Are you a business owner looking to reduce expenses to increase your profits? Have you considered looking into energy-efficiency upgrades for your property?
Energy costs are one of the most significant expenses for any business owner or commercial property owner in Ohio. Replacing outdated doors, windows, roofing, HVAC and lighting can significantly reduce energy expenses while increasing the value of your property.
Identify Upgrades that Provide the most Impact
The first step to improving your property and decreasing expenses is to have a professional energy audit completed on the property to identify which improvements are needed and the impact those improvements can have on your bottom line.
When choosing a professional to audit your property, look for one of these professional certifications: CEM (Certified Energy Manager) or ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers).
There are several types of energy audits available. An ASHRAE Level 1 audit focuses on no cost or low-cost improvements. This commercial energy assessment will provide information on what type of improvements could be made and an estimate of the associated savings for each.
While the Level 1 assessment provides the scope of possible improvements, an ASHRAE Level 2 energy audit provides thoroughly detailed information for the property owner. Using appropriate engineering models, the professional’s report projects how much energy can be saved with each specific improvement and the break-even point based on the savings. The models are based on many factors, including typical building use (manufacturing, warehouse, office, retail, etc.), hours occupied, and climate conditions.
Use Energy Savings to Finance Upgrades
Are you ready to make property improvements but don’t have the up-front cash to fund the project? One option for funding a project such as this would be to take out a loan through the bank, increasing the amount of debt held by the company. But there may be a better solution through a program called Property Assessed Clean Energy (PACE).
Ohio is one of 33 states using PACE to encourage and promote commercial property owners to make energy efficiency or renewable energy investments, using the energy savings to repay the loan and preserving the business or organization’s capital for operations and growth.
The property owner borrows funds at a competitive fixed rate to make eligible improvements and agrees to place a special assessment on the improved property to repay the lender over the agreed-upon term. In Ohio, the maximum term for PACE is 30 years. The assessment period is based, in part, on the useful life of the asset(s) being financed.
Many types of projects are eligible. Lighting is the most common efficiency project. But other projects such as HVAC, windows, doors, roofing and insulation are common as well. Renewable energy projects that include roof-top and ground-mounted solar arrays are also eligible, as is geothermal. These are the most common types of projects, but not an all-inclusive list of what’s eligible.
Even new construction is eligible! If the building’s systems, such as HVAC, are built “better than code” and can demonstrate a savings against this baseline, PACE is an option for that portion of the building costs.
PACE financing, while primarily used to finance the construction, can include all eligible costs. Engineering, audits and permits all fall in this category.
All commercial properties are eligible for PACE in Ohio. This includes for-profit AND non-profit properties, apartment buildings (more than 4 units), and even government-owned facilities.
PACE should be a consideration for eligible projects where the savings generated are sufficient to cover the assessment amount. It’s a unique financing mechanism that provides up-front capital and uses the captured savings to pay for the improvements. Depending on the scope of the project, it can be stand-alone financing or part of an overall capital stack to meet the full project financing needs.
There are several active PACE financing programs already available in Ohio. One of these programs is offered by the Northeast Ohio Public Energy Council (NOPEC) and is available to eligible businesses and commercial properties within any of the 219 NOPEC member communities in Ohio.