-term, predictable payments and mitigates credit risk, making it safer for lenders compared to conventional unsecured loans.