1. 1. Keeping PACE with Energy Efficiency in North America
2. 2. Did you know?
3. 3. Did you know? The U.S. Ranks 13th in Energy Efficiency Among the 16 Largest Economies
4. 4. Limited Capital
5. 5. Long Payback Periods
6. 6. Risk Savings
7. 7. The Answer?
8. 8. PACE Property Assessed Clean Energy Financing
9. 9. What is PACE? Innovative financing program for energy efficiency improvement projects Financing that covers 100% of energy efficiency improvement costs through a voluntary special property tax assessment Based on one of the oldest property improvement financing models in the U.S.
10. 10. What is PACE? Legislation adopted by state PACE Districts created by local governments Provides long-term fixed rate funding, allowing the savings to be greater than its cost. Savings includes material and labor for R&M and replacement Repaid through property tax payments
11. 11. Where is PACE? Originated in California in 2009 Adopted in 31 U.S. States and the District of Columbia; Only 14 are active Has expanded into other countries
12. 12. Where is PACE? Information on PACE programs in the U.S. is available through the PACENow and DSIREUSA organizations
13. 13. Why PACE? It Eliminates Traditional Barriers Non recourse & can be treated as off balance sheet financing No up front capital required Long term financing up to 20 yrs In some states Must be cash flow positive over the term of the financing Projects >$250K = Performance Guaranteed in some states
14. 14. Can be utilized multiple times on the same property ROI includes material and labor costs for maintenance and end-of-life replacement Covers assets considered real property including electric vehicles Asset must remain with the property if sold Can be utilized multiple times on the same property ROI includes material and labor costs for maintenance and end of life replacement Why PACE?
15. 15. Who Funds PACE? PACE statutes allows PACE projects to be financed through a variety of sources including: Private Equity Bonds Self Funding Traditional Funding Others?
16. 16. Who Qualifies for PACE? Businesses in PACE Districts More to come!
17. 17. For-profit and non-profit commercial & industrial businesses Government & Publically owned buildings (in some states) Business outlook is good Property is not leveraged ($250K but smaller can be funded Dont own it? Get permission! Who Qualifies for PACE?
18. 18. What Projects Qualify for PACE? Better Yet, What Projects Dont Qualify for PACE?
19. 19. Projects Can Include. New Construction Refinancing of Existing Projects Building Recommissioning Brownfield Sites Major Renovations Building Upgrades Process Improvements
20. 20. But Wait Theres More!!
21. 21. f Technology Incentives Tax Credits Financing
22. 22. Typical PACE Project Process
23. 23. Secure PACE District If Required
24. 24. Conduct Pre-Project Assessment
25. 25. Develop Life Cycle Cost Analysis
26. 26. Secure PACE Financing
27. 27. Execute Performance Contract
28. 28. Close on PACE Financing
29. 29. Conduct Annual Auditing & Reporting
30. 30. The Success of PACE
31. 31. Michigan PACE Project 1969 Facility All Original Equipment Replacing All Interior & Exterior Lighting Replacing All Forced Air Heaters Replacing Compressed Air System Installing Hi-Speed Service Entry Doors Improving Building Envelope Auto Dealership Case Study
32. 32. $500K Total Project Cost Secured PACE Financing 20 Year Term at ~ 6.25 % Interest No Upfront or Out-of-Pocket Costs Auto Dealership Case Study
33. 33. CONFIDENTIAL - ALL COSTS SHOWN IN 2014 DOLLARS - 2% YEAR OVER YEAR ENERGY PRICE INCREASE Star Lincoln - Total Project Life Cycle Cost Summary - Financing Terms 20 Years @ 7.5% Yrs 1-5 Yrs 1-10 Yrs 1-20 Current Facility Energy Cost Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Sub-Total Sub-Total Total Annual Cost (Includes Annual Maintenance) $94,947 $96,845 $98,783 $100,759 $102,774 $494,108 $1,039,645 $2,306,968 Proposed Lighting, Compressed Air, Heating, High Speed Door Energy Cost Annual Cost (Includes Utility Refund, Annual Maintenance) $39,186 $57,872 $57,436 $60,614 $51,698 $266,806 $361,168 $1,181,888 Annual Savings - Proposed vs. Current $55,761 $38,973 $41,347 $40,145 $51,076 $227,302 $678,477 $1,125,080 Finance - Payment/Month = $3905 For 240 Months @ 7.5% $46,860 $46,860 $46,860 $46,860 $46,860 $234,300 $468,600.00 $937,200 Cummulative Annual Savings (ROI Calculation) $55,761 $94,734 $136,081 $176,226 $227,302 $227,302 $678,477 $1,125,080 Cummulative Payments With Financing (ROI Calculation) $46,860 $93,720 $140,580 $187,440 $234,300 $234,300 $468,600 $937,200 Return on Investment 18.99% 1.08% -3.20% -5.98% -2.99% -2.99% 44.79% 20.05% Cost With Financing (As a Percent of Savings) 84% 99% 103% 106% 103% 103% 69% 83% FINANCIAL SUMMARY $56,000 Average Annual Savings 19% First Year ROI ddd as Auto Dealership Case Study
34. 34. CONFIDENTIAL - ALL COSTS SHOWN IN 2014 DOLLARS - 2% YEAR OVER YEAR ENERGY PRICE INCREASE Star Lincoln - Total Project Life Cycle Cost Summary - Financing Terms 20 Years @ 7.5% Yrs 1-5 Yrs 1-10 Yrs 1-20 Current Facility Energy Cost Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Sub-Total Sub-Total Total Annual Cost (Includes Annual Maintenance) $94,947 $96,845 $98,783 $100,759 $102,774 $494,108 $1,039,645 $2,306,968 Proposed Lighting, Compressed Air, Heating, High Speed Door Energy Cost Annual Cost (Includes Utility Refund, Annual Maintenance) $39,186 $57,872 $57,436 $60,614 $51,698 $266,806 $361,168 $1,181,888 Annual Savings - Proposed vs. Current $55,761 $38,973 $41,347 $40,145 $51,076 $227,302 $678,477 $1,125,080 Finance - Payment/Month = $3905 For 240 Months @ 7.5% $46,860 $46,860 $46,860 $46,860 $46,860 $234,300 $468,600.00 $937,200 Cummulative Annual Savings (ROI Calculation) $55,761 $94,734 $136,081 $176,226 $227,302 $227,302 $678,477 $1,125,080 Cummulative Payments With Financing (ROI Calculation) $46,860 $93,720 $140,580 $187,440 $234,300 $234,300 $468,600 $937,200 Return on Investment 18.99% 1.08% -3.20% -5.98% -2.99% -2.99% 44.79% 20.05% Cost With Financing (As a Percent of Savings) 84% 99% 103% 106% 103% 103% 69% 83% FINANCIAL SUMMARY $56,000 Annual Savings 19% First Year ROI $1,125,080 Lifetime Savings ddd as Auto Dealership Case Study
35. 35. CONFIDENTIAL - ALL COSTS SHOWN IN 2014 DOLLARS - 2% YEAR OVER YEAR ENERGY PRICE INCREASE Star Lincoln - Total Project Life Cycle Cost Summary - Financing Terms 20 Years @ 7.5% Yrs 1-5 Yrs 1-10 Yrs 1-20 Current Facility Energy Cost Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Sub-Total Sub-Total Total Annual Cost (Includes Annual Maintenance) $94,947 $96,845 $98,783 $100,759 $102,774 $494,108 $1,039,645 $2,306,968 Proposed Lighting, Compressed Air, Heating, High Speed Door Energy Cost Annual Cost (Includes Utility Refund, Annual Maintenance) $39,186 $57,872 $57,436 $60,614 $51,698 $266,806 $361,168 $1,181,888 Annual Savings - Proposed vs. Current $55,761 $38,973 $41,347 $40,145 $51,076 $227,302 $678,477 $1,125,080 Finance - Payment/Month = $3905 For 240 Months @ 7.5% $46,860 $46,860 $46,860 $46,860 $46,860 $234,300 $468,600.00 $937,200 Cummulative Annual Savings (ROI Calculation) $55,761 $94,734 $136,081 $176,226 $227,302 $227,302 $678,477 $1,125,080 Cummulative Payments With Financing (ROI Calculation) $46,860 $93,720 $140,580 $187,440 $234,300 $234,300 $468,600 $937,200 Return on Investment 18.99% 1.08% -3.20% -5.98% -2.99% -2.99% 44.79% 20.05% Cost With Financing (As a Percent of Savings) 84% 99% 103% 106% 103% 103% 69% 83% FINANCIAL SUMMARY $56,000 Annual Savings 19% First Year ROI $1,125,080 Lifetime Savings 20% Lifetime ROI ddd as Auto Dealership Case Study
36. 36. CONFIDENTIAL - ALL COSTS SHOWN IN 2014 DOLLARS - 2% YEAR OVER YEAR ENERGY PRICE INCREASE Star Lincoln - Total Project Life Cycle Cost Summary - Financing Terms 20 Years @ 7.5% Yrs 1-5 Yrs 1-10 Yrs 1-20 Current Facility Energy Cost Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Sub-Total Sub-Total Total Annual Cost (Includes Annual Maintenance) $94,947 $96,845 $98,783 $100,759 $102,774 $494,108 $1,039,645 $2,306,968 Proposed Lighting, Compressed Air, Heating, High Speed Door Energy Cost Annual Cost (Includes Utility Refund, Annual Maintenance) $39,186 $57,872 $57,436 $60,614 $51,698 $266,806 $361,168 $1,181,888 Annual Savings - Proposed vs. Current $55,761 $38,973 $41,347 $40,145 $51,076 $227,302 $678,477 $1,125,080 Finance - Payment/Month = $3905 For 240 Months @ 7.5% $46,860 $46,860 $46,860 $46,860 $46,860 $234,300 $468,600.00 $937,200 Cummulative Annual Savings (ROI Calculation) $55,761 $94,734 $136,081 $176,226 $227,302 $227,302 $678,477 $1,125,080 Cummulative Payments With Financing (ROI Calculation) $46,860 $93,720 $140,580 $187,440 $234,300 $234,300 $468,600 $937,200 Return on Investment 18.99% 1.08% -3.20% -5.98% -2.99% -2.99% 44.79% 20.05% Cost With Financing (As a Percent of Savings) 84% 99% 103% 106% 103% 103% 69% 83% FINANCIAL SUMMARY $56,000 Annual Savings 19% First Year ROI $1,125,080 Lifetime Savings 20% Lifetime ROI +$20K Utility Incentives & Others. ddd as Auto Dealership Case Study
37. 37. Keeping PACE with Energy Efficiency in North America Thank You! www.EnergyAllianceGroup.org Info@EnergyAllianceGroup.org 1-844-324-6424
38. 38. Exploring The Path To PACE For Your Energy Efficiency Projects