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Get a Free QuoteProperty Assessed Clean Energy (PACE) lets commercial property owners finance solar with $0 upfront, repaid through property tax over 20-25 years. MassDevelopment administers MA's C-PACE program. Residential PACE is not available in Massachusetts — but there are strong alternatives.
PACE (Property Assessed Clean Energy) is a financing mechanism that allows property owners to fund solar installations and energy efficiency improvements through a voluntary special assessment on their property tax bill. Unlike traditional loans, PACE financing is secured by the property itself — not the borrower's personal credit.
The concept is straightforward: a capital provider funds 100% of your solar project. In return, a special tax assessment is placed on your property. You repay the financing through your property tax bill over 20-25 years. If you sell the property, the assessment (and the solar system) transfers to the new owner.
Massachusetts has authorized C-PACE (Commercial PACE) for commercial, industrial, and multifamily (5+ unit) properties. Residential PACE (R-PACE) is not available in Massachusetts. If you're a homeowner, skip to the residential alternatives section below for financing options that work for your property.
PACE originated in 2008 when Berkeley, California became the first city to offer it. By 2026, C-PACE programs operate in 30+ states. Massachusetts authorized C-PACE through legislation, with MassDevelopment serving as the state program administrator. The program connects property owners with private capital providers who fund the improvements.
C-PACE is designed for commercial property owners. Here's what's eligible and what's not:
MassDevelopment, the state's economic development and finance agency, administers Massachusetts's C-PACE program. They serve as the bridge between property owners, capital providers, and municipalities. Here's the step-by-step process:
MassDevelopment reviews your property for C-PACE eligibility. Requirements: property in a participating municipality, property taxes current, no pending foreclosure, and the building must be a qualifying commercial, industrial, or multifamily (5+) property.
Work with a qualified installer (like NuWatt) to design your solar system and prepare technical specifications. An independent energy audit verifies the projected savings. For a 200 kW commercial rooftop, expect $280,000-$380,000 installed cost.
MassDevelopment connects your project with approved capital providers. These private lenders fund 100% of the project cost. Terms are negotiated based on project economics, property value, and energy savings projections. No personal guarantee required.
Your municipality records a C-PACE assessment (special tax lien) on the property. This secures the lender's investment. The assessment is senior to the mortgage, which is why lender consent is typically required. The assessment transfers automatically with property sale.
Solar installation proceeds. Repayment appears as a line item on your property tax bill. Payments are structured so energy savings exceed the annual C-PACE payment — cash-flow positive from year one in most MA commercial projects.
Total Timeline: 10-16 Weeks
From initial MassDevelopment inquiry to solar installation start. Larger or more complex projects may take longer. Plan ahead — the Section 48E ITC requires construction to begin before July 4, 2026.
100% financing — no upfront capital required
Cover the entire project cost including soft costs and installation
No personal credit check or guarantee
Financing is secured by the property tax lien, not personal credit
Transfers automatically with property sale
The solar system and payment obligation transfer to the new owner
Long terms reduce annual payments (20-25 years)
Structured so energy savings exceed PACE payments from year one
Off-balance-sheet treatment possible
May not appear as traditional debt on financial statements (varies by accounting treatment)
Stacks with Section 48E ITC (30-70%)
The ITC dramatically improves project economics on top of PACE financing
Stacks with SMART 3.0 incentive payments
Commercial SMART adders provide 20 years of additional revenue
No equipment ownership burden for financing company
Property owner keeps full control of the solar system
Higher interest rates than conventional loans (5.5-7.5%)
Property-secured but higher than traditional commercial lending rates
Senior property tax lien can complicate refinancing
Mortgage lenders must consent to the PACE assessment's senior position
Not available for residential properties (1-4 units)
MA has not enabled residential PACE — see alternatives below
Municipality must participate in the program
Not all MA cities and towns have opted into C-PACE
Complex application and approval process
Energy audits, municipal approvals, and legal documentation take 8-16 weeks
Lender consent required for existing mortgage holders
Some lenders may resist the senior lien position
How does C-PACE compare to the other ways to finance solar in Massachusetts in 2026?
| Feature | C-PACE | Solar Loan | HEAT Loan (Mass Save) | Cash Purchase | Propel (Concert Loan) | PPA / Lease |
|---|---|---|---|---|---|---|
| Upfront Cost | $0 | $0 | $0 | Full cost | $0 | $0 |
| Interest Rate | 5.5-7.5% | 6-8% | 0% APR | N/A | 8.99% APR | N/A (rate-based) |
| Term | 20-25 years | 10-25 years | 7 years max | N/A | 25 years | 20-25 years |
| Personal Guarantee | No | Yes | Yes | N/A | Yes | No |
| Transfers with Sale | Yes | Must pay off | Must pay off | N/A | Must pay off | Transfer or buyout |
| Federal Tax Credit | Owner claims 48E | $0 (25D dead) | $0 (25D dead) | $0 (25D dead) | 30% via Section 48 | 30% via Section 48 |
| System Ownership | Property owner | You own it | You own it | You own it | TPO until buyout | TPO company |
| SMART 3.0 Eligible | Yes | Yes | N/A (not solar) | Yes | N/A (ME/TX only) | Company keeps SMART |
| Best For | Commercial, multifamily 5+ | Residential, small commercial | Residential heat pumps + weatherization | Maximum long-term savings | Residential (ME & TX only) | Zero-risk, immediate savings |
The most compelling reason to use C-PACE for commercial solar in Massachusetts is how it stacks with the Section 48/48E Investment Tax Credit. While the residential 25D ITC expired December 31, 2025, the commercial ITC remains active for projects beginning construction before July 4, 2026.
| Credit Component | Amount | Notes |
|---|---|---|
| Base ITC (Section 48/48E) | 30% | Available for projects starting construction before July 4, 2026 |
| Domestic Content Adder (FEOC) | +10% | US-assembled panels (Silfab, REC), FEOC deadline July 4, 2026 |
| Energy Community Adder | +10% | Coal closure areas, high-unemployment fossil fuel counties |
| Low-Income Adder | +10-20% | Qualified LMI census tracts or facilities serving low-income tenants |
| Maximum Total ITC | Up to 70% | All adders combined — 40-50% typical for MA commercial projects |
Section 48E Deadline: July 4, 2026
Construction must begin (not just be contracted) before July 4, 2026. With C-PACE's 10-16 week application process, you need to start now to meet the deadline.
Commercial solar projects financed through C-PACE remain fully eligible for Massachusetts's SMART (Solar Massachusetts Renewable Target) 3.0 incentive payments. This creates a powerful revenue stack that improves cash flow significantly.
$0.03-$0.08/kWh
Per kWh produced, 20-year term. Rate depends on capacity block.
+$0.07/kWh
Additional per kWh for shared solar projects serving multiple subscribers.
+$0.05/kWh
For projects serving income-eligible subscribers or in LMI census tracts.
Important: SMART rates decline as capacity blocks fill. Earlier enrollment locks in higher rates for the full 20-year term. For a 200 kW commercial system producing approximately 240,000 kWh/year, SMART income at $0.06/kWh would be $14,400/year or $288,000 over 20 years — on top of electricity savings and ITC benefits.
If you're a Massachusetts homeowner looking for PACE-style financing, unfortunately residential PACE (R-PACE) is not available in this state. However, several strong alternatives exist. Here's what's available in 2026:
Rate
0% APR
Term
Up to 7 years
Max Amount
$50,000
Applies To
Heat pumps, weatherization, insulation
Not for solar. Best for heat pump installations paired with Mass Save rebates.
Learn moreRate
6-8% APR
Term
10-25 years
Max Amount
Varies by lender
Applies To
Solar panels, batteries, EV chargers
Standard personal loan for solar. No federal ITC benefit (25D expired). You own the system.
Learn moreRate
$0.10-$0.15/kWh (PPA) or $80-$120/mo (Lease)
Term
20-25 years
Max Amount
N/A — TPO company funds
Applies To
Solar (TPO structure)
TPO company claims Section 48E ITC (30%+) and passes savings as lower rate. You don't own the system.
Learn moreRate
Was 0% interest
Term
Was 10-15 years
Max Amount
Was $35,000
Applies To
Solar panels
This program no longer exists. Do not apply. Current alternatives: bank loans at 6-8% APR.
Learn moreFederal Residential Solar ITC (Section 25D): Expired
The 30% residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits in 2026. The only way to access federal ITC savings is through a PPA, lease, or third-party ownership (TPO) structure where the financing company claims Section 48/48E. Propel financing (ME/TX only) also uses this structure.
Let's walk through realistic scenarios for different property types in Massachusetts using C-PACE financing with the 2026 incentive stack.
Metro Boston, Eversource territory ($0.2836/kWh)
Installed Cost
$270,000
$1.80/W installed
ITC Savings (40%)
-$108,000
Base 30% + 10% FEOC
Year 1 Net Cash Flow
+$28,400/yr
Savings + SMART - PACE payment
Springfield, National Grid territory ($0.32/kWh)
Installed Cost
$150,000
$2.00/W installed
ITC Savings (50%)
-$75,000
Base + FEOC + low-income
Year 1 Net Cash Flow
+$18,500/yr
Higher rate = faster payback
Worcester area, National Grid territory ($0.32/kWh)
Installed Cost
$700,000
$1.40/W installed
ITC Savings (40%)
-$280,000
Base + FEOC
Year 1 Net Cash Flow
+$102,000/yr
Scale = massive savings
Planning to pursue C-PACE financing for your commercial solar project? Here's what you'll need to prepare:
PACE (Property Assessed Clean Energy) is a financing mechanism that funds solar and energy improvements through a special assessment on the property tax bill. In Massachusetts, C-PACE (Commercial PACE) is available for commercial, industrial, and multifamily (5+ unit) properties. MassDevelopment administers the program. Residential PACE (R-PACE) has not been enabled in Massachusetts — homeowners must use alternative financing like solar loans, PPA/lease, or the HEAT Loan for heat pumps.
No. Massachusetts has only authorized Commercial PACE (C-PACE). Residential PACE for single-family homes and small multifamily (1-4 units) is not available. Residential solar financing options include: cash purchase, solar loans (6-8% APR), PPA/lease with Section 48E savings, and the HEAT Loan (0% APR for heat pumps only, not solar). The Mass Solar Loan program ended in 2020.
MassDevelopment, the state's economic development and finance agency, administers the C-PACE program in Massachusetts. MassDevelopment reviews applications, connects property owners with approved capital providers, and oversees program compliance. Individual municipalities must opt in to enable C-PACE within their jurisdiction.
Yes. This is one of the most powerful stacking opportunities for commercial solar in MA. C-PACE provides 100% financing with no upfront cost. The property owner or a structured TPO entity claims the Section 48/48E ITC at 30% base plus potential adders (domestic content +10%, energy community +10%, low-income +10-20%) for up to 70% total. The ITC dramatically reduces the effective financed cost, often creating cash-flow-positive projects from year one.
Yes. Commercial solar systems financed through C-PACE remain eligible for SMART 3.0 incentive payments. SMART provides performance-based payments of $0.03-$0.08/kWh (depending on capacity block) over 20 years for commercial projects. Community solar projects receive an additional $0.07/kWh adder. SMART income stacks on top of the electricity savings and Section 48E ITC benefits.
The C-PACE assessment transfers automatically with the property sale. The solar system, energy savings, and remaining assessment payments all pass to the new owner. In commercial real estate, this is increasingly viewed positively — the new owner inherits below-market electricity costs and a performing solar asset. The assessment appears on the property tax bill, so buyers are aware of it during due diligence.
Typical MA C-PACE timelines: Pre-qualification with MassDevelopment takes 1-2 weeks. Project design and energy audit takes 2-4 weeks. Capital provider selection and term sheets take 3-4 weeks. Municipal approval and legal documentation take 2-4 weeks. Total from application to construction start: approximately 10-16 weeks. Larger or more complex projects may take longer.
MA C-PACE interest rates typically range from 5.5% to 7.5%, depending on project size, property characteristics, and the capital provider. While higher than prime rate, the 20-25 year term and 100% financing (no equity required) make the effective cost competitive. When combined with Section 48E ITC (30-70%) and SMART 3.0 income, most commercial solar projects achieve positive cash flow despite the higher rate.
Full comparison of MA financing options
How the commercial ITC works for homeowners
Complete commercial solar guide with ITC stacking
SMART 3.0 rates, blocks, and enrollment
TPO solar with Section 48E benefits
Sales tax + property tax exemptions
NuWatt works with commercial property owners across Massachusetts to design, install, and finance solar systems. We help navigate C-PACE applications, SMART enrollment, and Section 48E compliance. Get a free commercial solar assessment.