No Bucks, No Buck Rogers: Financing Options for Energy Efficiency and Renewable Energy Projects

Dan Doyle, Grumman/Butkus Associates
Abby Johnson, Abacus Property Solutions

In order to prevent catastrophic global warming, the International Energy Agency (IEA) estimates that at least $53 trillion must be invested over the next 20 years in renewable energy and energy efficiency projects. This daunting funding shortfall can be overcome, but for this to happen, where will the money come from? Obtaining financing is one of the biggest hurdles to moving energy efficiency initiatives forward. Understanding what options are available can be critical to being successful.

Projects to enhance energy efficiency, including renewable energy projects, are crucial to a more sustainable future for lab facilities. However, without funding for design and implementation, good ideas go nowhere.

This presentation will help participants understand financing considerations, including:

  • Total cost vs. available internal capital
  • Preferred use of equity
  • Balance sheet impact of potential debt
  • Returns required
  • Preferred ownership status
  • Tax strategies
  • Responsibility for savings
  • Preferred payment structure

Financing options available for efficiency projects will be reviewed, including:

  • Do-It-Yourself
  • ESCO (Energy Services Company)
  • ESA (Energy Services Agreement)
  • UESC (Utility Energy Service Contract)
  • PACE (Property Assessed Clean Energy)
  • PPA (Power Purchase Agreement)
  • Leases
  • MEET (Metered Energy Efficiency Transaction Structure)
  • GRF (Green Revolving Fund)

By use of these financing options, lab projects can be structured in a way that reduces the owner's up-front capital investment and/or risk, while cutting long-term operating costs.

Learning Objectives

  • Understand financing considerations (cost vs available capital, preferred use of equity, balance sheet impact of potential debt, returns required, preferred ownership status, tax strategies, responsibility for savings, preferred payment structure)
  • Understand typical financing options for energy efficiency projects (DIY, ESCO, ESC, UESC) and newer options (PACE, PPAs, Leases, MEETS, Green Revolving Fund)
  • Understand the particular benefits of PACE (Property Assessed Clean Energy) for funding lab projects
  • Understand the particular benefits of Green Revolving Funds for funding lab projects

Biographies:

Dan Doyle, P.E., LEED AP O+M, is the Chairman of Grumman/Butkus Associates, a firm of energy efficiency consultants and sustainable design engineers based in metro Chicago. He is responsible for G/BA's marketing and recruiting, and is principal-in-charge for numerous designs and studies. For the past 35 years, his career has focused on energy conservation and efficiency improvements in new and existing buildings, especially energy-intensive facilities such as labs. He is an I2SL board member.

Abby Johnson is President of Abacus, a real estate advisory firm representing owners in the development and financing of commercial energy efficiency projects. She brings 15 years of commercial real estate financing and technical assessment experience to the energy efficiency space. Abacus was founded as an unbiased resource for building owners for implementing energy-saving projects that increase net cash flow and cash-on-cash returns. A recent focus has been implementation of PACE financing.

 

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