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Get a Free QuoteFinance 100% of your commercial solar project through a property tax assessment — no personal guarantee, 20-30 year terms, and the obligation transfers with the property. C-PACE is active in Austin, Dallas, Houston, San Antonio, and Fort Worth.
Upfront Cost
$0
100% project financing
Term Length
20-30 yr
Fixed-rate repayment
Interest Rates
5-8%
2026 TX C-PACE range
ITC + MACRS
Yes
Owner claims both
C-PACE (Commercial Property Assessed Clean Energy) allows Texas commercial property owners to finance 100% of solar installations through a voluntary property tax assessment. The assessment is repaid over 20-30 years at 5-8% fixed interest and automatically transfers if the property is sold. Active programs exist in Austin (Travis County, since 2016), Dallas (2019), Houston (Harris County, 2020), San Antonio (Bexar County, 2021), and Fort Worth (Tarrant County, 2022). Unlike PPAs, the property owner retains ownership and can claim the Section 48/48E ITC (30%+ base) and MACRS 5-year depreciation (20% bonus in 2026). No personal guarantee is required — the debt is tied to the property, not the borrower.
C-PACE is a property-secured financing mechanism authorized by Texas Chapter 399 of the Local Government Code. Instead of a traditional loan, the financing is structured as a voluntary assessment on the property tax bill — similar to a special assessment district. This structure gives C-PACE several unique advantages that make it ideal for commercial solar in Texas's deregulated energy market.
The TX-PACE Authority serves as the statewide program administrator, working with individual counties and cities to implement local C-PACE programs. When a commercial property owner wants to install solar, they apply through the TX-PACE Authority, which facilitates the connection with capital providers (the entities that actually fund the project). Multiple capital providers compete for each deal, which helps keep rates competitive.
Texas is particularly well-suited for C-PACE solar financing because the state has no income tax, which means federal tax benefits (ITC and MACRS) are the primary incentive mechanisms. Unlike a PPA where the developer claims these benefits, C-PACE allows the property owner to retain full ownership and claim the Section 48/48E ITC (30% base, up to 70% with adders) and MACRS 5-year depreciation (with 20% bonus in 2026). This dramatically reduces the effective cost of the solar system while requiring zero upfront capital.
The 100% property tax exemption for solar equipment in Texas (Tax Code Section 11.27, Form 50-123) means the solar system adds no additional property tax burden despite improving the property. Combined with C-PACE repayment through the tax bill, this creates an elegant financing structure where the property's energy savings exceed the C-PACE payment from day one.
Five major Texas metros have adopted C-PACE programs, covering the majority of the state's commercial property market. Each program operates under the TX-PACE Authority framework but has locally specific minimum project sizes and eligible property types. Travis County (Austin) was the pioneer, launching in 2016, with Dallas, Houston, San Antonio, and Fort Worth following between 2019-2022.
Travis County was the first TX jurisdiction to adopt C-PACE. Strong pipeline of solar + battery projects. Austin Energy VoS (9.91 cents/kWh) makes solar economics especially strong here.
Dallas joined C-PACE in 2019 and has seen accelerating adoption. Oncor territory with deregulated REP rates. Large warehouse and retail portfolio opportunities.
Houston is the largest C-PACE market in TX by property value. CenterPoint delivery territory. Hurricane resilience (solar + battery) is a key driver. Many energy-sector corporate campuses.
CPS Energy territory (municipal utility). CPS avoided cost rate (3-4 cents/kWh) for exports means self-consumption optimization is critical. C-PACE helps fund right-sized systems.
Tarrant County adopted C-PACE more recently. Oncor delivery territory. Growing adoption among logistics, manufacturing, and retail properties.
More Texas counties are expected to adopt C-PACE programs in 2026-2027. If your property is outside the five active metro areas, check with the TX-PACE Authority for upcoming program expansions. Some counties are in the adoption process and may launch programs by late 2026.
The typical C-PACE timeline in Texas is 12-20 weeks from initial application to construction start, with the lender consent process often being the longest phase. Planning ahead is critical, especially for projects aiming to begin construction before the July 4, 2026 ITC deadline.
Property owner identifies eligible improvements. An energy audit or engineering assessment quantifies savings. Solar installer provides system design and production estimates.
Submit application to TX-PACE Authority or local program administrator. Include property information, improvement scope, estimated costs, and projected energy savings.
C-PACE capital providers compete to finance the project. The property owner selects based on rate, terms, and conditions. Multiple providers active in TX market.
Existing mortgage lender must consent to the C-PACE assessment. This is often the longest step. Lenders evaluate whether the improvements increase property value sufficiently.
C-PACE assessment is recorded against the property. Funds are disbursed to the contractor. The assessment appears on the property tax bill.
Solar system is installed. Disbursements may be phased based on construction milestones. Inspections verify proper installation.
System is commissioned and production is verified. Semi-annual or annual C-PACE repayments begin via the property tax bill. ITC is claimed on federal tax return.
If your property has an existing mortgage, lender consent is typically the longest and most unpredictable step. Start the consent process early — ideally before finalizing your solar design. Some C-PACE capital providers specialize in facilitating lender consent and have established relationships with major commercial lenders active in Texas. Properties with no existing mortgage can skip this step entirely.
Every commercial solar financing option has trade-offs. C-PACE stands out for zero upfront cost, transferability, and the ability to claim ITC/MACRS — but higher interest rates than conventional debt. The comparison below shows how each option works for a Texas commercial property.
| Feature | C-PACE | Commercial Loan | PPA | Cash |
|---|---|---|---|---|
| Upfront Cost | $0 (100% financed) | 10-20% down payment | $0 (third-party owns) | 100% out of pocket |
| Term Length | 20-30 years | 5-15 years | 15-25 years | N/A |
| Interest Rate (2026) | 5-8% | 7-12% | N/A ($/kWh) | N/A |
| Personal Guarantee | None — tied to property | Usually required | None | N/A |
| Transfers with Sale | Yes — auto-transfers | No — must pay off | Requires buyer consent | N/A |
| ITC Claimable? | Yes — property owner claims | Yes — borrower claims | No — developer claims | Yes — owner claims |
| MACRS Claimable? | Yes — property owner claims | Yes — borrower claims | No — developer claims | Yes — owner claims |
| Balance Sheet Impact | Off-balance-sheet (varies by GAAP) | On-balance-sheet debt | Operating expense | Capital expenditure |
| Approval Process | 60-90 days (lender consent) | 30-60 days | 60-120 days | Immediate |
C-PACE in Texas finances more than just solar panels. Any improvement that reduces energy consumption, water consumption, or renewable energy generation is eligible. Bundling solar with battery storage, HVAC upgrades, or building envelope improvements in a single C-PACE transaction can increase the total savings and improve the savings-to-investment ratio (SIR) required for approval.
| Category | Examples | Typical Cost |
|---|---|---|
| Solar PV | Rooftop arrays, carport solar, ground-mount systems | $1.10-$2.20/W |
| Battery Storage | Lithium-ion BESS, peak shaving, backup power | $400-$700/kWh |
| HVAC Upgrades | Commercial heat pumps, VRF systems, chiller replacements | $15,000-$200,000+ |
| Building Envelope | Roof insulation, window upgrades, cool roofing | $5-$25/sq ft |
| Lighting | LED retrofits, lighting controls, daylighting | $2-$8/sq ft |
| EV Charging | Level 2 and DC fast chargers for commercial properties | $5,000-$100,000+ |
| Water Conservation | Rainwater harvesting, irrigation efficiency, cooling tower optimization | Varies |
Many Texas C-PACE projects bundle solar with battery storage and HVAC upgrades in a single transaction. A warehouse in Houston, for example, might combine a 300 kW solar array, 200 kWh battery for peak shaving, and a VRF HVAC system replacement in one C-PACE assessment of $800,000+. The combined savings exceed what solar alone would achieve, and the single closing reduces transaction costs. The ITC applies to the solar and battery components, while the HVAC and envelope upgrades provide additional energy savings that improve the overall cash flow.
The power of C-PACE is that you finance 100% of the project while still claiming all federal tax benefits as the system owner. Here is how the math works for a typical Texas commercial solar project. Remember: Texas has no state income tax, so these federal benefits are the primary tax incentives available.
Result: You invest $0 upfront via C-PACE and receive $149,504 in federal tax benefits in Year 1 alone — that is 47% of the system cost returned as tax savings while making zero out-of-pocket investment. Annual C-PACE payments of $26,200 are fully offset by $27,900 in energy savings, making the project cash-flow positive from day one. The remaining 5 years of MACRS depreciation provide an additional ~$32,300 in tax savings.
Texas provides a 100% property tax exemption for solar energy devices under Tax Code Section 11.27. Property owners must file Form 50-123 with their county appraisal district to claim the exemption. This exemption ensures that installing solar panels does not increase your property tax assessment — a critical consideration for commercial properties where higher assessed values directly increase tax liability.
The interaction between C-PACE and the property tax exemption is particularly favorable. While the C-PACE assessment appears on the property tax bill as a separate line item, it is not a property tax — it is a voluntary assessment for the energy improvement. The solar property tax exemption prevents the solar system from increasing the assessed value of the property, while the C-PACE assessment provides the financing mechanism. The two operate independently and do not conflict.
For C-PACE projects, filing Form 50-123 is essential. Without the exemption, the county appraisal district could increase the property's assessed value by the cost of the solar system, creating a tax increase that offsets some of the energy savings. With the exemption, the full energy savings flow through to offset the C-PACE assessment, maximizing cash flow and return on investment.
Lender consent is the most frequently cited barrier to C-PACE adoption in Texas. Because a C-PACE assessment creates a senior lien on the property (it is collected through the property tax system), existing mortgage lenders must consent to the assessment being placed ahead of their lien. Texas law (Chapter 399) requires this consent as a condition of the C-PACE transaction.
In practice, lender consent rates have improved significantly as C-PACE has become more established. The key arguments for lender consent include: (1) the energy improvements increase property value and cash flow, reducing credit risk; (2) the C-PACE assessment is typically a small fraction of the property value (2-10%); (3) the property becomes more attractive to tenants and buyers with lower operating costs; and (4) if the borrower defaults, the C-PACE assessment is usually current because it is structured to be cash-flow positive.
Strategies for obtaining lender consent: Start early in the process (at least 8 weeks before you need the consent). Provide the lender with a professional energy assessment showing the improvement's impact on NOI. Work with a C-PACE capital provider experienced in lender negotiations. If your primary lender declines, refinancing with a C-PACE-friendly lender may be an option — several national lenders have standard C-PACE consent policies.
Major national banks with established C-PACE consent policies typically process consent in 2-3 weeks. Standard procedures exist for familiar assessment structures.
Smaller lenders may not have standard C-PACE policies. Expect 4-6 weeks and plan to educate the lender on C-PACE structure and benefits. Provide comprehensive project documentation.
Properties with CMBS or securitized debt face the most difficulty obtaining consent due to pooling and servicing agreements. May require special servicer approval, which can take 6+ weeks or be denied.
Complete guide: ITC stacking, MACRS, pricing by system size, ERCOT rates, and ROI analysis.
Model your project IRR with C-PACE financing, ITC, MACRS, and TX-specific energy savings.
Small commercial solar ($1.80-$2.20/W). C-PACE minimums, case studies, and financing options for SMBs.
C-PACE (Commercial Property Assessed Clean Energy) is a financing mechanism that allows Texas commercial property owners to finance 100% of solar and other clean energy improvements through a voluntary assessment on their property tax bill. The assessment is tied to the property, not the borrower, meaning it automatically transfers if the property is sold. Texas authorized C-PACE through Chapter 399 of the Local Government Code, and programs are active in Austin (Travis County), Dallas, Houston (Harris County), San Antonio (Bexar County), and Fort Worth (Tarrant County). Terms range from 20-30 years with interest rates of 5-8% in 2026.
Our team connects you with C-PACE capital providers and handles the full application process — from energy assessment to lender consent facilitation.