Posts Tagged ‘PACE’

Urban Cowboys, Going Deeper with EEI

September 22nd, 2011 by Jim Crowder

UrbanLand Magazine recently turned out a thoughtful analysis, Energy Efficiency Markets Evolve Globally, of The 2011 Energy Efficiency Indicator (EEI) , the fifth time a global survey of real estate decision makers has been conducted by Johnson Controls. For the first time, ULI got into the research fracas with Johnson Controls, to analyze and release the results. The Building Advisor touched on the EEI a couple weeks back in Summer HVAC Wrap + BetterBricks Video, but nobody does serious data like ULI.

If you’re not familiar, the EEI is the last word, the “state of the union,” if you will, gauging the hearts and minds of of global executives and building owners responsible for energy management and investment decisions in commercial and public sector buildings. This year, the EEI surveyed 4,000 respondents in 13 countries on six continents and was conducted in eight languages. That’s a lot of bubbles to fill in completely with a #2 pencil!

‘Extremely’ or ‘Very’: Energy Efficiency Makes the Big Time

What you probably already know: as many as seven in ten executives globally say energy management is extremely important or very important to their organizations. Execs have pursued an average of nine different energy efficiency measures in the past year.

And what’s motivating them? Simply put, the rising cost of energy. We all know energy costs will keep on rising. It’s sort of like gravity – you can pretty much count on it. Up significantly in importance from 2010, however, is government incentives. With over half the states offering some kind of financial incentive for efficiency measures, execs are now listening. It’s sort of like getting cash back at the grocery store on a big ticket item: why not? Third biggest motivator was to enhance the branding of a building.

In fact, interest in certified green buildings doubled from 2010 and for the first time, certification efforts are more prevalent for existing buildings than new ones. Lower on the motivational list: reduction of greenhouse gas emissions, domestic energy security, and other government policies.

Now, the challenges: while the graphic to the left shows that 67% of executives surveyed report that they have allocated capital from their operating budget to energy efficiency in the last year, (yay!) significant market barriers to pursuing further investment (boo).

These barriers come in all colors and flavors, depending on market sector. From the report:

The five key barriers to energy efficiency investments reported in the survey are:

  • lack of awareness of opportunities for energy savings;
  • lack of technical expertise to design and complete projects;
  • lack of certainty that promised savings will be achieved;
  • inability of projects to meet the organization’s financial payback criteria; and
  • lack of available capital for investment in projects.

For the contractor serving small to midsize buildings, it is interesting to note that respondents with control over more square footage in larger facilities report having implemented more energy projects than those with smaller facilities. But trickledown is sure to follow.

Four is the Magic Number 

According to the EEI Survey, real estate organizations sharing the following four key strategic practices are most likely to get on the energy efficiency bandwagon, and implemented four times as many energy efficiency improvement measures as those that did not:

  • goals established for reduced energy use or carbon emissions;
  • energy use data measured and analyzed at least monthly;
  • added resources dedicated to improving energy efficiency through the hiring or retraining of staff, or the hiring of external service providers; and
  • external financing sources used for projects.

The Building Advisor can’t help making a couple of points here. For energy use data measured and analyzed at lease monthly, our Verify product for ongoing, continuous monitoring is the solutions. I mean, have you read what it did for J.E. Shekell in Smart Solutions (J.E. Shekell Uses Building Advice to Slash Energy Bills in Half ) or the NEWS (Facility Energy Audit Leads to Huge Savings)?

And in the second place, BuildingAdvice is like adding a team of expert management, sales, and engineering personnel acting as an extension of an HVAC Contractor’s current team to drive the development and ongoing execution of an energy services business. ‘Nuff said.

And Speaking of Incentives Changing the World

Sacramento development image by Michael Nagle/Bloomberg News

The Gray Lady’s Energy & Environment section reported  on a $650 million private sector investment in energy efficiency for existing buildings in this week’s article, Tax Plan to Turn Old Buildings ‘Green’ Finds Favor.

It’s getting around that a retrofit can typically cut a building’s energy use so much that the project pays for itself in as little as five years. A new tax arrangement in Miami and Sacramento allows property owners to upgrade their buildings at no upfront cost, typically cutting their energy use and their utility bills by a third.

Lockheed Martin, Barclays Bank and some other big boys, headed up by Ygrene Energy Fund of Santa Rosa, Calif., have formed a consortium that will invest $650 million in such upgrades over the next few years.

The article called waste in older buildings “one of the nation’s biggest energy problems” and cited energy as a sector that could eventually be worth billions.

The meat of the plan is pretty genius: the constortium is kind of like a strip mall serving all of your energy efficiency needs in one stop. Ygrene and its partners gain exclusive rights for five years to offer this type of energy upgrade to businesses in a particular community. Lockheed Martin does the engineering work. Short-term loans come from Barclays Capital to pay for the upgrades. Then, “Contractors will offer a warranty that the utility savings they have promised will actually materialize,” the article states. Insurance underwriter, Energi, of Peabody, Mass., backs up that warranty. It goes on from there.

Best of all, owners pay no upfront cost for energy efficient upgrades. Instead, a surcharge is attached to subsequent property tax bills for five to 20 years. However, as the surcharges are less than the savings, the upgrades pay for themselves. Really. The new approach could garner substantial private capital for many midsize and smaller businesses to get on the energy efficiency bus.

In the past three years, half the states have passed legislation permitting energy retrofits financed by property-tax surcharges, and hundreds of cities and counties are considering such programs. The new financing approach is called Property Assessed Clean Energy, or PACE financing. PACE saw some serious backlash last year when an arm of the federal government that oversees the mortgage market took a hostile stance toward such projects on residential property, on the grounds that they add risk to mortgages. But, the article notes, “So far, it appears that PACE programs for commercial properties pose fewer legal complications.”

Richard Branson by Michael Nagle/Bloomberg News

The consortium was put together by the Carbon War Room, a nonprofit environmental group based in Washington set up by Richard Branson, the British entrepreneur and billionaire, to tackle the world’s climate and energy problems in cost-saving ways.

Git Along, Little Doggie

“Perhaps the most serious risk,” the article notes, “is that fly-by-night contractors will be drawn to the new pot of money, pushing energy retrofits that are too costly or work poorly.

‘Contractors are cowboys,’ said Dennis Hunter, chairman of Ygrene. He promised close scrutiny of the ones selected for the Miami and Sacramento programs.”

What say ye to that, boys?

Ride ‘em, cowboy!

Cowboy image courtesy themurkyfringe.com.

Energy Efficiency Chatter: We Couldn’t Have Said It Better

September 3rd, 2010 by Jim Crowder

Is it us, or does it feel like it’s all about us lately?

Building Retrofits Need an Extreme Makeover -Reuters – “the industry as a whole needs a robust set of data on post-retrofit performance and payback before they will be convinced that the opportunity to reduce operating costs is real, the risks are low, and the ROI is high enough to justify investments in efficiency.”

Image by Ben Heine

How the Fate of PACE Could Influence the Clean Energy EconomyGreenBiz.com – PACE financing is a potentially revolutionary way to retrofit commercial, residential, and industrial properties with energy efficiency and renewable energy technologies. The program overcomes one of the largest hurdles to investment in clean energy — the upfront cost.”

Creating 625,000 jobs and saving $64 billion through energy efficiencyGrist – “Efficiency Works” [PDF], a major new report by Bracken Hendricks, Bill Campbell, and Pen Goodale, finds that a straightforward set of policies aimed at upgrading just 40 percent of the residential and commercial building stock in the United States would:

  • Create 625,000 sustained full-time jobs over a decade.
  • Spark $500 billion in new investments to upgrade 50 million homes and office buildings.
  • Generate as much as $64 billion a year in cost savings for U.S. ratepayers, freeing consumers to spend their money in more productive ways.

Universal Benchmarking Is Essential in the Fight Against Global WarmingHuffington Post – “We need the benchmark numbers to motivate change. Without them, how will we measure progress? How will we create the most effective policies and incentives?”

Image: Ben Heine’s photostream on Flickr

Tuesday Roundup

July 6th, 2010 by Jim Crowder

While you’re catching up on your email from the holiday weekend, here’s a grab-bag of pertinent and interesting articles from the past few days:

The Case for PACE: Clean-Energy Financing for Commercial Buildings Holds PromiseCostar Group

Greenprint Foundation Announces Leitner as Chief Executive OfficerBuilding Energy Performance News

Government Gives Out $76 Million for Green BuildingsEarthTechling

Lab at St. Elizabeths is local team’s entry in green-building research center competitionThe Washington Post

Joulex strives to keep network power management simpleGreenTech Pastures on ZDnet

You might remember GreenPastures writer Heather Clancy from our little poll on attractive greentech writers. More importantly, she’s joined Melissa Hincha-Ownby in covering this energy management company of late. The IT-focused energy management company is getting quite a bit of attention of late. To reference “When Harry Met Sally,” (you know the scene? After Meg Ryan’s “performance” in Katz’ Delicatessen, when the lady talks to her waiter…?)

We’ll have what Joulex is having.

"I’ll have what she's having."

Joulex, “agentless” power management for enterprise systems (“if it’s on the network the Joulex Energy Manager software can turn it off. That includes everything — IP phones, servers, routers, hubs and such,” says Clancy’s post). CEO Tom Noonan says these policies can help save between 40 percent and 60 percent of the IP device power consumption in an organization, with an estimated ROI in six months.

And lastly, how could The Building Advisor skip this gem:

beekeeper in dusseldorf tests air quality

Beekeeper in Dusseldorf Biomonitoring

Honeybees Deployed to Test Air Quality at German Airports – New York Times

The idea being to sell the honey made from airport-based bees, to prove to the general public that the air cannot be polluted if the honey tastes that good.

When in Dusseldorf…bring The Building Advisor back some Dusseldorf Natural.

Images courtesy The New York Times, djueat, and From the Front

Un-Oilspill

June 17th, 2010 by Jim Crowder

It’s tough to find non-oilspill related news these days, what with the Presidential address Tuesday and all. So The Business Advisor is going to take this time to focus on what’s truly important for energy efficiency in commercial buildings, but we need your help:

Which Green Biz/Tech Blogger Celeb do you find most attractive?

Your choices will be pictured throughout this post. Please consider as you browse through the grab bag of energy efficiency news for commercial buildings:

Martin LaMonica, "Green Tech" for CNET: rugged.

Heather Clancy for ZDNet

Heather Clancy, "Green Pastures" for ZDNet: pretty cute.

  • Speaking of the devil, this week the Energy Efficiency Forum held its 21st Annual Forum at the National Press Club in Washington, DC (co-sponsored by Johnson Controls and the U.S. Energy Association). The site is chock full of live webcasts and blog posts.
  • The New York Times cited $140 billion as the amount of annual savings the U.S. could save by making buildings more energy efficient, according to a resolution from the U.S. Conference of Mayors, who met this week to back a mandatory green construction code.
  • The National Association of State Energy Officials (NASEO) has tons of great energy efficiency news and resources here, including a nifty counter of Energy Savings So Far this Year. Is The Building Advisor late to the game on this one? It’s ok, you can tell me.
Melissa Hincha-Ownby, GreenBiz for mother nature network

Melissa Hincha-Ownby, GreenBiz for mother nature network: definitely at a disadvantage here, being a cartoon.

  • And for you HVAC fans out there, did you see this? “Built around LG’s inverter compressors, the Multi-V series delivers one of the highest EER ratings available in the VRF equipment category, along with low sound operation. Using VRF technology, the Multi-V system provides commercial businesses greater temperature control therefore avoiding unnecessary energy usage in unoccupied rooms.” Ooh, technical….

Lastly…

Joel Makower: Original Gangsta

Joel Makower: Original Gangsta

So?

Property Taxes As Financing Vehicle for Green Upgrades

February 10th, 2010 by Jim Crowder

San Francisco’s mayor, Gavin Newsom, signed legislation on Monday that will enable property taxes to serve as a vehicle for financing energy efficiency upgrades of buildings and homes.

The Property Assessed Clean Energy (PACE) program, which will make $150 million in bonds available, is apparently not the first of its kind, but it will be the nation’s largest.  Launched in November of 2008 in Berkeley, CA, there are currently 17 states that have authorized PACE programs.

The idea is that since up-front costs often represent the most significant barrier to the implementation of more energy efficiency solutions, by spreading the cost out over time, such cost-saving and more sustainable solutions will become more widespread.  Essentially the city or district makes a loan for the project and then is paid back on the loan through the property tax bill.  Another feature of PACE programs is that the loans are attached the the property and not the owner.

It’s another example of the type of innovative financing programs that are springing up all across the country to help spur more improvements in energy efficiency and hopefully will lead to an increase in green jobs.