C-PACE Financing for Solar: How to Fund 100% of Your Commercial Solar Project

If you own commercial real estate and want to install solar without any out-of-pocket cost, C-PACE might be the most powerful financing tool at your disposal. Unlike traditional loans that are secured by the borrower's creditworthiness, C-PACE is secured by the property itself — repaid as a special assessment on your property tax bill. This unique structure enables longer terms, lower rates, and a transferability feature that no other financing option can match.

What is C-PACE Financing?

C-PACE (Commercial Property Assessed Clean Energy) is a public-private financing mechanism that allows commercial and industrial property owners to fund energy improvements through a voluntary special assessment on their property tax bill. Key characteristics:

• 100% financing: covers the full project cost including soft costs (engineering, permitting)
• Long terms: 20-30 years, matching the solar system's useful life
• Non-recourse: Secured by the property, not the owner personally
• Transferable: If you sell the building, the C-PACE assessment transfers to the new owner
• Fixed rate: Locked-in interest rates for the entire term (typically 5-8% in 2026)
• Tax-deductible: The interest portion of C-PACE payments may be tax-deductible as a property-related expense

How C-PACE Works: The Mechanics

1. Property owner identifies a solar project and selects an installer.
2. C-PACE capital provider (like Greenworks Lending, Counterpointe, or Petros PACE) reviews and approves the project.
3. Existing mortgage lender provides written consent. This is typically required since C-PACE holds senior lien position on the property tax bill.
4. Local government records the special assessment on the property.
5. Capital provider funds the project. The installer is paid directly.
6. Property owner repays through an additional line item on their annual property tax bill for 20-30 years.

C-PACE vs. Traditional Financing

Feature	C-PACE	Commercial Loan	PPA
Down payment	$0	10-25%	$0
Term	20-30 years	7-15 years	15-25 years
Owner of system	Property owner	Property owner	Third party
ITC benefit	Owner gets 30%	Owner gets 30%	Developer keeps
Personal guarantee	None	Required	None
Transferable on sale	Yes	No	Complex
Lender consent needed	Yes	No	Yes (roof lease)
Interest rate (2026)	5-8%	6-9%	N/A ($/kWh rate)

Eligibility Requirements

• Property type: Commercial, industrial, multifamily (5+ units), agricultural, and non-profit properties. Single-family residential typically NOT eligible for C-PACE (residential PACE programs are separate).
• Location: Must be in a jurisdiction with an active C-PACE program.
• Property taxes: Must be current on property tax payments (no delinquencies).
• Mortgage lender consent: Existing lender(s) must provide written approval. This is often the most time-consuming step.
• Savings-to-investment ratio: The project must demonstrate positive cash flow — annual energy savings must exceed the annual C-PACE assessment payment.
• Minimum project size: Typically $50,000-$100,000 minimum, though some programs accept smaller projects.

Step-by-Step Application Process

1. Pre-qualification (1-2 weeks): Submit property details and project scope to a C-PACE capital provider for preliminary approval.
2. Energy audit & engineering (2-4 weeks): A third-party energy assessment verifies that the project meets savings-to-investment requirements.
3. Mortgage lender consent (4-12 weeks): Request written consent from your existing mortgage lender. This is often the longest step; start early.
4. Final underwriting (2-3 weeks): The C-PACE provider completes due diligence on the property, project, and assessment amounts.
5. Local government recording (1-2 weeks): The special assessment is recorded by the local government.
6. Funding & construction (1-4 weeks): Capital is disbursed to fund the solar installation.

Total timeline: Expect 3-6 months from initial application to funded project. Starting the mortgage lender consent process early is critical.

Stacking C-PACE with ITC & MACRS

One of C-PACE's biggest advantages: because the property owner owns the solar system, they retain all tax benefits:

• 30% federal ITC: Applied to the full installed cost of the system.
• MACRS 5-year depreciation: Accelerated depreciation on the depreciable basis (cost minus 50% of ITC).
• Combined tax savings example (500 kW system, $1.2M):
  • ITC: $360,000 (30%)
  • Year 1 MACRS: ~$120,000 in tax deductions
  • First-year cash benefit: ~$385,000
  • Effective first-year cost: $815,000
  • Annual C-PACE payment: ~$95,000
  • Annual electricity savings: ~$140,000
  • Net positive cash flow from year 1

C-PACE Availability by State (2026)

• Most active markets: California, Connecticut, Colorado, Florida, Maryland, Missouri, New York, Ohio, Texas, Virginia
• Growing markets: Michigan, Illinois, New Jersey, Oregon, Rhode Island, Utah, Wisconsin
• Recently enacted: 37+ states have enabling legislation, but not all have active county-level programs
• Check availability: PACENation.org maintains a current map of active C-PACE programs