top of page

What Is Property Assessed Clean Energy Financing?

Property assessed clean energy, or PACE financing is a financing solution that provides low-interest loans to businesses and homeowners to fully cover the cost of clean energy and other relevant improvements. The PACE loan is noted on a property tax bill as an assessment.


Building owners can pay it back the loan via their annual property tax bill for as long as 30 years. As it is being paid out in portions over a longer period of time, the building's managers and owners will be able to take time to make the necessary energy-efficiency upgrades.

PACE lending has been implemented in 38 states and Washington, D.C., according to PACENation. While PACE lending criteria vary depending on the state or local governing body, it can be used to create energy and water-saving solutions.

Commercial owners would apply for a commercial property assessed clean energy, or C-PACE, financing, which can be applied to new construction projects or renovations of existing properties. In addition to funding energy-efficient systems, C-PACE can also be used to fund projects that promote resilient infrastructure. This helps buildings in regions that are susceptible to structural damage due to inclement weather or other disasters.

What Does C-PACE Financing Cover?

C-PACE is financing that is allocated specifically to commercial assets, including industrial and multifamily/affordable housing buildings, as well as schools and hospitals. The Department of Energy reports projects involving energy-efficient upgrades commonly cost $250K or more. For example, commercial properties use the C-PACE program for solar conversions, which can cost thousands of dollars. The average starting cost for commercial solar panels is around $50K, according to GreenBuildingElements.

C-PACE financing can cover the cost of labor and materials. In addition to PACE funding for solar programs, the types of commercial repairs and upgrades that C-PACE would cover are:


  • LED lighting.*

  • Roof replacement.

  • HVAC systems.

  • Heating and cooling.

  • Infrastructure for clean water.


* PACE loans can’t be used to finance portable items, such as screw-in lightbulbs. However, the funds can be used to replace incandescent and fluorescent lighting.

How Does The C-PACE Program Work?

Upon submitting an application and receiving approval for a loan from an appointed C-PACE administrator, it will become a legal claim and the assessment will be tacked onto a property tax statement. The building owner uses the funds to cover the services performed by the contractor and energy service company.

Payments for a C-PACE loan are collected annually. While building owners have between 10 and 30 years to repay the loan, the repayment process can be started at any time. Otherwise, an amount for repayment will be included with each yearly property tax bill. The interest doesn’t change and has typically been between 5% and 6%.

Owners can typically split the cost of the loan with building tenants. Additionally, because the C-PACE is connected to property taxes, should the original building owner choose to sell the building, it would be passed onto the next owner.

Should Borrowers Use C-PACE?

Commercial building owners may choose to finance their projects with C-PACE because clean energy project fees can grow exponentially, and these loans can defer those costs. Additionally, the C-PACE program may help some building owners and developers meet their states’ carbon and greenhouse gas reduction goals, which are becoming mandatory in some states.

Building owners who have properties in a state that authorizes C-PACE financing may opt for this program if they are looking into implementing sustainable building solutions while making smaller payments over a longer period of time.

Because C-PACE financing is attached to the property, building owners don’t have to meet any personal financial requirements to secure it, and if it is sold, they would no longer be obligated to make the remaining payments. Since C-PACE is included as an assessment on a property tax bill, lenders may regard it as low-risk.

According to the Department of Energy, however, building owners can only seek C-PACE if it is offered in their state. Building owners who have mortgaged properties would also first need to seek approval from the lender before applying for a C-PACE loan.

A Collection Of Recent Major Projects That Utilized C-PACE Funding

Ivins, Utah

  • Property: Black Desert Resort

  • C-PACE: $153M

On Oct. 4, C-PACE provider Petros announced that it collaborated with investment company Reef Capital Partners to deliver $153M of C-PACE financing for the construction of Black Desert Resort, an $820M resort development. The funding will go toward installing low-voltage wiring, LED lighting and HVAC equipment.

San Francisco

  • Property: Chinese Hospital

  • C-PACE: $103M

On Jan. 27, GreenRock, a CRE firm that specializes in providing PACE loans, announced that it facilitated a $103M C-PACE to be used to make structural renovations on a patient tower at San Francisco’s Chinese Hospital. Through the loan, the hospital will save an estimated $40M over the next 10 years on sustainable renovations.

New York

  • Property: 111 Wall St.

  • C-PACE: $89M

In June 2021, law firm Rosenberg & Estis announced that it had moved forward on an $89M C-PACE for 111 Wall St., a 900K SF office property. The loan was allocated to owners Nightingale Properties and Wafra Capital Partners.

The funds will be put toward cutting down on energy usage in accordance with New York’s Local Law 97, which stipulates that buildings larger than 25K SF must achieve a 40% reduction in carbon emissions by 2030 and an 80% reduction by 2050. The building upgrades would save $2.5M in energy spending per year.

Keystone, Colorado

  • Property: Keystone Resorts

  • C-PACE: $55M

On Sept. 4, Colorado C-PACE announced that Enhanced Capital arranged for a $55M C-PACE loan to go toward the construction of a 231K SF ski resort and housing project. The resort is set to include design elements that help with conserving water and facilitating energy-efficiency in its heating and cooling mechanisms. The project is estimated to save $1.3M in energy costs.

Arcadia, California

  • Property: Le Meridien Hotel

  • C-PACE: $42M

On June 1, 2021, Bayview PACE announced that it allocated $42M in C-PACE financing to Arcadia’s Le Meridien Hotel. The hotel was looking for a financing plan that offered a longer-term loan, and C-PACE allowed the hotel to pay back the loan over the next three decades. It was provided retroactively and covered energy-saving equipment that was utilized throughout construction, including installing LED lights and energy-efficient heating and cooling mechanisms.


  • Property: 480 William McClellan Highway

  • C-PACE: $1.1M

On Nov. 7, Nuveen Green Capital, a CRE firm that specializes in providing financing options for sustainable building projects, announced that it arranged for a $1.1M C-PACE loan in collaboration with MassDevelopment for an industrial building at 480 William McClellan Highway in East Boston.

The renovations, which are set to save $764K in energy costs, will include an updated HVAC system and LED lights.

How Can Building Owners Find Information About PACE Programs?

List Of Participating States

By Individual State:

New York State Energy Research and Development Authority

California Department of Financial Protection and Innovation

Pennsylvania C-PACE 

Texas PACE Authority

Florida PACE Funding Agency

Bisnow Top Stories

CRE Could See New Funding From $4.2B Environmental Bonds Act

Through the Environmental Bonds Act, New York can allocate $4.2B to fund climate projects. This creates opportunities for CRE professionals to help provide more sustainable buildings, especially in areas that need it most.

Data Shows The Greenest Offices Are Getting More And More Valuable

London office buildings that have environmentally friendly initiatives are experiencing the most benefits, including increasing sales.

As States Escalate Resistance, ESG Backlash Could Come At A Cost To Investors

Some red states have eliminated funding for ESG initiatives, which could block opportunities for investors who want to get involved.

Energy Price Hike Makes Sustainability An Easier Talk With Tenants

To help the UK fulfill its goal of carbon neutrality, investors and developers in a variety of CRE sectors can determine how to move forward with the future of UK infrastructure.

‘The Market Is Demanding It’: Boston Developers Face Growing Pressure To Decarbonize Buildings

There has been increasing investor demand for Boston to quickly achieve its sustainability initiatives. Boston CRE professionals have been putting plans in place that would help comply with these initiatives before the city makes its standards mandatory.

Looking to improve the efficiency of your prospecting?


PACE Lending

A Comprehensive Guide

bottom of page