get there one building at a time . Each facility owner and each business that embraces energy efficiency and sources their energy from renewable sources contributes to the fight against climate change .
What financing options available for energy upgrades ? CS : Property Assessed Clean Energy ( PACE ) is a California state program that allows you to use your facility ’ s tax base and directly apply it to energy conservation upgrades and other energy projects against the tax base . It ’ s a savings on property taxes over a period of time , utilizing energy savings to pay off those taxes . It ’ s a reissuance of how taxes are paid . This financing model to energy efficiency and renewable energy allows a property owner to implement improvements without a large up-front cash payment . Property owners that voluntarily choose to participate in a PACE program repay their improvement costs over a set time period — typically 10 to 20 years — through property assessments , which are secured by the property itself and paid as an addition to the owners ’ property tax bills . PACE eligible improvements are broad , window upgrades , insulation , renewable energy , water efficiency , seismic upgrades , and more . Owners can use the PACE mechanism to convert their facilities into a non-grid reliant building . If you can be 90 % reliant on your self-generated assets , you ’ ll have an extra layer of redundancy . Owners won ’ t have to worry about costs and reliability issues with the grid . For some of the mega energy consumers like port terminals , which are critical infrastructure , it makes sense to have that extra layer of self-generated reliability .
With COVID upending businesses , cities , and states , do you think now is a good time for energy upgrades ? CS : I think that now is absolutely the right time . Many municipalities are cash strapped from spending their budgets dealing with the pandemic . How can we help both our public sector clients as well as our private sector clients ? We can design and engineer new energy solutions to give them significant energy savings for the next 20 years . That ’ s the goal of the P2S energy market , helping our clients save money on energy costs . We want to help them get energy-saving projects off the ground .
Which renewable energy technologies are best suited for facilities to self-generate power ? CS : I think we ’ ll see a broad mix of technologies . Solar and storage technologies are seeing significant advancements in capabilities , and the cost of storage has continued to decline . It ’ s a system adopted by a record number of companies today to create their renewable energy programs . But programs can take many forms . There ’ s thermal energy storage technologies , hydrogen , as well as natural gas is in the mix for combined heat and power ( CHP ) plants , also known as cogeneration . We ’ ve designed quite a few plants for many sectors or clients , including municipal , higher education , and healthcare clients — anywhere from half a megawatt to several megawatts . The economics of these technologies are pretty easy for clients to get behind . At the end of the day , financial considerations win out . Facility owners will always ask what their return on investment is going to be . Historically , for things like LED lighting and HVAC upgrades , owners looked at a five-year return on investment . Today , they ’ re expecting a two or three-year payback on those upgrades . If you start incorporating bigger ticket items like CHP or a major solar and storage programs , owners were looking at a ten-year horizon . But now ROI for those upgrades has decreased to about five to seven years . Upfront costs for a brand-new CHP system can be pretty significant but compared to the 20-year cost of electrons from an investor-owned utility , nine out of ten times it makes financial sense .
Can you tell me about some of the options for lower energy at buildings ? CS : Sure . “ Building as a Power Plant ” helps owners flatline their energy costs over a period of time . You take all the energy efficiencies that you can from a building and reduce your load to see what your baseline energy load will be going forward . Once an owner has established what the load will be by incorporating various energy conservation measures , they can design a power system with a flatlined cost of energy over 15 or 20 years . That ’ s the value proposition , knowing that costs will be fixed over time . Whereas if you ’ re pulling power off the grid from an investor-owned or municipal utility , you ’ re going to see a continuous increase in cost . Every three years , there ’ s a rate increase . They ’ re projecting doubling the cost of energy over the next
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