C-PACE Financing: What is it and How Does it Benefit Your Business?

Commercial Property Assessed Clean Energy (C-PACE) is a financing tool you will want to learn about.

You already know that energy improvements can reduce operating costs, increase asset value, and improve tenant comfort and satisfaction. But most projects are capital intensive and take many years to pay back. 

C-PACE is designed to overcome these obstacles by providing low-cost, long-term financing for your commercial, industrial, or nonprofit building. 

This recent Facebook Live session with Kareem Dale from Key HTX discussed how you can use C-PACE to improve cash flow, increase net operating income, and maximizing your building’s value.

What is C-PACE?

C-PACE was developed in 2009 to provide building owners with a way of financing capital-intensive energy and water improvements on their commercial buildings. Instead of bank loans that offered short-term, high-cost financing, C-PACE offered a long-term, low-cost financing solution.

The Process

Typical C-PACE financing can be secured with $0 up front for up to 20 years. Financing is based on your building’s value, not a personal guarantee or credit history. It’s like a loan for your building. How much you can finance is based on the building’s value and any outstanding mortgages.

Typically, you work with a project developer to scope your project and obtain private third-party financing for the improvements. Financing is secured to your property in the form of a lien, and is repaid annually through your property tax bill.

What is Eligible

Financing can be applied to a huge array of improvements – everything from energy efficiency (e.g., lighting, HVAC, windows) to renewable energy (solar) to battery storage and even seismic improvements. Because these improvements often result in utility cost savings, you can use those savings to repay the financing.

How does C-PACE Benefit Your Building?

C-PACE is designed specifically to overcome the obstacles building owners face with capital-intensive energy improvements. In addition, C-PACE offers a multitude of benefits that make it even more appealing than bank loans or self-financing.

Positive Cash Flow

Many states require, or at least recommend, that your C-PACE project has a savings-to-investment ratio of 1.0 or greater. That means on day one, your project will save you more money than it will cost you. Everyone knows how important cash flow is.

Low-Cost Financing

Most C-PACE programs around the country allow $0 or very low down payments for C-PACE financing. Hard costs and soft costs are eligible for financing, lowering your out-of-pocket expense even further.

Long-Term Financing

C-PACE is typically available for up to 20-year terms. In some states, it even reaches 25 years! The financing term is negotiated between you and the private capital lender and is driven by the equipment being installed and their estimated useful life.


C-PACE financing is secured to the building, not to you – the building owner. As a result, it can be transferred to the new building owner and doesn’t have to be paid off like a traditional mortgage.


C-PACE also differs from a mortgage in that if there is a foreclosure or default, the financing does not accelerate. The only payment you are responsible for is any repayments in arrears.

Get Started

To learn more, check out PACENation’s website, which provides information about C-PACE around the country. If you want to begin your own C-PACE project, reach out to Kareem at Key to get started.

C-PACE Financing: What is it and How Does it Benefit Your Business?
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C-PACE Financing: What is it and How Does it Benefit Your Business?
Commercial Property Assessed Clean Energy (C-PACE) is a low-cost, long-term financing option for commercial buildings. Learn more here.
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