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Valley businesses can reduce energy and water costs with innovative loan program

Posted: March 25, 2015 5:18 p.m.
Updated: March 25, 2015 5:18 p.m.
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Santa Clarita Valley businesses can find relief from soaring energy costs and water bills thanks to a national program that eliminates costly upfront installation expenses for green-technology upgrades.

The Property-Assessed Clean Energy program provides building owners with 100 percent financing of the cost of energy efficiency upgrades, with repayment plans lasting as long as 20 years. The loans can be used for upgrades involving heating, cooling, lighting, ventilation, insulation, water use and other building systems that can be replaced with more energy-efficient and low-water alternatives.

The loans are paid back as part of a property tax assessment increase; however, building owners will be able to completely repay the loans using just the savings from lower utility bills, according to the PACE website. Business owners should even be able to make a profit on the deal, saving more in utility bills than they pay for the financing, and increasing the values of their properties.

In addition, PACE loans are transferable to new owners in the form of their property tax assessments, making sales of the improved buildings easier for the original owner. Another benefit of the PACE program for building owners is that the day the structure upgrades are complete, the value of the building increases, making the property more valuable.

The PACE project not only helps commercial property owners realize substantial utility cost savings, it also gives socially conscious businesses an opportunity to go green and generate positive public relations.

How it Works
The process starts with a property owner contacting the PACE program serving his local area. The PACE website provides contact information for potential candidates. The PACE contact will help the property owner complete the application process, arrange for a property audit, approve construction improvements and get approval from the lender that will be involved.

No work begins until the property owner knows the final cost of the semi-annual property tax assessment. Using the projected utility savings and comparing that to the annual loan repayment amount, the property owner can see the total financial impact of the project before he decides to move ahead.

Examples of Upgrades

•Adding solar panels or fuel cells to generate electricity

•Installing energy-efficient lighting systems and bulbs

•Replacing toilets and showers with low-flow models that use less water

•Installing energy-efficient doors and windows

•Adding rain sensors to decrease irrigation and watering use

•Installing programmable thermostats to reduce heating and cooling costs when no one is in a building.

•Installing light sensors to turn on outdoor lights later and shut them off earlier

•Installing a “green roof” with live plants

•Replacing motors on elevators

Case Study
One California business that has found success with the PACE program is the Hilton Hotel in Universal City. The hotel installed energy-efficient glass, replaced old HVAC units, installed low-flow showerheads and added LED lighting, among other retrofits.

The project cost an estimated $7 million, with none of the loan coming from public funding. Estimated annual utility cost savings including $800,000 in reduced energy expenses and close to $300,000 in reduce water usage, according to PACE. The Hilton estimates its property value increase at $30 million.

Contractors Also Benefit
Energy services contractors should learn about the PACE program to help make them more competitive when bidding on projects, or help them generate new work from clients who might not know they can afford upgrades.

Who to Contact
The PACE program is endorsed by the Santa Clarita Valley Economic Development Corporation, which can answer questions about the program. You can visit the SCVEDC website at www.scvedc.org or call 66-288-4400. The PACE website (www.pace.org) provides a 90-second video overview of the program for property owners, as well local contact information.

The SCVEDC is also holding a free lunch-and-learn about energy efficiency for Valley-area business owners. The program, titled “Energy Efficiency Solutions for SCV Small Businesses” will take place on April 13 at 11:45 a.m. to 1:00 p.m. at the College of the Canyons in Santa Clarita. Topics covered will include time-of-use rates, energy audits and energy reduction programs. Business owners can reserve a spot by registering at www.scvedc.org/energy.

 

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