Grand Rapids, Michigan recently joined a growing list of cities committed to reducing energy use by 50%!
Collectively known as 2030 Districts, the goal is to achieve the 50% reduction by the year 2030! This will require creative solutions to address the obstacle standing in the way of most energy reduction goals – how to pay for the new energy-saving technologies? It’s the same obstacle causing many of us to still use the 5% efficient incandescent bulb when a 90% efficient (but more expensive) LED is available!
What if LEDs could be installed today and paid for with the resultant savings?
As a Professional Stakeholder for the Grand Rapids 2030 District, The Energy Alliance Group of Michigan (EAG) has depended on V.P. Curt Monhart to educate decision makers on overcoming the financing obstacle energy projects often must confront.
Monhart, while at a recent event hosted by The Michigan Energy Efficiency Contractors Association (MEECA), met the executive of a company involved in commercial energy upgrades. The topic got around to project financing and how it stalls many projects.
Monhart asked the executive if he was familiar with Property Assessed Clean Energy (PACE) as a financing source. Even though the program has been approved for use in Michigan since 2010 his answer was “No”.
When Monhart was pressed for more details about PACE he noted two significant elements of the energy specific financing:
- 100% project financing
- Funds energy efficiency, water conservation and renewable energy
It was at that point Monhart’s listener asked: “When can we talk?”
Monhart realized the lack of awareness associated with PACE would need to be overcome if goals such as those of 2030 Districts were going to be achieved.
Since PACE needs to be approved within the county or municipality where a building is located, Monhart created a benefit list to help decision makers understand the value of adopting the program. The list includes:
- Creates economic development opportunities with zero taxpayer funding
- Provides property owners with capital for funding building improvements
- Creates jobs for contractors, architects, vendors and trades
- Supports modernization of outdated and underutilized buildings
- Upgrades improve tenant satisfaction and retention
- Modernized buildings increase property values
- Third party administration of PACE underwriting
- No cost to the county or municipality
“The opportunity that PACE offers is the ability to do the project while allowing for cash on hand to go toward growing the business rather than updating the buildings.” The Bemidji Pioneer
Monhart took it one step further and created a webcast to educate owners and managers of commercial real estate having volunteered to bring their buildings into alignment with the goals of the 2030 Districts. The webcast is designed to increase the awareness of PACE as well as the many other resources available that make achieving energy efficiency affordable.
It is now possible to install highly efficient energy technology today and pay for the upgrades using the savings that result! For most projects, the resultant savings are greater than the entire cost of the project. By undertaking an energy efficiency upgrade, the building owner realizes an improved bottom line versus maintaining the status quo.
The Webcast discusses how to increase the profitability and value of commercial real estate using energy efficiency and various cost reduction strategies. The webcast can be accessed by clicking on the following title:
Here’s a look at the advantages PACE provides over traditional financing mechanism from the webcast:
The 2030 Districts goal of a 50% reduction in downtown energy use has broad appeal as evidenced by the over 10 million square feet of commercial property already committed to it in Grand Rapids alone!
The financing mechanism for achieving that goal is now available with the creation of a powerful public-private partnership of local governments, property owners, lenders, and contractors. As awareness of PACE and other energy specific funding options grow, so too will the number of energy projects as illustrated by this graphic:
Cumulative Commercial Pace Financing
“PACE enables property owners to pay for energy efficiency upgrades with a special assessment on their property – just like those levied for sewers, streets, sidewalks and other improvements.” Curt Monhart
You can register for the webcast – Increasing the Profitability and Value of Commercial Real Estate – by going HERE!
Graphic Credit: PaceNation