C-PACE Financing for Energy Efficiency and Renewable Energy
Commercial Property Assessed Clean Energy (C-PACE) financing allows property owners to fund energy efficiency, renewable energy, and water conservation improvements with long-term, low-cost capital — repaid through a property tax assessment. PeerSense connects you with C-PACE lenders and helps you stack it with other financing.
What CPACE Is
Commercial Property Assessed Clean Energy (CPACE) is a financing mechanism that allows property owners to fund energy efficiency and renewable energy improvements through a special property tax assessment.
Property Tax Assessment
Financing is secured by your property and repaid as part of your property tax bill. The assessment stays with the property, not the borrower.
Non-Recourse Structure
No personal guarantee required. The financing is secured by the property itself, protecting your personal assets and other holdings.
No Income Documentation
Unlike traditional commercial loans, CPACE doesn't require tax returns, financial statements, or income verification. Qualification is based on the property and improvements.
Key Advantage: Transferable Assessment
If you sell the property, the CPACE assessment transfers to the new owner along with the property. This means the improvements you make can increase property value without creating a balloon payment at sale.
What CPACE Covers
CPACE financing can be used for a wide range of energy efficiency, renewable energy, and water conservation improvements that reduce operating costs and increase property value.
Solar & Renewable Energy
Solar panels, wind turbines, geothermal systems, and other renewable energy installations.
HVAC Systems
High-efficiency heating, ventilation, and air conditioning systems that reduce energy consumption.
Lighting & Controls
LED lighting upgrades, smart lighting controls, and automated energy management systems.
Building Envelope
Roofing, insulation, windows, and doors that improve energy efficiency and reduce heat loss.
EV Charging Infrastructure
Electric vehicle charging stations for commercial properties, parking structures, and fleet operations.
Water Conservation
Low-flow fixtures, rainwater harvesting, irrigation systems, and water recycling equipment.
Seismic Upgrades
Structural improvements for earthquake resistance (available in select states with seismic activity).
Energy Management Systems
Building automation, energy monitoring, and smart controls that optimize energy usage.
Key Terms
Commercial Property Assessed Clean Energy (CPACE) offers flexible, long-term financing with terms that make sense for commercial property owners making substantial improvements.
Financing available for small to large-scale commercial property improvements
When stacked with senior debt, can cover full project costs
Long-term financing that matches the useful life of improvements
No personal guarantee required — secured by property only
No tax returns or financial statements required for qualification
Predictable payments with no rate fluctuation over the term
Stacks with Senior Debt
CPACE sits behind your first mortgage and doesn't require lender consent in most states. This allows you to finance improvements without refinancing your existing loan or using equity.
Lower Cost Than Mezzanine
CPACE typically offers lower rates than mezzanine financing or preferred equity, making it an attractive option for filling the capital gap between senior debt and project costs.
How CPACE Stacks with Other Financing
CPACE sits behind senior debt and doesn't require lender consent in most states. It can fill the gap between your senior loan and the project cost — essentially replacing equity or mezzanine at a lower cost of capital.
| Capital Stack Position | Typical LTV | Typical Rate | Recourse |
|---|---|---|---|
Senior Debt (1st Lien) Bank or conventional lender | 60–75% | 5–8% | Recourse |
CPACE (2nd Lien) Property tax assessment | Up to 100% combined | 6–9% | Non-Recourse |
Mezzanine / Preferred Equity Subordinated debt | 75–90% | 10–18% | Varies |
Common Equity Owner/sponsor capital | 10–40% | Variable return | N/A |
Replaces Equity
CPACE can fill the gap between senior debt and project costs, reducing or eliminating the need for owner equity or outside investors.
Lower Cost Than Mezz
CPACE rates are typically 6–9%, significantly lower than mezzanine financing (10–18%), saving thousands in interest costs.
No Lender Consent
In most states, CPACE doesn't require consent from your senior lender, making it easier to add to your capital stack.
Who Uses CPACE
CPACE is used by commercial property owners across multiple asset classes who want to make energy-efficient improvements without using equity or refinancing existing debt.
Hotel Owners
HVAC upgrades, solar installations, LED lighting, and water conservation systems that reduce operating costs and increase NOI.
Office Building Owners
Energy-efficient building systems, smart controls, and renewable energy that attract tenants and command premium rents.
Industrial Property Owners
Solar arrays, energy-efficient lighting, HVAC systems, and equipment that reduce utility costs for manufacturing and warehouse operations.
Multifamily Developers
Building-wide energy improvements, solar installations, EV charging, and water conservation for apartment complexes and mixed-use developments.
Retail Center Owners
Energy-efficient systems, solar canopies, LED lighting, and EV charging that reduce costs and attract environmentally conscious tenants.
Adaptive Reuse Developers
Comprehensive energy upgrades during conversion projects — historic buildings, warehouse-to-office, industrial-to-residential conversions.
Frequently Asked Questions
Ready to Finance Your Energy Project?
If you own commercial property and want to fund energy efficiency, renewable energy, or water conservation improvements, C-PACE may be the right solution. PeerSense connects you with C-PACE lenders and helps you structure the financing. One conversation. Direct introduction. No runaround.
Or call (317) 452-6990 to discuss your project directly.