Most commercial real estate owners have an untapped asset that could be utilized to make a property more energy efficient, sustainable and ultimately more profitable!
According to the U.S. Department of Energy, “The average commercial building wastes 30 percent of the energy it consumes. That means that if you haven’t done anything to save energy, chances are you’ll find many opportunities to do so.”
This waste represents money already in the budget that could be put to a more productive use, representing a significant profit opportunity in most commercial buildings. The problem is it’s often given secondary consideration, and only viewed as essential when all the associated costs are added up.
“Most building owners don’t realize how inefficient their building has become over time or how much wasted energy is hindering their profitability.” Scott Ringlein, EAG, CEO
Energy waste tends to creep into buildings and businesses as technology ages and newer ones become more efficient. A significant problem is the fact that outdated technologies tend to develop associated and hidden long term costs that multiply as they age:
- Increased Cost of Maintenance – often there is only enough money in the budget for repairs on equipment that is long past the point where it should have been replaced. The cost of ongoing repairs can ultimately add up to far more than the one time cost of replacement.
- Diminished Occupant / Tenant Comfort – building envelope deterioration, coupled with inefficient HVAC, can result in an uncomfortable work environment which affects production and tenant satisfaction.
- Increased Noise Pollution – Aging and outdated technology tends to be noisy compared to more efficient models. The resulting noise pollution has been shown to directly affect profitability and productivity.
- Disruptions in Production – When a key component of production becomes undependable or prone to breakdowns, the resultant loss of production can be out of proportion to the cost of upgrading the equipment.
- Frequency and Costs Associated with Replacements – If older technology has a short lifespan, in comparison to advanced technology, the cost and frequency of replacements can be greater than the cost of upgrading to newer technology.
“A strong body of literature demonstrates that substantial productivity gains can accrue from comprehensive energy efficiency improvements” Building Efficiency Initiative
How to Utilize the Hidden Asset Currently Funding Wasted Energy
With an understanding of the long term costs associated with energy inefficient and outdated technologies, a financing option known as Property Assessed Clean Energy (PACE) was initially developed and approved in California in 2008. It is now being used in over 32 states and the District of Columbia in the U.S., and is also being enacted in other countries as well.
PACE allows a property owner to pay for energy efficiency and water conservation upgrades with a special assessment on his property taxes – similar to those levied for streets, sidewalks, sewers and other improvements. Unlike traditional methods of financing, PACE provides extended terms – 20 years or more – at fixed interest rates. This makes energy upgrades with relatively long payback periods such as solar and geothermal financially justified.
The PACE financing option allows owners and tenants of commercial real estate to utilize the hidden asset represented by the cumulative cost of wasted energy. When the PACE financing option is understood by decision makers a common response is: “It will cost me more money if I continue using the equipment we currently have rather than upgrading to a highly energy efficient operation!”
The problem is most decision makers haven’t even heard about PACE and if they have, they haven’t taken the time to fully understand what it can do for them.
Webcast Details the Top 10 Benefits of the PACE Strategy!
With the goal of speeding up the learning curve associated with Property Assessed Clean Energy, EAG’s CEO Scott Ringlein created an online presentation describing the Top 10 reasons why a PACE strategy is a powerful tool for any business with the goal of increased profitability and productivity.
A short list of the top 10 benefits explained in detail during the free webcast includes:
- 100% Project Funding
- Long Term Financing
- Cash Flow Positive by Statute
- Increased Property Marketability
The webcast is geared towards facility managers but will prove valuable to anyone involved in planning, financing or approving building and business upgrade projects. At the end of the presentation each participant will be able to instantly download a 16 page document detailing how a PACE strategy can be beneficial to:
- Business Leaders
- Commercial Real Estate Owners
- Community Economic Development
To access the free webcast simply click the link below: