Making the Business Case (with someone else's money)
Leveraging Rebates and Incentives for Multi-Family Energy Efficiency and Water Conservation Projects
Thanks for joining me for this week’s blog post. One quick housekeeping note, you might have noticed the blog is evolving, including the name. I am merging my two blogs to one location, and one name. I will still be covering waste topics, but in addition, I’ll be covering the topics of energy and water as well. Because the built environment is responsible for 39% of all global emissions, retaining that name seems to make the most sense. I hope you will continue to subscribe regardless if your interest is in waste, water, or electric - I think you’ll find interesting content in all three areas. One final cool thing about thirty nine, in Japanese, “39” has become common texting shorthand for gratitude. What an appropriate reference as I am truly thankful to those of you who subscribe, comment, advise, and help contribute. So Convolution is officially, 39!
Now back to my post this week…
In uncertain times, you may be asking is now the right time to invest in your property? 2020 has certainly had it’s share of uncertainties, but before deciding on an energy or water efficiency project, be sure to check if rebates or incentives are available that might improve the business case, or even add additional measures to further reduce your impact.
You might be asking, why? What’s the catch? At first it might seem counter-intuitive why many utility companies offer significant financial incentives to install equipment that results in you buying less of their product. But allow me to provide some context.
Energy efficiency and water conservation means your property is wasting less. Wasting less means using less. Using less means reduced pollution associated with producing the energy or transporting the water. Less pollution means better health for communities adjacent to utility producing facilities and in the case of electricity, less stress is placed on the grid providing more predictable and resilient supply of energy.
The little secret however, is the reduced demand to provide additional electricity, gas and water also means utilities can defer or avoid building new power plants, pumping stations, etc. Energy efficiency is the cheapest energy resource, research suggests that for every dollar invested, two dollars are realized in return. These savings are also often paired with policies and strategies that states have employed to address regulatory, legal, and other barriers.
The end result is the majority of states have some level of energy efficiency incentive or rebate programs in place, or at least at some point in the year potentially have programs in place. The key is understanding the incentive programs available, and leveraging the availability of those programs to reserve funds for specific projects. Many of these programs are heavily relied on by contractors and property owners which can result in program funding depleting rapidly. In addition to the importance of securing funds before funds are depleted is understanding the program requirements and approval process. Many programs require pre-installation authorization and may also require commissioning or other validation post project to receive funding.
In each case, the program development is unique to the local utility, making it important to partner with a service provider who understands each programs specific requirements and can help you make sure your project fully leverages the potential rebates or incentives. This is one area that Bright Power separates itself. An example of this can be found in the Globe St.com article, “Energy Savings Do Offset Upgrade Costs.” In this example, MG Properties Group’s Stonewood Gardens development in San Diego was certified energy efficient after installing $110,750 on property improvements. Following the improvements, the developer received an incentive check from San Diego Gas & Electric, offsetting the install costs by 93%. “We were not surprised to see the savings nearly cover the costs, in fact, we work hard to model our energy and water efficiency improvement projects to make it as low-risk of an investment as possible,” Bryce Colwell, project manager at Bright Power. If you are considering an energy efficiency project in California, please reach out to me and let’s see if there are opportunities to leverage rebates or incentives for your project.
In addition to incentive and rebate companies, other programs may also be available to help finance energy and water efficiency projects. One such program is the “pay from savings” approach, which allow owners to take the savings generated from their energy and water efficiency upgrades and use them to pay for the upgrades over a period of time.
Bright Power was able to assist an affordable housing operator, Mercy Housing, through such a program at nearly 100 properties across it’s California portfolio. To ensure project returns, Bright Power actively tracks and verified savings through EnergyScoreCards and engages with site staff to help optimize operations and maintenance. The efficiency upgrades being deployed across Mercy Housing’s California portfolio include new LED lighting in common areas and resident apartments, innovative heat pump hot water heating systems, low-flow fixtures on faucets and showerheads, domestic hot water controls, and pipe insulation.
In just the first 6 months the properties realized:
29% decrease in gas usage
9% decrease in electric usage
4% decrease in water usage
7% decrease in carbon emissions
Beyond tracking savings for financing purposes, Mercy Housing can also use this information to see which measures make the greatest impact allowing for strong energy savings and maximizing tenant comfort. It’s a win-win!
When it comes to return on investment, it’s important to fully leverage all available programs to maximize your payback. Partnering with a specialist who can help you fully leverage those programs is an important step. The end result, less environmental impact and more quickly realized financial return. Be sure to fully explore all of your options before you conclude that you don’t have the funding to realize that project, you just might be leaving money on the table.
Stay well!