The Energy Alliance Group of Michigan recently made a proposal to a business owner detailing a half million dollar energy efficiency upgrade that would replace existing outdated energy hungry products with energy efficient technology. The business owner and his CFO looked at the numbers and said very simply:
“This is a no brainer! Why wouldn’t we do this?”
Why was it a “no brainer”? Here’s where even I had a hard time grasping the facts and where it “sounds too good to be true”. What the business owner understood, in mere moments, was simply this – it was going to cost him money if he decided to turn down the project or delay getting started!
The financial bottom line was detailed in this way – after installing all the energy efficient upgrades, for every dollar that was previously spent on energy – 87 cents of it would now pay for energy PLUS the cost of the energy upgrades. Fully 13 cents of that dollar would now go into their pockets. The whole project would be paid for out of the drastically reduced amount of energy being used in conjunction with a creative financing program known as PACE!
What is PACE?
PACE stands for Property Assessed Clean Energy. One of the hallmarks of the program is that energy savings MUST be guaranteed and the project MUST result in a positive cash flow in comparison to the pre-project energy usage. The contractor(s) doing the energy upgrade guarantee the savings. Here’s a 90 second video that explains PACE very simply:
PACE is appealing to companies as well as lenders because it protects cash flow. A company can invest in energy upgrades without a huge up front expense and lenders know their financing is secure!
Andy Levin and his Lean & Green Michigan organization have been the driving force behind the PACE initiative. They have a growing list of PACE projects and many more in the planning stages. The Energy Alliance Group of Michigan is planning to announce another PACE project of an iconic Detroit entertainment venue as soon as the final documents are signed.
The PACE program must be approved by local governments and just recently it was approved in Kalamazoo and Montcalm counties. Even though it may sound too good to be true, energy efficiency upgrades can save enough money to fund upgrades out of energy savings. Thanks to the PACE program, energy efficiency projects will be expanding throughout Michigan!
Planning an Energy Efficiency Upgrade?
Energy efficiency projects often stall because of concerns about costs, a lack of capital or the time it takes to see a return-on-investment. To explain how PACE addresses those concerns The Energy Alliance Group of Michigan is hosting a free webinar on July 15, 2015. The webinar will explain how to overcome the barriers to energy efficiency utilizing the energy efficiency financing program known as PACE. To register for this informative event simply click HERE.