Financing is critical to the success of any energy solution project. Our processes can help reduce operating, energy, and water costs, which in turn can help pay for renovations. EAG also identifies financing options that best meet our clients’ needs and result in the best ROI.
In addition to commercial loans and common financing options like capital and operating leases, we offer a number of options that many clients are not familiar with. These include:
- Property Assessed Clean Energy (PACE)
- State Finance Programs
- Energy Service Agreements (ESA) and Managed Service Agreements (MSA)
- Power Purchase Agreement (PPA)
One of the key benefits of working with EAG is our complete knowledge of all available federal, state, and local financing options. We also assist clients throughout the qualification and application process.
Property Assessed Clean Energy (PACE)
This is an innovative vehicle for financing energy upgrades for commercial, industrial, and multifamily properties. All project funding is provided by private sources, and it allows up to 100% of loan-to-value (LTV) financing. This helps property owners save money while making their buildings more energy efficient.
• All traditional energy efficient improvements
• Renewable energy improvements
• Water efficiency improvements
• New manufacturing equipment that saves water or energy
Like property taxes, PACE financing is a special assessment that is senior to any mortgage, which makes it exceptionally secure. The loan Is secured through a tax lien on the building, which “runs with the land.” That means it moves to the new owner if the property is sold. The financing term is 5-20 years, extending through the useful life of the improvements. It is also at a lower interest rate than most commercial loans because of the stronger lien position.
Download the PACE_EAG_Overview.
State Finance Programs
For example, in the state of Michigan, the “Michigan Saves” program is a non-profit financing organization that’s dedicated to making energy improvements affordable. This program will finance a project up to $150,000 for 5 years at an interest rate of either 1.99% for companies involved in the food industry or 3.99% for other businesses.
Your state may also provide a similar program. Our team can help you find out if you qualify.
Energy Service Agreements (ESA) and Managed Service Agreements (MSA)
ESAs and MSAs are how Energy Service Companies (ESCOs) operate. These are financing solutions where energy efficiency is “outsourced” to a third party that owns and maintains the energy efficiency equipment. The building owner agrees to pay the third party based on the realized energy savings.
Power Purchase Agreement (PPA)
A PPA is similar to an energy service agreement. Instead, however, a PPA provider owns and maintains energy-generation equipment, like solar panels. The building owner agrees to purchase the energy from the PPA at an agreed upon rate, which is typically below what is charged by the utility.