7/19/2013 | By Carisa Chappell
As commercial real estate owners continue to explore ways to finance sustainability upgrades to their assets, green service providers are developing alternative funding options in an effort to facilitate the adoption of their products.
Some of the more non-traditional financing options were discussed during a July 18 webcast sponsored by CorAdvisors, an energy management and intelligent building systems integrator for commercial and corporate facilities.
“The largest portion of a building’s operating expense is energy,” said Greg Fox, director of business development at Constellation Energy, which provides electricity, natural gas, and sustainable solutions to residential and business customers. “It represents 30 percent of a typical office building’s cost.”
Fox also discussed the “Efficiency Made Easy” program offered by Constellation. The program allows businesses to implement high-impact efficiency measures without direct capital expenditures. Instead, the cost of the efficiency measures is factored into the price per kilowatt hour of electricity used and reflected on companies’ electric bills. The program can be used on technologies such as low-flow toilets and lighting system upgrades, according to Fox.
“It makes it very simple from a budgeting standpoint,” Fox said. “There are no new bills or line items. It’s just something that’s embedded in the rate.”
One financing program that has been initiated by local governments is “PACE.” The acronym stands for “property assessed clean energy.” Under the PACE financing program, building retrofits or upgrades are paid back through property tax assessments. As such, the program includes no upfront cash payments. The financing has a long-term duration of up to 20 years. There is also the ability to pass payments through to tenants.
“It’s a relatively new program, but one that is catching on quickly,” said Natalie Trojan, senior director of PACENow. “We’re pretty open as to what could qualify, but it has to make sense, reduce cost and be a permanent part of your building.”
Stephen Moritz, president of AllFacilities Energy Group, spoke about the company’s energy efficiency management platform. He said it quantifies energy savings for benchmarking and helps corporations take advantage of inducements such as rebates and tax incentives.