C-PACE lets commercial property owners finance solar installation through a property tax assessment, paying for the system over 20 to 30 years through the tax bill instead of a loan. Available in more than 32 states, with no personal guarantee and 100 percent financing of project costs.
By Solar Installers Near Me Research Team • Published
Commercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
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C-PACE (Commercial Property Assessed Clean Energy) is a financing mechanism that lets commercial property owners pay for a solar installation through a voluntary assessment added to their property tax bill, rather than through a conventional loan. Available in more than 32 states as of mid-2026 (PACE Nation). Terms typically run 20 to 30 years at fixed rates, with no personal guarantee required. The assessment is tied to the property, not the borrower. If the property is sold, the assessment transfers to the new owner unless paid off at closing. Rates as of mid-2026 have run 7 to 10 percent depending on state program, project size, and loan-to-value. Verify current rates with a C-PACE lender in your state.
Five things to know about C-PACE
No personal guarantee. Security comes from the property, not the business owner personally.
100 percent financing typical. Covers equipment, installation, soft costs, and sometimes development fees.
Assessment transfers with the property on sale, unless paid off at closing.
Closing typically takes 60 to 90 days. Start the process now if July 4, 2026 is a meaningful deadline.
C-PACE exists in 32+ states. Availability, terms, and program structure vary by state and sometimes county.
The transaction structure
The property owner selects a C-PACE lender operating in their state's authorized program and submits an application. The application typically includes a property description, the project scope and cost estimate, the property's current mortgage information, and the owner's project timeline. PACE Nation at pacenation.org maintains a state availability map showing which states and counties have active programs.
C-PACE transactions involve three parties: the private capital lender, the state or local PACE program administrator, and the relevant local government (county or municipality). All three must approve the transaction before funding. This three-party structure is the main reason C-PACE closings typically take 60 to 90 days, longer than a conventional loan.
Once the solar installation is complete and verified, the C-PACE lender pays the contractor directly. The property owner does not need to fund the project out of operating cash. This is the mechanism that makes C-PACE function as 100 percent financing.
Repayment appears as a line item on the property owner's annual or semi-annual property tax bill. The payment is fixed for the term, typically 20 to 30 years. The assessment is secured against the property and typically holds a senior lien position relative to the mortgage, which is why existing mortgage lender consent is important to obtain before closing.
Side-by-side
| Category | Factor | C-PACE | Conventional Commercial Loan |
|---|---|---|---|
| Collateral | Collateral | Property assessment (property tax lien position) | Business assets, personal guarantee, or blanket lien |
| Down payment / equity | Equity required | None (100% financing typical) | Typically 20-30% of project cost |
| Repayment structure | Repayment | Added to property tax bill (annual or semi-annual) | Monthly loan payment to lender |
| Term length | Term length | 20 to 30 years typical | 5 to 10 years typical for commercial solar |
| Rate type | Rate type | Fixed for term (verify with lender) | Fixed or variable (varies by lender) |
| Property sale | On sale of property | Assessment typically transfers to buyer unless paid off at closing | Loan typically paid off at closing or assumed |
| Lender consent | Existing mortgage lender | Consent required in many states (senior lien position) | No mortgage lender interaction required |
| Closing timeline | Closing timeline | 60 to 90 days from application to funding | 30 to 60 days typical |
Illustrative example
A warehouse in Texas with a rooftop solar installation at $500,000 total cost, saving $72,000 per year in electricity costs, financed over 25 years at 8 percent, would carry an annual C-PACE payment of approximately $46,000. The net positive cash flow is $26,000 per year from day one, before any tax credit.
Add the Section 48E credit on a $500,000 project at 30 percent: $150,000. That credit can be applied to pay down the C-PACE assessment balance, shortening the effective repayment period. Or transferred to a third party for 85 to 95 cents on the dollar if the business lacks sufficient federal tax appetite. This combination of C-PACE financing and ITC transfer is an increasingly common commercial solar structure.
Illustrative only -- not a quote
Illustrative. Actual savings depend on your system size, utility rate, consumption profile, and C-PACE program terms. Verify with a project-specific analysis.
State availability
States with well-established commercial programs include California, Texas, Florida, Colorado, Ohio, New York, Connecticut, Maryland, Virginia, Michigan, Minnesota, Wisconsin, and others as of mid-2026. Several states have enabling legislation but limited active program activity. Some states in the Southeast do not yet have C-PACE enabling legislation.
Before planning a C-PACE project, verify that your property's specific county or municipality has an active program. Program terms and eligible project types vary. PACE Nation at pacenation.org maintains a current state availability map.
Total cost of financing including all program fees and administration fees at closing, not just the interest rate.
Transfer terms on property sale: does the assessment transfer to the buyer or must it be paid off at closing?
Existing mortgage lender consent: does your lender need to approve the C-PACE senior lien?
Experience in your specific state program: lenders with limited experience in a given state cause delays.
Timing: 60 to 90 days to close. If July 4, 2026 matters, start the C-PACE process now.
C-PACE closings take 60 to 90 days. If the Section 48E construction-start deadline is a goal, the time to start is now.
A free commercial assessment covers your property's C-PACE eligibility, your state's program terms, the Section 48E credit at your project's address, and the combined economics of C-PACE financing plus the ITC. No shared leads. No commissions.
Q and A
Combined with the Section 48E credit and MACRS depreciation, C-PACE is one of the most efficient structures for commercial solar in 2026. A free commercial assessment covers your property's eligibility, your state's C-PACE program terms, and the full combined economics before you commit to anything.
