Category: Insights

Insights

Is Your Building Prepared For Coronavirus?

March 16, 2020

In response to Covid-19, many companies have encouraged employees to work from home until further notice. The absence of tenants presents an opportunity for Commercial Office Building Owners to adjust their building’s energy output appropriately and even save money on utility bills.

Tips for Commercial Office Building Owners

Here are a few tips to ensure you don’t waste energy during this time:

  1. Make sure all lights are turned off. If lights are controlled by a timer, update the status to “Holiday” or “Unoccupied” until further notice.
  2. Turn off your thermostats.There’s no need to cool or heat unoccupied buildings.
  3. Turn off your plug-load. If you do not have a master plug-load controller, physically unplug all power cords from any active outlets.
  4. If you have solar, use this opportunity to build excess energy for utility discounts or to fill your battery.

Tips for Multi-Family Building Owners

This will have an adverse affect on Multi-Family Building Owners. Since most companies are requiring their employees to work from home, the utility bills will most likely increase. Here are some steps tenants can take to minimize the increase:

  1. Turn-off lights in unoccupied rooms. If you have not already replaced your fluorescent lights with LEDs, do so as soon as possible. LEDs do not create heat and use less energy.
  2. If possible, open a window to cool your apartment, rather than utilizing your air conditioner.
  3. Unplug any unused power cords. If an outlet is not switched off, and has a plug inserted, the outlet will still use energy.
  4. Take shorter showers. Showers should take 7 minutes or less.
  5. Turn the water off while brushing your teeth. Only turn the water on to rinse your toothbrush.
  6. Only run the dishwasher when it’s full. Use the energy-saver mode if available. Otherwise, fill the sink and wash dishes by hand.
  7. Report any water leaks. This can lead to a much larger problem.

For more tips on how to reduce utility costs CONTACT AN ENERGY SAVINGS EXPERT

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Energy Efficiency Projects
Financing Insights

Tax Credits Remain For Efficiency Projects In 2018

January 12, 2020

Did you implement Energy Efficiency measures in your building during 2018 or prior? You may be eligible for a tax deduction and/or credit.

As of December 19, 2019 the Senate has approved the 2019 Tax Extender Bill, which extends the 179D deduction and the 45L tax credit. This  allows for the adjustment of 2018 tax returns to include qualified energy-efficiency projects from that year.

The deadline to amend 2018 tax returns is December 31, 2020. Projects from earlier than 2018 may still qualify if you have not taken advantage of available incentives. Ask Green EconoMe how you can maximize this benefit.

What is Section 179D Tax Deduction

179D was created in 2005 under the Energy Policy Act (EPACT), allowing a tax deduction from $0.30 to $1.80 per square foot for the installation of energy efficiency systems in the commercial space.

Building owners are not the only beneficiaries of this tax deduction. Tenants may also be eligible if they take on construction spending. However, deductions can only be recognized for the year that efficiency measures are up and running.

What is Section 45L Tax Credit

45L was created in 2005, providing $2,000 per dwelling unit that consumes less energy than national standards. This credit is meant for low-rise apartment developers with buildings 3 stories or fewer. Buildings 4 stories or more may qualify for the 179D deduction detailed above. The 45L credit can be applied to new construction or the refurbishment of existing units. Like with 179D, in order to be recognized for the tax credit, the new or refurbished unit must be leased or sold within the year that tax return is filed.

 

Does my Building Qualify for Tax Deduction or Tax Credit?

Green EconoME is a woman-owned, multi-disciplinary energy consulting and construction firm providing full-scale energy efficiency services to diverse public and private sector clients. Not only are we led by a former CFO who seeks all incentives available for each project, our ROI data is also 98% accurate. Contact us to see if any of your projects are eligible for these extensions!

info@greeneconome.com or (818) 681-5750

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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!!

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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.

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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.

 

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