Category: Insights

Solar PV
Financing Insights

Solar PV Savings With 30% Tax Credit

November 12, 2019

Solar PV reduces operating costs & increases building’s valuation!

Why should building owners consider Solar PV installations?

  1. Solar Energy is truly renewable. The amount of energy generated by a PV system reduces both the kWh used by a building and the building’s peak KW.
  2. The cost of solar-generated energy is much lower than the cost of energy purchased from a utility.
  3. Thanks to the longevity of solar systems (appx. 25 years), a solar PV investment will allow owners to reap financial benefits for years to come.
  4. The minute the system starts operating, Net Operating Income (NOI) increases.
  5. Stop relying on others for energy by creating your own on-site energy independence.
  6. Get Net Energy Metering (NEM) credit when excess energy gets sent back to the grid.
  7. Solar Projects are eligible for the 30% Federal Investment Tax Credit (ITC). Installation of a new roof at the same time as the solar project, allows for 30% ITC on both projects.  This Tax credit is dropping to 26% on January 1, 2020.
  8. Demonstrate to your employees, neighbors, and customers that you’re serious about  “Going Green”.

Case Study on Solar PV Savings

A hotel client invested $1.4 million into Solar PV systems to provide 27% of the hotel’s energy usage. With current tax credits and accelerated bonus depreciation, the project cost was reduced by 54%. Incredible.

Consult us today and see why a Solar PV system makes sense for all the above reasons and more!!

Book Personal Q&A
green lease
Insights

WHAT IS A GREEN LEASE & HOW TO QUALIFY FOR IT

October 4, 2018

Within typical lease structures, landlords incur capital expenses, but see none of the cost-saving benefits, when conducting an energy efficiency retrofit.  The resulting efficiency favors the tenant, who see utility costs go down. Thus, owners hesitate to invest in improving the efficiency of their buildings. This is called the “split incentive”.

But what if there was a way to provide incentives to both owners and tenants?  The solution lies in a relatively new concept called “Green Leases”, also known as energy-aligned, high-performance or energy-efficient leasing. These leases align the financial and environmental goals of the landlords and tenants to work together to save money, conserve resources and ensure the efficient operation of buildings.

WHAT IS A GREEN LEASE?

A green lease incorporates energy and cost conscious clauses that benefit both building owners and  their tenants. It is important to engage stakeholders as soon as possible and gain buy-in on the outset of the leasing process. The earlier the parties communicate their sustainability goals, the higher probability the green lease language will remain in the final lease.

With Green Leases,  landlords can adopt a  “cost recovery clause”, also known as “cost pass-through” language, to amortize and recoup capital costs for energy efficiency improvements made to the building and common areas.  This allows owners to reap significant long-term savings while complying with local and state laws.

Ordinances like the City of LA’s EBEWE,  mandate minimum levels of building efficiency, meaning retrofit costs are inevitable in order to comply.

HOW TO QUALIFY FOR A GREEN LEASE?

Green Lease Leaders*, an association of landlords, tenants, brokers, and energy experts, has developed a best practices breakdown of what should constitute a “green lease” for commercial, “high-performance” buildings.

Levels of Green Lease qualification are broken into two tiers.  

  1. Silver (Foundational)
  2. Gold (Implementation)

To reach the Silver-level, owners must demonstrate the development of foundational policies and practices that encourage reduced energy consumption in leased spaces.  Such policies and practices must include the following prerequisites, communicated in a standard lease or corporate guidelines:

  • Provide a sustainability contact to tenants (either at the Owner’s office or a third party consultant)
  • Implement a cost recovery clause for energy efficiency upgrades benefiting tenant (same as above)

The Gold-level Green Lease requires owners to implement at least five of the following practices, constituted in the lease:

  • Track common area energy use
  • Track common area water use
  • Disclose whole-building ENERGY STAR score to tenants annually
  • Ensure brokers have energy training
  • Implement landlord energy management best practices
  • Require tenants to purchase on-site renewables if offered by landlord and competitively priced
  • Meter tenant spaces that are greater than 5,000 sf
  • Request annual tenant energy disclosure
  • Request minimum energy efficiency fit-out for tenants
  • Demonstrate innovation in leasing

Owners with existing leases not imminently up for renewal can still qualify and be recognized for a Green Lease policy so long as such Green Lease requirements are met in all negotiations going forward.

Talk To Experts
Book Personal Q&A
Benefits Of Energy Benchmarking
Benchmarking Insights

4 Benefits Of Energy Benchmarking

October 3, 2018

Energy Benchmarking measures and reports the energy performance of a given building, ensuring compliance with local and state laws.  It also allows for performance comparisons to other benchmarked buildings of a similar size, occupancy and climate.

1. COMPLIANCE

Benchmarking via the ENERGY STAR Portfolio Manager software is required by both city and state-wide legislature. Cities such as, Los Angeles (EBEWE), San Francisco, and Berkeley have all enacted ordinances requiring commercial and multi-family buildings to conduct an energy audit and report their annual energy usage. Most recently, the State of California has renewed a new energy disclosure law, AB 802, formerly known as AB 1103, requiring annual energy disclosure.

2. COST REDUCTION

Research shows that commercial buildings waste 30% of their energy. Building energy benchmarking empowers its owners by revealing crucial energy use data, pinpointing areas of potential efficiency improvement and cost savings. Such transparency allows owners to remain competitive and to take specific action to increase the longevity of building systems.

Owners who have benchmarked their buildings are more inclined to focus on energy efficiency and have consistently reduced their energy use by an average of 2.4% per year.

3. COMPARISON

Benchmarking is available for 21 different types of facilities and produces an Energy Star Score between 1 and 100, with 100 being the most energy efficiency. The process also calculates the Site and Source Energy Use Intensity (EUI) of the building and compares it against the National Median of CBECS data*. When comparing these scores against similar building types/uses in the software, building owners begin to understand how this performance stands in regards to energy and water efficiency. Owners can take specific steps to mitigate energy shortfalls and improve efficiency, resulting in a higher net operating income.

*  Also known as Commercial Buildings Energy Consumption Survey using 2012 survey data.

4. SMARTER DECISION-MAKING

In addition to supplying current snapshots of a building’s energy use, energy benchmarking yields data on past use as well, giving light to patterns of use over time.

Such a window grants owners the viewpoint to make smarter decisions about energy efficiency solutions and energy management and to optimize capital investments into energy-efficient technologies going forward.

Consistent energy benchmarking provides valuable insight as to the building’s performance over time which provides data for decision-making.

SUPPORT

Getting started with benchmarking can often be the biggest hurdle.

Contact Green EconoME to begin the benchmarking process, or to find out more. We have benchmarked over 1400 buildings.

 

Book Personal Q&A
1 2 3