How C-PACE Provides Liquidity in the COVID-19 Economy

When building owners established their 2020 budgets late last year, none could have anticipated the disruption in the capital markets caused by COVID-19. Many building owners are now quite concerned about their liquidity, not just due to the substantial decline in revenues, but also:

• routine investments needed to maintain facilities,
• unplanned investments to improve indoor air quality to combat the spread of COVID-19, and
• prior commitments related to new construction or major renovations.

These liquidity constraints have caused many building owners to think outside the box and consider non-traditional sources of funding such as the C-PACE program. In addition to reviewing the basics, this article explains how C-PACE can provide valuable liquidity from projects completed over the last 1-3 years. Before diving into details about what types of projects are eligible for C-PACE, let’s first understand the unique benefits of the program.

Why C-PACE Appeals to Building Owners

Due to these unique benefits, the C-PACE program has enjoyed tremendous growth resulting in over 2,400 transactions by the end of 2019. The program has great momentum, as discussed in articles by Forbes and the NY Times (see the Addendum at the end of the article).

Let’s learn more about C-PACE, starting with the types and location of projects that can be funded.

C-PACE Eligible Projects

Project Types: C-PACE can be used to finance new construction, renovation, or retrofits for the installed costs of investments in: energy efficiency, water conservation, renewable energy, and resiliency (“Eligible Projects”) in two broad categories.

Prior Eligible Projects: completed over the past 1 – 3 years, which can be “retroactively financed” providing much needed liquidity (see Recapitalization Funding Opportunity below).

Future Eligible Projects: upcoming projects that can be funded also providing much needed liquidity.

Project Location: C-PACE is currently available in much of the US and is rapidly expanding its reach (see Location. Location. Location. below).

Let’s look at how C-PACE’s unique structure is driving its growth.

C-PACE 101

C-PACE programs have provided over $1.5 billion to fund all types of projects resulting from new construction, major renovations, or retrofits. The basic program structure of C-PACE recognizes energy-saving, renewable and resiliency infrastructure improvements as public benefits. Building owners can finance these improvements and repay them through a special tax assessment, similar to a property tax payment.

The C-PACE structure allows for long-term, low cost financing that is based on the property itself, not the credit of the property owner or underlying business.

Recapitalization Funding Opportunity

C-PACE is most commonly used to fund Future Eligible Projects. However, for Prior Eligible Projects completed in the past 1 – 3 years, building owners can benefit from an infusion of capital, and in many cases with no limitations on the use of proceeds from the C-PACE lender.

In those cases, Recapitalization Funding is incremental if other financing arrangements do not require a pay down of 100% of the C-PACE proceeds. Even if all proceeds must be used to pay down other debt, building owners can still benefit:

• payments can be deferred for the first 24 months, preserving near term liquidity, and
• 20 to 30-year C-PACE financing will likely reduce annual debt service and extend overall debt maturities.
See the Addendum at the end of this article for Eligible Buildings for C-PACE.

Location. Location. Location.

To access C-PACE funding, your building must be located in the green states in a jurisdiction where the program has been established.

Note, in most cases, C-PACE is not active throughout the entire state. That is because the program is created statutorily at the state level but must be sponsored by the local district or local taxing authority (county or municipality).

Determining whether a project is an Eligible Project varies as the C-PACE program is not identical throughout the US. Funding for a Recapitalization is not offered in all the active states shown above, however, guidelines are being determined and possibly expanded as this article is being written.

The program is growing rapidly and determining when each jurisdiction will adopt the program is fluid. Trying to keep up can make your head spin. That is why EnFlux is here – we can help you sift through the process and determine if C-PACE is available for your projects. Even if the program is not available yet, we can share the latest on the timing of opt-in for your area.


• COVID-19 has created a liquidity problem for many building owners due to upheaval in the capital markets combined with a severe decline in cash flow.

• C-PACE is growing rapidly as building owners have begun to embrace the uniqueness of the program to fund Eligible Projects.

• Prior Eligible Projects completed over the prior 1 – 3 years can be used to for Recapitalization Funding, providing much-needed liquidity for building owners. The proceeds can most often be used without restriction from the C-PACE lender.

• C-PACE can provide capital for Future Eligible Projects.

• The determination of whether an investment is an Eligible Project varies, as the C-PACE program is not identical throughout the US. EnFlux can guide building owners through the process.

Questions? Feel free to reach out to Larry Derrett, founder, and CEO of EnFlux Building Solutions at 713.714.0575,, or


Learn More About C-PACE

Two articles discussing why C-PACE is gaining traction in the US.


New York Times

Eligible Buildings for C-PACE

Examples of the types of buildings who can benefit from C-PACE. For all of these types of buildings, C-PACE can fund the investment needed to improve air quality and minimize the spread of COViD-19.

• Retail: all sizes and types of retail, from independent locations to chains and multi-tenant.

• Office: Class A, B, or C offices can benefit from the C-PACE billing structure which helps to address the issue of split incentives.

• Healthcare and Senior Living: lighting, building controls, and HVAC contribute to a high-quality patient experience while renewables and backup power can ensure continuity of care.

• Industrial/Manufacturing: energy efficiency and renewables can fuel the growth of industrial firms by significantly reducing operating expenses.

• Hotel & Lodging: financing can support increased efficiency and sustainable infrastructure that improves marketability.

• Multifamily: increase tenant comfort and reduce maintenance costs for buildings with > 5 units.

• Nonprofits: provides funding primarily based on the locations on the building versus traditional credit requirements imposed by banks.