17 Things You Didn't Know About Energy Usage and Project Funding
Commercial buildings represent more than 40% of all the energy consumed in the U.S., so there’s obviously a lot of room for energy savings. Read on to learn more about energy consumption and how you can get the financing you need to complete energy efficiency projects.
It’s no big secret to business owners that energy costs are one of the biggest expenses their business faces. In fact, commercial buildings represent 43% of all of the energy consumed by buildings in the United States, yet are still just a tiny fraction of the energy efficiency market, according to the International Energy Agency.
It’s clear how becoming more energy efficient should be a priority for business owners. Earlier this month, the COSE/GCP Energy Team hosted a workshop on financing solutions that make energy projects feasible and help businesses become more energy efficient, thus improving their bottom line.
Listed below are the 17 things you need to know about how companies are using (or misusing) energy and how they can obtain financing to make their energy consumption more efficient.
1. Barriers to investment. According to a 2016 International Facilities Management Association study of sub-100,000-square-foot buildings, owners listed financial capacity and technical expertise continue to be barriers to investment in energy efficiency and clean energy upgrades.
2. No budget. More than three out of four owners (76%) have no specific energy budget.
3. Limited third-party options. A total of 87% of owners have limited access to third-party financing options, largely because they do not know that such financing exists.
4. No contract. Almost nine out of 10 owners (88%) have no energy services agreement or contract.
C-PACE financing could be a solution for the business owners listed above. What is C-PACE and how can it help?
5. What is C-PACE? C-PACE is a government financing policy that classifies energy-saving upgrades as a public benefit, such as a sewer, road extension, etc.
6. How can C-PACE Help? With C-PACE, private lenders provide capital to build qualifying projects and they are repaid through the property tax bill over the life of the equipment (often 20 or more years). This makes most projects cash flow positive from day one.
7. What qualifies? Most energy efficiency and water projects qualify.
How PACE financing can help
So, what are the benefits of C-PACE financing for pre-existing buildings?
8. Attractive terms. It provides long-term financing with fixed rates of up to 20-year terms.
9. Attractive cost. The cost of capital is low.
10. All-in financing. This is 100% financing. No capital outlay is required from the property owner (hard or soft costs).
11. NOI positive projects. With no capital outlay and long-term financing term, projects generally cash flow and generate net operating income beginning on day one.
12. Non-recourse financing. The financing is non-recourse, with no corporate or personal guarantees required.
13. Non-accelerating financing. The financing is non-accelerating, even in the event of the sale of the property.
14. It’s not debt. It does not consume credit capacity because it’s not considered debt.
15. Flexible structure. It can be structured to pass through costs with tenants for NNN leases.
16. Fast underwriting. Fast-tracked underwriting can lead to a quick close.
Contact the COSE/GCP Energy Team today
17. Contact us today. And what’s the 17th takeaway on all this? It’s to contact the COSE/GCP Energy Team at email@example.com and let the Team evaluate your project, prescreen your business for C-PACE and connect you with the capital and resources you need to start saving on your energy expenses.