Scott Maslansky C-PACE Program Manager - PowerPoint Presentation

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Scott Maslansky

C-PACE Program Manager

The Jordan Institute

NH C-PACE

Energy Project Financing Program Overview

November 19,

2016

Who Are We?

Non-Profit organization

Reduce energy use in buildings

Public policy and program design

Founded in 1995

For-profit company, majority owned by The Jordan Institute

Scale-up number of energy-efficient buildings

Expand available EE services - projects in the field including energy-centric construction management

2013 Strategic Plan & Reorganization

2014+ Policy and Program Design

2016 C-PACE Program Launch

Why C-PACE?

Goal:

Expand the number and scope of energy efficiency and renewable energy projects in New Hampshire.

Objective:

Expand energy efficiency and renewable energy financing tools - especially to meet some of these

needs…

Extend repayment terms

Reduce risk for investors/lendersOvercome the split incentive

Assure project quality / energy savings

Is My Project Cost Effective?

Financial

Simple PaybackReturn on InvestmentInternal Rate of Return

Net Present ValueCash Flow Positive?

Comfort

Tenant/employee complaints

Improved productivity

Necessity

Equipment at end of lifeCode issues

How do I measure “effective”?

http://www.epmechtech.com

Simple payback

Total Cost

_________________________________ = Payback in years Annual SavingsDoes not account for savings beyond payback period.

Payback

Weatherization Project

Cost: $10,000

Annual Savings: $1,500Simple Payback: 6.7yrs.Return on Investment (ROI): 15%Life of Measure: 20 yearsDiscount Rate: 6%Net Present Value (NPV): $7,205

Financials Example

Does Comfort = Savings?

Employee Productivity

Comfort:

Too hot/cold

 less focus

Glare

&

light levels

 eye strain, headaches, mistakesHigh CO2 levels  fatigueCosts of Energy vs. Personnel:

$40,000 average salary and benefits per person.200 square feet per person.$200 per square foot in payroll vs. $2 per square foot in utilities.Payroll is 100 times as expensive as energy per square foot!Even a 1% increase in productivity can have significant $ impact!

Source: sellingenergy.com

C-PACE Definition

C-PACE

P

roperty

Assessed Clean E

nergy financing for Commercial buildings Allows building owners to tie financing for energy efficiency and renewable energy improvements

to a property through a Special Assessment lien.

C-PACE Definition

NH Statute: RSA 53-F

Rewritten for 3

rd

time in 2015;

Unanimous

support -- NH House and SenateEnabling legislation

Municipalities voluntarily adopt RSA 53-F to set up C-PACE Special Assessment Clean Energy Districts.

Jordan Institute and partners launched the NH C-PACE program in 2016

Why was C-PACE created?

To overcome the significant obstacles for

commercial building owners to complete

E

nergy Efficiency and Renewable Energy projects

– especially comprehensive projects

By using the municipal tax structure, building owners can overcome these obstacles and benefit from high-quality, comprehensive, and cash-positive energy projects

Why was C-PACE created?

Common Situations

Results

7

-

Commercial Building owners flip

buildings every 5

-

10 yrs.

Owners rarely get full

benefit of long

term cost savings

-

-

–

-

Commercial

loans = 5

7 yr. terms

Focus on “low

hanging fruit”

project

paybacks of 2

7 yrs.

Loans repaid

from capital budgets

Limited funds for comprehensive

projects

Projects deferred until emergency

Limited time/money to consider options

Who pays for utilities?

Tenant not invested in upgrades for

building they don’t own;

owner not

invested if tenant pays bills

C-PACE

Benefits:

Building Owner

Tied to the property

, not the property owner

Non-accelerating

payments upon saleNext

owner receives the same benefits and payment obligations – “Pay for the energy efficiency you use”

No down payment requiredCash Flow Positive, Savings to Investment Ratio >1Loan Term up to 30

yearsMay be treated as operating expense - instead of debtMay address “Split incentive” - owner can “share” loan repayment with tenants (ie triple net lease)

Encourages comprehensive projects, not just fast ROIFinancial & energy project vetting/oversight/verification -

improves trust

C-PACE Benefits:

Municipality

Improve building stock

Attract/retain

businesses

Fill rentable

space

Increase

value of commercial buildingsBudget-neutral economic development initiativeNo public or ratepayer funding

Ties into goals and initiatives in the Master PlanStimulates local jobs by expanding markets for EE/RE contractorsVast majority of efforts handled by

othersNominal payment to Municipality to cover costs as conduit for tax/repayment

C-PACE Building Types Can Include:

* Some Restrictions Apply

Office buildings

Hotels & convention centers

Apartment buildings (5+ Units)*

Manufacturing facilities

Heated warehouses

Agricultural buildings

Retail: grocery, malls, big box, Mom & PopHealth clubs & athletic facilities

Private SchoolsNon-profits NO PUBLICLY OWNED BUILDINGSNO RESIDENTIAL (1-4 units)

NO NEW CONSTRUCTION

C-PACE Projects Can Include:

Comprehensive projects or individual energy measures

Airsealing & Insulation

HVAC

Biomass

Heat — pellets or chips

Ground-Source and Air-Source Heat Pumps

Controls and heat distributionLighting

Solar – electric, hot water, hot airCombined heat and power non-energy project work that is connected to the energy project, as long as the SIR>1 (ie roof replacement with solar project)

Projects > $250K

The National C-PACE Scene

32 states have adopted PACE financing tool

To date,

790 Commercial buildings upgraded,

$

280M

, 3,300 jobs

Courtesy PACENation

Current Obstacles

No completed projects in NH to show precedent

Need examples to get range of rates/terms

Lien position has created significant uncertainty in who will invest

NH tax law significantly different from other C-PACE states

Existing tax software varies among municipalities

NH C-PACE Adoption Status

Participating Municipalities:

Hanover – 2 prospects in early stages

In discussion with:

Dover

Concord

Lebanon

Keene

PortsmouthDurham

Next

Steps for Municipal Adoption

Support from Municipal Energy Committee

Work with Municipal Staff

Tax software

Implementation/ enforcement concerns

Present to City/Town Council or or C-PACE added to Town Meeting Warrant

Review template resolution, agreements, lien documentsC-PACE adoption!

at Town Meeting or City/Town Council

Thank you!

Scott Maslansky, C-PACE Program Manager

The Jordan Institute

smaslansky@jordaninstitute.org

603-226-1009, x202

6 Dixon Avenue, Suite 201

Concord, NH

03301

www.cpace-nh.com

NH C-PACE Program Team

Jordan Institute, Inc.

– Statewide Administrator,

Day

to

Day

C

oordination

, Visibility, Education,

Project ManagementSustainable Real Estate Solutions, Inc. – Energy Project Origination/Development, SIR Analysis, Contractor Training.Resilient Buildings Group, Inc. – Energy Project Vetting, Commissioning, M+V

NH Community Development Finance Authority – Financial Vetting, C-PACE Loan Repayment Coordination, Project Warehousing