6/30/2014 12:33 PM
Finding a way to pay for energy efficiency improvements to your building or campus can be tricky – even when the improvements will result in significant energy savings. But if you have the will, you can find a way. Here are some suggested strategies.
Before you think about how you will pay for energy efficiency improvements to your building or campus, think about how you can NOT pay for them. In other words, consider ways to cut the cost.
Does your utility or your local/state/federal government offer any incentives or rebates for which your project might qualify? One place to start looking for these opportunities is the DSIRE website. But don’t count on it exclusively. Call your utility, and call local government agencies too. Building a relationship with them can help with your immediate projects and projects in the future.
Is there a tax deduction you can take as a result of your energy efficiency project? Though tax deductions happen after the fact, if you know a deduction is available, it might be easier to get approval for the project if you clearly state the amount of the deduction in the project proposal. Call your tax accountant.
Can you take advantage of a discount offer? Often vendors run promotions, such as the 10% discount we currently have running for Events2HVAC higher education customers this summer. Ask your sales representative if they ever offer discounts and how often. If you know you want to implement the project, maybe you can get the required approval(s) and then hold off until the next discount is offered.
Read this article from FacilitiesNet to learn more about utility incentives and rebates – and mistakes to avoid when applying for them.
Once you have reduced the cost as much as possible, consider alternate methods of implementing your project.
Can you implement a portion of the project and use the savings from that to fund the second and third phases of the project? This is an option several Events2HVAC customers are choosing, but it will not work with all energy efficiency projects. Some projects must be fully implemented to begin saving money. But with Events2HVAC, you can implement it in one or two buildings, start saving energy, and then use that savings over the next couple of years to add additional buildings to your license. Think about this option with other projects such as lighting too – it might be a good way to make the best of a small budget.
Does the vendor offer volume discounts for customers who implement projects in multiple buildings at once? If you have a large campus, you might be able to get a volume discount that provides an incentive to making energy efficiency improvements to your whole campus at once rather than one building at a time. You might need do some calculations to determine if it is cheaper to purchase for the whole campus at once and begin reaping savings all at once. If you can get your hands on the up-front capital, this might be the better choice.
Once you have determined your implementation strategy, consider alternate ways to finance your project.
Does the vendor offer a payment plan? Some vendors will help finance your energy efficiency project by allowing you to pay for it over a period of time. For example, you can purchase Events2HVAC and pay for it in three annual payments. This allows you to implement the entire project at once, and start reaping savings you can use to pay off the remainder of the cost.
Does your utility/local/state government offer on-bill financing or PACE financing? Some utilities will pay for energy efficiency improvements, and then add a portion of the cost to your utility bill over a period of time. You will end up paying a bit extra by the time the “loan” is paid off, but the money will come out of your operating budget rather than showing up on your balance sheet, which is sometimes desirable.
Some local and state governments are beginning to offer PACE financing, which you pay back over a period of time with your property taxes. Check your for PACE opportunities in your state on the PACENow website to find out if PACE is offered in your area, or call your local or state government.
Can you get a grant or establish a green revolving fund? Public institutions, churches, and non-profit organizations may be able to find a generous individual or company that would like to fund all or a portion of the project as a philanthropy effort. Applying for grants are also a good option. One good way to perpetually use either of these types of funds is to set up a green revolving fund. You use the initial funds to implement your energy efficiency project, then as savings come in from that project, you replenish the fund. The fund is now ready to be used again for the next energy efficiency project.
These are just a few of the more innovative financing options. Traditional loans may also be available for energy efficiency projects. Some energy service companies have their own innovative ways of financing projects, such as paying for the project up-front and taking over your reduced energy bill, while you pay them historical energy costs each month until the cost of the project is paid.
Check out this infographic from Metrus Energy for some more ideas on choosing the best financing strategy for your energy efficiency projects.
The bottom line is, “Where there’s a will, there’s a way.” If you have an energy efficiency project in the pipeline that will result in savings, you can find a way to pay for it. Now, get out there and make it happen!
Founded in 1998, Streamside Solutions provides software products, solutions and services for the building automation industry.
Phone: (888) 320-4277
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