Everything You Need to Know About C-PACE Financing

Discover how eco-friendly upgrades to your commercial construction project could be much more affordable—and profitable—than you think.

Key Takeaways:

• C-PACE financing provides a flexible and affordable way to fund energy efficiency and renewable energy projects.
• C-PACE funding offers long-term, fixed-rate financing, reducing the financial burden on property owners.
• Energy-efficient buildings can be more attractive to tenants and lead to higher property values.

Eco-conscious and energy-efficient construction has taken center stage in the minds of construction companies, landlords, tenants, and government agencies. 

Its increasing importance earned it a place in our Top 6 construction trends to watch, covering such future-facing approaches as passive design and net zero buildings.

And it’s because of this growing popularity that retailers and restauranteurs can turn green thinking into reality thanks to Commercial Property Assessed Clean Energy (C-PACE) financing. 

C-PACE provides an innovative and increasingly popular way for businesses to borrow funds for renewable and energy efficiency upgrades, paid semi-annually via property tax assessments.

The U.S. commercial real estate market received a $600 million investment into C-PACE in October 2024, designed to make it even easier for construction projects to prioritize their environmental profile.

That capital injection was also a strong indicator of the growing demand for these programs and how they may become as common a source of financing as the traditional construction loan.

Let’s explore the advantages and disadvantages of C-PACE financing and discover what it means for entrepreneurs, communities, and environmental sustainability.

Funding for Specific Energy Upgrades

C-PACE financing exists for commercial properties, including multifamily, industrial, and agricultural projects. 

It’s available to fund installation of (and upgrades to) such eco-friendly features as:

• Solar panels
• Disaster-proofing against earthquakes and fires
• Other structural retrofits
• HVAC systems
• Charging stations
• Roofing and insulation
• Lighting

C-PACE financing represents significant assistance for tight business budgets and a compelling opportunity for financially reluctant business owners to become more energy-efficient and environmentally friendly.

Consider how upgrades funded under C-PACE can lead to increased levels of performance for businesses, lower utility bills, and an increase in overall cash flow. 

Those are some strong selling points to consider beyond the initial costs to make the improvements.

This brings us to another attractive point: C-PACE financing can cover up to 100% of the upfront costs required to make site improvements, often without the need for the property owner to make a downpayment.

Long-Term Financing and Enhanced Property Value

C-PACE financing can last as long as a decade and beyond, up to 30 years. It’s also a fixed rate. The added advantage of payment rates staying the same allows businesses to manage their overall budget with greater ease and confidence.

Energy-efficient improvements financed via C-PACE can make a property more attractive to potential buyers. They won’t have to pay for those upgrades themselves, and the building will ultimately be cheaper for them to operate.

Additionally, environmentally conscious buildings have been shown to increase employee comfort. 

This, in turn, can improve employee levels of performance and productivity, meaning both the building and the workforce within it could be greater moneymakers for any future property/business owner.

The same potential for return on investment exists for landlords looking to upgrade their residential developments into something greener. 

Tenants will enjoy more comfortable spaces, better health and wellbeing, and realistically be more likely to extend their lease and even recommend that site to others.

Here’s another important thought for residential constructors: The National Association of Realtors has highlighted how consumers’ green expectations are increasingly a driving force in the number of future sales, especially as concerns about comfort and safety in the face of climate change continue to grow.

Disadvantages of C-PACE Financing

Now that we’ve looked at the benefits of securing C-PACE funding, let’s consider the drawbacks. 

C-PACE isn’t available everywhere. Legislation is active in 40 states, plus Washington, D.C., with only 32 states, including D.C., currently operating their programs. 

This limits access for many business owners (at least for the moment).

Securing funding could take longer if your property is mortgaged. This is because, even if C-PACE financing is available to you, it’s necessary in many cases to get the mortgage lender’s approval before funding can continue.

The nature of this funding also differs on a per-property basis. C-PACE financing may not be an all-encompassing financial answer for owners of multiple business properties looking to implement energy efficiency across their portfolios.

Another potential drawback arises if you have to sell a property with an existing C-PACE assessment still attached. That outstanding fee will increase the overall property tax bill for the next owner, which might put some buyers off.

How to Tell if You Qualify for C-PACE Funding (and Where to Get It)

Eligible businesses can secure C-PACE funding via local and statewide programs, depending on where they’re located. 

This financing can be a good fit if you:

• Can confirm that you own or occupy a facility in a municipality or county with state-approved C-PACE programs. Learn more by using this interactive map.
• Are ready to make a long-term investment in the reliability and resiliency of your building(s).
• Are looking to conduct a pilot project before expanding to other properties.

The U.S. Department of Energy’s Better Buildings division has a list of trusted partners who provide various C-PACE financial products across different sectors and technologies, making this resource a good place to start confidently looking for funding.

Building owners and developers can learn more about C-PACE financing before deciding by reviewing their introductory toolkit. It provides case studies and resources that go into deeper detail about the many projects to which this funding can be applied.

Learn More Ways to Build Better With RPC

It’s great to get financed for green initiatives, whether you’re building from scratch or retrofitting/redesigning an existing structure. 

Your next move is to find a construction partner that can make these practical changes happen.

RPC General Contractors Inc. is a full-service construction company with extensive experience across residential and commercial spaces. 

Just send us a message, call at (904) 241-4416, or stop by our Atlantic Beach office to learn more about how we can help you secure the best funding for your next construction project.

We’d love to hear from you!