Financial Innovations like PACE may be crucial the expansion of solar markets in commercial real estate. PACE financiers invested $252 million in 734 commercial buildings in 14 states.

Though the solar industry has changed significantly since the 1970, the solar energy sector is still a long way from adoption by the commercial real estate industry sector. This includes the lag in adoption by commercial property investors.

Much of the execution within this sector is limited to commercial real estate properties specifically, where only credit-worthy large entities either own or have long-term leases, along with property control which supports the solar project developers credit requirements and their investors. This is a key indicator to the growth potential with CRE in solar markets.

Thankfully, financial innovations like property-assessed clean energy (PACE), invested $252 million in 734 commercial buildings across 14 states, have been in support of renewable energy improvements. Green Tech Media wrote in December 2015 that more than $1 billion has been invested in entities that finance commercial PACE, or C-PACE, projects.

GTM’s highlighted information appear to confirm that “ample investment capital” is present for solar energy projects which are located in PACE-friendly locations.

PACE is required to be enabled with a state legislation and then undergo a municipal or county opt-in process.

Specifically, there are presently 32 states including Washington, D.C. that have this legislation, with just 16 states having active C-PACE programs.

The solar investment tax credit allows investors in solar energy systems to claim up to 30 percent of their solar installation costs as a credit on their taxes, according to Urban Land Institute. This program was extended by five years in December and is forecasted to drive innovation and investment in commercial-scale solar power.

PACE mechanism has been embraced by scores of property owners, ranging from multinational REITs to main street business owners. Since 2009, the size of commercial PACE projects has ranged nationally from $5 thousand to $7 million, proving its versatility.

Jack Rizzo Managing Director, Global Construction and Renewable Energy, Prologis Inc. commented on the Pace Nation website, “Prologis is participating in the PACE program in order to promote new, innovative solutions for financing sustainable building improvements. It provides the flexibility to drive more energy improvement programs and that’s something everyone should embrace.”

Presently, over 80 percent of the United States population is enabled for PACE legislation. The commercial programs are active in 16 states: AR, CA, CO, CT, FL, GA, KY, MD, MI, MN, MO, NY, OH, UT, TX, WI, and DC. There are four funded programs located in Florida.