Department Of Commerce

Last Best PACE is a voluntary program that allows commercial, industrial, agricultural and multifamily property owners to access private-sector financing for permanently installed improvements that reduce energy or water use, add renewable energy or enhance public safety or resiliency.

New construction, renovations and even retroactive projects, if completed in the last three years, are eligible. C-PACE can provide up to 100% financing for existing-building retrofits and 25% to 30% of financing for new construction, subject to lender underwriting. Projects are financed through owner-arranged, private-sector loans; no state or federal funds are involved. Terms and interest rates are set between the borrower and lender.

C-PACE financing is secured by a voluntary tax assessment on the property, billed as a separate line item on annual property taxes. Banks, credit unions and private capital providers supply the financing. Properties with existing debt must obtain senior lender consent. Terms may be fixed or variable and can extend up to 30 years. Financing is typically non-recourse, though new construction may require a construction-phase guarantee. Loans are amortized over the useful life of the improvements, often resulting in revenue-neutral or cash-flow-positive projects. C-PACE assessments are non-accelerable — in the event of a default, only the amount in arrears comes due.

C-PACE assessments can transfer with the property upon sale, with each owner responsible only for the portion accruing during their ownership. This structure helps overcome common barriers to investing in efficiency, conservation, renewable energy and resiliency improvements.