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5 Things You Should Know to Better Understand C-PACE

Updated: Jul 22, 2021

by Andy Holzhauser

Because Commercial PACE (C-PACE) is relatively new in comparison to other financing methods, professionals – even those in banking and real estate – often underestimate how easy it is to access, the kinds of projects it can be used for and how it exactly works. In looking back at the hundreds of conversations I’ve had about C-PACE, here are five things people are usually surprised to learn:

1. Elevator modernization projects are covered.

If you have a building with an older elevator, there’s a good chance you can qualify for C-PACE. Here’s why: 1) the cost to upgrade or replace elevators can be significant; and 2) a considerable portion of a building’s energy usage comes from elevators.

Simply upgrading to LED lighting can save about 90% on the elevator’s lighting electricity usage. Deploying Electric Power Regenerative Unit technology (the equivalent of hybrid car technology but for elevators) can save about 35% on electric compared to conventional solutions. HVAC, windows, motors, plumbing and solar upgrades also qualify for 100% financing through C-PACE.

Maintaining elevators is primarily an operations expense and a safety and liability issue; but it’s also an opportunity to minimize energy bills and increase comfort, speed, and reliability. As such, financing elevator projects through C-PACE might be the perfect source of low-cost, long-term capital.

2. C-PACE qualification requirements are nearly comparable to building code baselines.

Capital projects may not require a redesign of scope, materials, or templates to qualify for C-PACE financing. They also do not need to include solar or LEED certification. In fact, the threshold for a project to qualify for C-PACE is generally quite reasonable. I have only very rarely seen a project scope need to be adjusted in order to access C-PACE and even then, the adjustments were very slight. Modeling simply needs to demonstrate efficiency and environmental improvements over building code baselines.

3. C-PACE financing can be retroactive.

You’d probably be surprised at how easy it is to qualify and get flexible, low-rate financing for past projects. Because C-PACE qualification is not onerous (i.e. point #2), it’s very possible that you’ll be able to identify energy efficiency improvements in past projects, even when those projects did not have energy efficiency as a primary objective. If so, you can retroactively apply C-PACE through a refinancing and thereby pull back some cash from the project.

To learn more about securing C-PACE financing for a project completed up to 18 months ago, please read this article.

4. More than 200 senior lenders recommend C-PACE financing for capital projects.

PACE is pre-paid through property taxes. While some lenders may see this as potentially increasing their risk and subordinating their debt, a growing number know this is not the case. Because they understand it, they recognize C-PACE financing as a new market opportunity and are differentiating themselves from competitors by proactively seeking deals in which they can lend alongside C-PACE. In some cases, lenders even prefer it to diversify risk.

5. C-PACE is not a governmental program.

Because PACE payments are facilitated through the property tax bill, there is a perception that it’s another governmental program. This is not true. While legislated at the state and municipal levels to enhance the performance of buildings, PACE is a public-private partnership financed with private capital.


I am a board member of PACENation, an advocacy group that envisions a future in which PACE financing is universally available to fund energy efficiency, renewable energy, water conservation, and building resiliency upgrades for all property owners. I encourage you and others to reexamine past projects and explore future PACE opportunities. I would be happy to share examples of cases where this type of financing has proven beneficial for residential and commercial applications.


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