A closer look at the financing of energy retrofitting
Obligatory building performance standards for energy efficiency and the reduction of greenhouse gas emissions have been established or considered in several US cities and states and around the world. But, in order to meet long-term climate goals, more aggressive approaches to financing retrofits are needed, according to participants in a recent webinar from the United States Council for an Energy Efficient Economy.
Moderator Steve Nadel, Executive Director of ACEEE, noted that at current rates it would take around 500 years to renovate all residential properties and 67 years to complete energy efficient renovations on all commercial buildings.
The 90-minute webinar highlighted three locations in the United States implementing building performance standards: Washington, DC; New York and Washington State. Panelists – Alfred Griffin, President, NY Green Bank; Eli Hopson, CEO, DC Green Bank; John Mandyck, CEO, Urban Green Council; and Emily Salzberg, director general of the Building Standards Unit, Washington State Department of Commerce, also highlighted programs and some financial structures that can be used to help homeowners finance improvements.
Green banks, flexible financing
Griffin, who oversees partnerships with private sector capital providers and others to encourage private investment in renewable energy and energy efficiency projects, said that although the NY Green Bank has entered into more $ 1 billion in transactions since its inception by Governor Andrew Cuomo. in 2013 he would like to see more offers.
“Where there is a good policy and a good regulatory framework, market activity will be stimulated”, he noted.
The nonprofit Urban Green Council’s mission is to transform New York City buildings for a sustainable future. And, according to CEO John Mandyck, there’s a lot at stake when it comes to climate change.
“New York City has $ 3 trillion in insured coastal assets that are vulnerable to climate change,” he said, adding that the sea level at Battery in Lower Manhattan has risen by one foot in 100 years.
In April last year, the city council passed the climate mobilization law, including Local law 97 of 2019, requiring buildings over 25,000 square feet to meet strict GHG emission limits from 2024. Initially, this impacts about 20% of all buildings – commercial and multi-family – and increases the coverage until 2050, when large buildings will have to reduce GHGs by 80%.
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Legislation authorizing the Commercial Property Assessed Clean Energy, or C-PACE, program has been passed and allows homeowners to borrow money for energy efficiency and renewable energy projects and repay it through ” an assessment on the property tax bill.
In this market, C-PACE presents itself as an ideal form of financing, according to Mandcyk. Some buildings may never reach energy efficiency ceilings due to their density and they may be candidates for carbon trading, allowing a building with additional energy efficiency credits to sell to a buyer who needs the credits to reach. her goals.
DC Green Bank will provide loans, leases and other financing, including C-PACE, to help building owners finance energy efficiency upgrades to meet the standard of being zero carbon by 2050. Enacted in 2018, the DC Omnibus Amendment Act requires buildings 50,000 square feet and larger to meet energy performance standards by 2026, with standards extending to larger buildings through 2031. Ultimately, all buildings of 10,000 square feet and more will have to meet standards.
In July 2018, Washington, DC, became the first American city to establish a green bank. Eli Hopson, CEO of DC Green Bank, said the bank will not be a competitor to private capital but will instead pave the way for a variety of flexible financing options. For example, a pre-development loan that would have a term of two years could be extended into a permanent loan – this is a feature the green bank hopes to deliver in 2021.
Hopson also revealed that DC Green Bank is working with its counterpart in Montgomery County, Md., To bring the Montgomery Commercial Lending Program for Energy Efficiency and Renewable Energy to DC in the near future, which has terms of up to ‘to 12 years for borrowers.
In May 2019, the Washington State Clean Buildings Bill was enacted, requiring the state Department of Commerce to develop and implement energy performance standards for 50,000 commercial buildings. square feet or more and to provide incentives for early compliance.
Starting in 2026, the standards will become mandatory for buildings of 220,000 square feet or more and eventually add mandates to more commercial buildings. According to Emily Salzberg, general manager of the building standards unit of the state’s commerce department, the rules will be completed by November and building owners will be notified of the opportunities in the incentive program by the time. ‘next summer.
Salzberg also noted that the department is working with each county to create a database that will provide a portal for building owners to request programs and track compliance.