Blog: January, 2014

January 28, 2014
Energy Efficiency building energy audits, cash flow analysis, Class B office buildings, financial report, performance risk

A widespread interest of commercial energy efficiency lending from financial institutions is limited by undefined risks associated with energy efficiency projects. The lack of data and information on predictable performance remains as one of the biggest challenges with loan underwriting. Hence, improvements in presenting data that captures the level of uncertainty in energy performance is a critical step towards stimulating greater deal flows in the commercial energy efficiency financing field.

In fact, Class B office buildings projects present good investment opportunities for lenders due to project size, attractive project ROI, and that Class B office building owners tend to have constrains in capital and liquidity.  Aiming to help building owners and investors understand performance risks of energy efficiency retrofit projects, the California Sustainability Alliance conducted a case study on a Class B office building in SoCalGas® region. The whitepaper entitled “Energy Efficiency Financing Risk Assessment Case Study” demonstrates a streamlined standardized protocol for data collection, analysis, and reporting. In addition, the whitepaper discusses financing options available to Class B office building owners.

Key study conclusions include:

  • Industry standards are available to help guide the data collection and analysis process to ensure the validity of the energy savings projections.
  • Once project data is collected and analyzed, the range of expected savings should be estimated through building simulation modeling to capture performance uncertainty.
  • Cash flow analysis should be performed on the high, expected, and low energy savings scenarios to capture financial risk associated with the retrofit project.

As part of the study, the Alliance developed a cash flow analysis calculator customized for Class B building owners to structure their loan proposals after they have completed a building audit. Download the full report for more details.

January 15, 2014
Utilities energy efficiency, GHG emissions, green local government, municipal facilities, water efficiency, water energy

The path to sustainability is difficult. Collaboration and joint efforts can help ease our journey. To this end, leaders from water and energy utilities as well as representatives from local governments of Southern California recently participated in a roundtable to discuss the opportunities to support each other in their efforts to promote energy and water efficiency. The 2013 Utility Sustainability Roundtable, the fourth such event, addressed three main topics: The Water-Energy Nexus, Aligning City Planning and Utility Incentive Cycles, and Cap-and-Trade.

Starting with the Water-Energy Nexus, attendees identified finding ways to present both water and energy efficiency opportunities to customers simultaneously as key to increasing participation in these programs. Such joint marketing must be specific to the customer and therefore requires water and energy suppliers to work together to raise awareness about savings opportunities and available incentives in their overlapping service territories. Joint water-energy audits have also proven to be a successful way to coordinate for increased customer participation.

The discussion then moved to Aligning City Planning and Utility Incentive Cycles. Coordinated communications between utilities and local governments may allow more trust to build and incentive funding to better enable scheduled system renovations in municipal buildings.

The last discussion topic related to an emerging topic: Cap-and-Trade. A forward-looking concept was presented that provides a framework by which utilities might be able to put additional funds toward the energy efficiency projects of local governments in return for the resulting emissions reductions.

The study also highlights a couple initiatives that would help move the ideas discussed forward. Download  the full report for more details.