C-PACE is based on the principle that commercial energy projects – such as installing solar equipment or improving a building’s heat recovery system – are public benefits like sewers, roads, and bridges. C-PACE legislation authorizes counties to work with private capital providers to provide upfront financing to commercial property owners for qualifying improvement projects, and to collect the repayment through annual or semi-annual surcharges on the property’s tax bill.

In order to use C-PACE, jurisdictions must adopt enabling legislation through an ordinance that adheres to the principles established by state legislation. Jurisdictions must also sign a Locality Agreement with the Maryland Clean Energy Center.

By lowering a property’s energy and operational expenses and potentially making buildings safer and healthier, C-PACE makes an asset more inviting to tenants. After the cost of the improvements are paid off through the C-PACE loan, building owners retain the improvements. Assets that use C-PACE achieve higher valuations through better tenant retention and retained ownership of improvements (like solar and upgraded HVAC systems). And with C-PACE, there are no upfront costs: C-PACE pays for 100% of a project and is repaid by the surcharge over a 20+ year period. Moreover, the owner can sell the property, treat any expense as operational, and pass on costs to tenants.