new multifamily energy efficiency retrofit financing and savings · 2014. 1. 3. · multifamily...
TRANSCRIPT
Multifamily Energy Efficiency Retrofit Financing and Savings
Stockton Williams, Principal HR&A Advisors
Stockton Williams, HR&A Advisors Overcoming Barriers in the Multifamily Sector |
HR&A is an industry-leading real estate, economic development and energy efficiency consulting firm. Strategic advisory services for complex mixed-use, neighborhood, downtown, campus, and regional development projects across North America and abroad for 30+ years.
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HR&A’s 3 Primary Practice Areas
HR&A
Real Estate Advisory
Economic Development
Catalyzing Energy
Efficiency
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The HR&A Energy Practice
Clients • City government • State agencies • Utilities • Private building
owners • Non-profits
What? • Program Design &
Administration • Capital Planning • Public Policy • Market Analysis • Strategic Advisory
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The HR&A Energy Practice
Clients • City government • State agencies • Utilities • Private building
owners • Non-profits
Services • Program Design &
Administration • Capital Planning • Public Policy • Market Analysis • Strategic Advisory
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HR&A’s Energy Experience
New York City Energy Efficiency Corporation
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Deutsche Bank/Living Cities Initiative 2011
challenges A paucity of data concerning the efficacy of energy retrofits
Lack of interaction between the worlds of building science & finance
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Deutsche Bank/Living Cities Initiative 2011
challenges A paucity of data concerning the efficacy of energy retrofits
Lack of interaction between the worlds of building science & finance
1. Change underwriters’ practices to incorporate energy efficiency
2. Advance & improve the effectiveness of public policy & programs
response Build a set of reliable data to:
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Deutsche Bank/Living Cities Initiative: Central Findings
1. Building retrofits save energy.
Portfolio-wide savings
Saved 19%
electric: Saved 10%
fuel:
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Deutsche Bank/Living Cities Initiative: Central Findings
1. Building retrofits save energy.
2. Fuel measures save more than electric measures
average savings per unit
Saved $240
electric: Saved $70
fuel:
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Deutsche Bank/Living Cities Initiative: Central Findings
1. Building retrofits save energy.
2. Fuel measures save more than electric measures
3. Actual savings are strongly correlated with pre-retrofit fuel usage
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-20
0
20
40
60
80
100
0 20 40 60 80 100 120 140 160 180 200
Total kBTU/SF Pre-retrofit
1 PS Oil
1 PS Gas
Pre-war 2 PS
Pre-war HW
Post-war 2 PS
Post-war HW
Post-war DS
actu
al f
uel s
avin
gs
(kBT
U/s
quar
e fo
ot)
pre-retrofit fuel use intensity (kBTU/square foot)
Savings = 0.51*(Pre-retrofit EUI) – 30.66
Higher pre-retrofit EUI indicates greater savings potential
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Deutsche Bank/Living Cities Initiative: Central Findings
1. Building retrofits save energy.
2. Fuel measures save more than electric measures
3. Actual savings are strongly correlated with pre-retrofit fuel usage
4. Strategically capping projections can vastly improve a portfolio’s realization rate
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-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 100 200 300 400
1 PS Oil
1 PS Gas
Pre-war 2 PS
Pre-war HW
Post-war 2 PS
Post-war HW
Post-war DS
67% of projects
Auditors usually project 25% – 50% savings… pr
ojec
ted
fue
l sav
ings
units per project
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-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0 100 200 300 400
1 PS Oil
1 PS Gas
Pre-war 2 PS
Pre-war HW
Post-war 2 PS
Post-war HW
Post-war DS
69% of projects
but most fuel measures save 10% – 40%. ac
tual
fue
l sav
ings
units per project
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Strategically capping fuel savings projections can improve the portfolio-wide realization rate.
-$200
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400
projected fuel savings per unit
1 PS Oil
1 PS Gas
Pre-war 2 PS
Pre-war HW
Post-war 2 PS
Post-war HW
Post-war DS
Realization Rate = 100% Portfolio-wide: 61% ± 14%
actu
al f
uel s
avin
gs p
er u
nit
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-$200
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$- $200 $400 $600 $800 $1,000 $1,200 $1,400
1 PS Oil 1 PS Gas Pre-war 2 PS Pre-war HW Post-war 2 PS Post-war HW Post-war DS
Capping fuel savings projections improves the portfolio-wide realization rate from 61% to 117%.
Realization Rate = 100% Portfolio-wide: 117% ± 21%
actu
al f
uel s
avin
gs p
er u
nit
projected fuel savings per unit
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Loan performance
30-year amortization Audit projection,
unadjusted “Capping”
methodology
Debt supported by actual savings
$ 19,116,000 $ 19,116,000
Debt estimated per projection
$ 31,339,000 $ 15,713,000
Difference $ (12,223,000) $ 3,403,000
Realization rate 61% 117%
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Loans where cash needed to service > savings
Audit projection, unadjusted
“Capping” methodology
Loans where cash needed to service > savings
71% 35%
Annual repayment shortfall (portfolio)
$ (1,103,000) $ (205,000)
Median annual shortfall (per unit)
$ (153) $ (110)
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Retrofit cost
loan supports full fuel retrofit costs in
50% of projects
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Other Leading Efforts
FHA-Fannie Mae Green Refi Plus: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-106 HUD Multifamily Energy Innovation Fund: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2012/HUDNo.12-051 Bank of America EE CDFI Program: http://ahead.bankofamerica.com/fueling-the-economy/bank-of-america-announces-recipients-of-55-million-energy-efficiency-finance-program/