For many businesses, solar is a clear-cut option to manage energy expenses. While the ROI can fit the internal hurdle requirements and the project timeline is attractive, the upfront capital cost can quickly become a barrier.
This is where C-PACE financing enters the conversation.
Commercial Property Assessed Clean Energy (C-PACE) provides a solution for companies to install solar without draining their cash reserves or taking on traditional debt.
It looks different from a loan, behaves differently on your balance sheet, and can open the door to projects that otherwise stall out.
Artisun Solar is an official member of state-specific C-PACE contractor networks, and many of our current customers have turned to C-PACE financing to fund their solar projects.
To assist future and prospective customers, here’s everything business leaders need to know before considering C-PACE financing.
What is C-PACE Financing?
C-PACE is a financing structure where the cost of a solar project is repaid through a special assessment on your property tax rather than making monthly payments to your bank.
Instead, your business pays the financing back alongside your property taxes over an extended period, typically 20 to 30 years.
The key distinction: The financial obligation is tied to the property rather than the business entity.
In 2026, C-PACE is available in most states, including:
- Alaska
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Kentucky
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- Tennessee
- Texas
- Utah
- Virginia
- Washington
- Wisconsin
This list is continuing to grow as more states pass C-PACE legislation. You can access the map of states that offer C-PACE here.
How C-PACE Works in Commercial Solar
At a high level, C-PACE is straightforward:
- A solar project is designed for your facility by a commercial solar partner like Artisun Solar.
- A C-PACE capital provider funds up to 100% of the project costs with funds being sent directly to your commercial solar partner.
- The local government records a voluntary assessment on your property.
- The cost of your C-PACE financing is then repaid through your property tax bill.
Because the financing is attached to your property, it typically doesn’t require a personal guarantee and may qualify as off-balance sheet in some situations.
Note for CFOs: this combination makes C-PACE an attractive financing option worth exploring.
Why Businesses Consider C-PACE
There are four main reasons that businesses consider C-PACE for their solar funding.
1. No upfront capital required
C-PACE can cover the full cost of solar installation, including the design, equipment, and construction. This allows companies to move forward without reallocating capital from operations, expansion, or hiring.
2. Long repayment terms
Repayment terms of C-PACE can extend up to 30 years. As a result, the costs are spread out and payments can better align the life of the solar system. Energy savings can offset a large portion of the payment from Day One.
3. Transfers with the property
If the building is sold, the remaining C-PACE obligation typically transfers to the new owner rather than being restricted to the former owner. For businesses concerned about what will happen to C-PACE financing if they move, this removes the hesitation tied to long-term energy investments.
4. Potential balance sheet advantages
C-PACE is set up as a property tax assessment, not a traditional loan. That means it’s often recorded as a long-term liability tied to the property rather than a conventional bank debt line. In some cases, it may not be classified the same way as other loans when lenders look at leverage or debt covenants, which can help preserve borrowing capacity. Many businesses use it alongside other financing to round out their capital stack, not replace it.
5. Combine with other incentives
C-PACE can be combined with other commercial solar incentives, such as solar tax credits, local rebates, and tax depreciation.
Where C-PACE Fits Best
C-PACE isn’t the right fit for every commercial solar project, but it works best in situations such as:
- Owner-occupied commercial buildings with strong equity
- Long-term hold strategies where the property won’t be sold quickly
- Projects where preserving cash is a higher priority than minimizing total financing cost
- Developments or retrofits where multiple capital sources are being stacked
It’s also common to use C-PACE to bridge funding gaps where traditional lenders won’t cover 100% of project costs.
Have more questions about C-PACE or commercial solar? Click here to reach out to our team for answers or to start your own free solar analysis.
C-PACE Trade-offs
While C-PACE is an ideal solution for many businesses, a few key considerations should be reviewed first.
Note: Artisun Solar always recommends consulting your accounting team for additional review and insight.
1. C-PACE creates a property lien
A C-PACE assessment is recorded as a lien against the property and can impact future refinancing or require lender approval before moving forward.
2. It may affect senior debt
Because repayment is tied to property taxes, some lenders view C-PACE as senior to existing debt. This may mean you’ll need consent from your mortgage lender prior to closing.
3. Total costs can be higher
The long repayment terms reduce annual payments but can increase total cost over time. For some businesses, that tradeoff is acceptable in exchange for preserving capital on an asset with a 30+ year lifespan.
4. Availability is limited by location
Because C-PACE programs are enabled on state and local levels rather than at the federal level, availability and structure depend heavily on where your property is listed. We’ve listed the states with available C-PACE programs above, or you can find more details here.
How C-PACE Compares to Other Solar Financing Options
Businesses considering solar are weighing the tradeoff between:
- Upfront cost
- Control over their system
- Long-term cash flow and balance sheet
Each financing path shifts those factors, which makes the “best” option unique to what matters most to your business.
Here’s an overview of common solar financing options including cash purchase, traditional loans, lease and power purchase agreements (PPAs), and C-PACE:
Cash Purchase
- Explanation: A solar project is paid in full by cash.
- Benefits: Cash purchases have the cleanest, long-term economics that avoid interest charges or financing fees. The total cost of ownership is the lowest of any financing option. The business/property owner retains full ownership of the system and can capture tax credits and depreciation.
- Trade-off: Cash purchases require significant liquidity upfront, making it difficult when competing with other capital projects that have higher priority or higher ROI.
Traditional Loan
- Explanation: A conventional loan from a bank or lender used to finance the solar project that is repaid over time with interest.
- Benefits: Traditional loans spread the project costs over time while preserving capital for other projects. The business/property owner retains full ownership of the system and can capture tax credits and depreciation.
- Trade-off: Lenders usually require a credit review and a personal or corporate guarantee in many cases. For borrowers with a strong balance sheet, this is manageable. For others, the underwriting process or guarantee itself can be a barrier.
C-PACE
- Explanation: C-PACE is a financing structure where the project cost is repaid through a special assessment attached to the property’s tax bill over a 20-30 year period.
- Benefits: C-PACE doesn’t require capital at closing or personal/corporate guarantee. The business/property owner retains full ownership of the system, and repayment terms are long enough to align with the life of the system while keeping annual payments manageable.
- Trade-off: Because the assessment is attached to the property itself, prospective buyers and existing mortgage lenders will see it on the title. Properties with an existing mortgage typically require lender consent before a C-PACE assessment can be placed. While it’s available in most of the country, it’s not available in all states (see the list above).
Lease and Power Purchase Agreement (PPAs)
- Explanation: For both lease and PPAs, a third-party developer owns and operates the solar system. If using a lease, the business pays a fixed monthly payment to lease the system. If using a PPA, the business purchases the power generated by the system at a set rate.
- Benefits: Both leases and PPAs remove ownership responsibilities and upfront costs. Payments are predictable, and while solar equipment is largely low-maintenance, any maintenance needs fall on the developer rather than the property owner.
- Trade-off: Unlike other financing options, businesses/property owners can’t capture tax credits or depreciation. The property also carries a long-term contractual obligation to an outside counterparty, which complicates a future sale or refinance.
Is C-PACE a Good Fit for Your Business?
C-PACE can make solar financially accessible in a way few other options can, but turning that opportunity into a successful project still requires the right approach and experienced execution.
Artisun Solar is the #3 commercial solar installer in the nation and a trusted partner for businesses using C-PACE to move projects forward without upfront capital.
If you’re considering solar, connect with our team to get a clear evaluation of your property and a straightforward path to making your project a reality.
Click here to start a free solar analysis on your facility or to submit any questions you may have about commercial solar, financing, and more.
