Many building owners have the desire to upgrade their commercial properties, but in the current state of the economy they are at a loss as to how to financial such upgrades. The presentation will also review current trends in rebates, public sector financing and private sector financing that make such upgrades possible. Target Audience: I think the target audience for this presentation will be building industry professionals, developers, building owners, property managers and commercial real estate brokers, as well as educators from real estate development programs such as San Diego State’s.

1. The Economic & Financial Options in
Retrofitting Commercial Buildings
Presented by: Wally Geer
go2wallyworld@hotmail.com

2. Special Thanks to those who made this
presentation possible:
 SDG&E Energy Innovation Center
 California Center for Sustainable Energy
A special word of thanks to those organizations whose research
contributed content to today’s presentation:
 California Building Commission
 USGBC C4 Chapter
 SDG&E
 TMC Development
 U.S. Small Business Administration
 U.S. Department of Energy
 The California Energy Commission

3. A few requests & comments
 I know we all have busy lives, but please turn your cell phone
off or set it on “vibrate”, thank you.
 If your cell phone rings, the “Wally Rule” is in full force & effect
 We will talk about a lot of facts today,
but please appreciate that some subjective
opinions I may voice are strictly my own
and I’m not speaking on behalf of our
gracious host today

4. Today’s Learning Objective:
It’s all about “Green”, and I don’t mean
saving the Redwoods, the Whales or
the Ozone!

5. Agenda:
 Common Myths about upgrading Commercial Properties
 Energy Consumption 101
 Potential Benefits of Energy Retrofitting
 The Economic Case for Retrofitting
 The Legislative Case for Retrofitting (AB 1103)
 How can an owner reduce their energy costs?
 Everything you every wanted to know about
Energy Audits, but were afraid to ask
 Financial Techniques to analyze your options
 Financial options to pay for your retrofit
 Some final thoughts + questions & answers

6. Common Myths about Energy Savings
as it applies to Building Valuations:
 “Energy costs contributes negligibly to overall value”
 “Uncertainty in energy reporting methods is so high
that building specific estimates are effectively
meaningless”
 “Energy’s impact on value, as with all other elements
of value, is ultimately defined by the market”

7. The Reality of Energy Savings as it
applies to Building Valuations:
 “Although Value is ultimately defined by the market, your
relative position on the Value Scale is determined by Net
Operating Income”
 “Every Dollar saved in Operating Costs equals an additional
dollar of Profit on an owner’s bottom line.
 “Many Energy Savings Retrofit
Features are relatively low tech
and highly cost effective”

8. Common Myths about
Energy Savings
 “Our building is already energy efficient”
 “Energy costs are a pass through to tenants and don’t really
effect me as an owner”
 “The goal of high energy efficiency really doesn’t matter on
small buildings”
 “We’ve been told to focus on “LEED” points and not energy
efficiency”
 “We don’t anticipate selling our building in the near future, so
energy efficiency really doesn’t matter to us”
 “Energy Providers don't really want to save us money”

9. “Energy 101” Facts:
 Our Buildings consume 30% of all Energy Use & 60% of all
Electricity
 They also produce 43% of all harmful carbon emissions

10. Who Produces the CO2 ?

11. The Metrics of Building Operations:
 Source: BOMA

12. Typical Energy Use by Category:
 Source: Pacific Gas & Electric

13. Additional Benefits of an Energy
Efficient “Healthy” Building
Properly balanced buildings with appropriate outside
air sources produce a 3% lower absentee rate.
Source: U.S.G.B.C. & National Institute of Health

14. Potential Benefits
of Energy Retrofitting:
 Lower Operating Costs
 Higher Employee Productivity
 Lower Financing Costs
 Higher Operational Profits
 Higher Building Valuations
 Potentially Significant Return on Investment Dollars spent if
appropriate retrofitting strategies are employed

15. The Economic Case for Retrofitting
 Although each property has its’ own unique set of financial
metrics, appropriate chosen retrofitting upgrades can provide
double digit R.O.I.s

16. Case Study: Sleepy Time Inn
Source of Study: Pacific Gas & Electric & U.S. Dept. of Energy
INCOME: Pre Retrofit Post Retrofit
Gross Scheduled Income $ 506,624 $ 506,624
Vacancy $ 177,318 $ 177,318
New Scheduled Income $ 329,506 $ 329,506
EXPENSES:
Electricity $ 18,766 $ 10,450
Natural Gas $ 5,447 $ 2,850
Water $ 2,886 $ 2,886
Maintenance $ 17,206 $ 17,206
Operations $ 84,347 $ 84,347
Taxes & Licenses $ 64,489 $ 64,489
Reserve $ 8,232 $ 8,232
Subtotal Expenses $ 201,373 $ 190,460

17. Case Study: Sleepy Time Inn
Source of Study: Pacific Gas & Electric & U.S. Dept. of Energy
Scheduled Income $ 329,506 $ 329,506
Expenses $ 201,373 $ 190,460
Net Operating Income $ 128,133 $ 139,046
Cap Rate 8.75% 8.75%
Opinion of Value $ 1,461,958 $ 1,586,678
Effect of Energy Retrofit $ 124,720
Cost of Energy Retrofit $ 65,000

18. Case Study:
Source of Analysis: Greymar Associates & U.S. Small Business Administration
Cost of Retrofit Features: Approximately $ 75,000
YEAR Estimated Monthly Savings Estimated Annual Savings
2010
(Base Year) $ 1,232.73 $ 7,396.38
2011 $ 1,282.04 $ 15,384.47
2012 $ 1,333.32 $ 15,999.85
2013 $ 1,386.65 $ 16,639.84
2014 $ 1,442.12 $ 17,305.44
2015 $ 1,499.80 $ 17,997.65
2016 $ 1,559.80 $ 18,717.56
2017 $ 1,622.19 $ 19,466.26
2018 $ 1,687.08 $ 20,244.91
2019 $ 1,754.56 $ 21,054.71
TOTAL: $ 170,207.08

19. Case Study:
Source of Analysis: Greymar Associates & U.S. Small Business Administration
Cost of Retrofit Features: Approximately $ 75,000
Item: 10 Year Cost Savings
Energy Savings $170,207
Loan Origination Fees $315,000
Loan Spread Savings $ 78,000
TOTAL $563,207

20. Case Study (Adjusted):
Source of Analysis: Greymar Associates & U.S. Small Business Administration
Cost of Retrofit Features: Approximately $ 75,000
Item: 10 Year Cost Savings
Energy Savings $170,207
Loan Origination Fees $115,000
Loan Spread Savings $ 78,000
TOTAL $363,207

21. The Legislative Case for Retrofitting
 1978: What happened in California?
 2004: California Green Building Initiative
(aka EO S-20-40): This legislation mandated a 20% reduction
in state-owned buildings by 2015
 2006: Global Warming Solutions Act
(aka AB 32): This legislation mandated State CHG emissions to
1990 levels by 2020
 October 2007 – AB 1103 is passed and signed by the Governor

22. AB 1103
The Commercial Building Benchmarking Law
 AB 1103 is a “scoring system” with the intent of estimated the
energy efficiency of an existing commercial building.
 The scoring system is based on the EPA’s
“Energy Star Rating System” as estimated by “Portfolio
Manager” software.

23. Energy Star Benchmarking Scores
 Based on a 1 to 100 scale (100 being the most energy efficient
building, 1 being a building that leaks
more than the 1959 Volkswagen
convertible I went through college with)
 The score estimates an “energy use intensity level” (measured
in kBtus / Sq. Ft. / Year)
 Any building that scores 80 or higher is eligible for the Energy
Star rating, but the rating is NOT a requirement of AB 1103

24. Why the Energy Star Rating System?
 Free & Secure software that creates consistent benchmarking
results
 Based on over 140,000 buildings that have been benchmarked
to date
 Based on benchmarking data from over 20 different commercial
building types
 “Energy Star” is recognized by over 75% of Americans
(according to the EPA)

25. AB 1103
Based on a “roll out” schedule, AB 1103 will apply to all
non-residential buildings being sold, leased or
refinanced if they are:
 Owner Occupied > 5,000 Sq. Ft.
 Non-Owner Occupied > 50,000 Sq. Ft.
 Non-Owner Occupied > 10,000 Sq. Ft.
 Owner Occupied > 1,000 Sq. Ft.
 All Non-Residential building > 5,000 Sq. Ft.

26. AB 1103
A Brief History
 October 2007: AB 1103 is passed by the California Legislator &
signed by the Governor
 January 2009: Utility companies must provide consumption
data upon request by customer
 October 2009: AB 531 is passed by the California Legislator &
signed by the Governor which provides the CEC to establish
the roll out schedule of AB 1103
 December 2009: Roll out schedule of AB 1103 is established
and Phase 1 is to commence on Jan. 1, 2012
 January – December 2011: Roll Out Schedule is modified,
modified and modified !!

27. AB 1103
Most Recent Proposed Roll Out (as of Sept. 2011)
 July 1, 2012: All building’s > 50,000 Sq. Ft.
 January 1, 2013: All building’s > 10,000 Sq. Ft &
< 50,000 Sq. Ft.
 July 1, 2013: All owner occupied building’s.
Owner Occupied Buildings
of < 5,000 Sq. Ft. would be exempt

28. How Can an Owner Reduce their
Energy Costs ?
 Start with a professional energy audit and analysis
 The complexity of your energy audit should match your needs and
budget
 Think “Retrofit” First & “New Technology” Second
 Focus on Value versus Cost & chose your analysis savings format
wisely
 Find a balance between your goals and your budget
 Think “Life Cycle”, NOT “Initial Cost”

29. OK, Sounds good, but
“What’s next?”
1.) PRIOR TO INITIATING AN ENERGY AUDIT:
 Identify your energy saving objectives
 Define the metrics to be used in the analysis
 Research potential funding sources & funding strategy
 Research incentive programs
2.) PERFORM THE ENERGY AUDIT BY:
 Determining the type of Audit you require
 Energy Audits are a “Team Sport”
 Document existing conditions & analyzing existing systems
 Identifying energy saving opportunities

30. OK, Sounds good, but
“What’s next?”
3.) ANALYZE THE NUMBERS AND FINANCIAL IMPLICATIONS:
 Set Cost & Saving Targets
 Determine financial techniques to base your financial decisions on
 Calculate Returns
 Analyze financing options
4.) AFTER YOU HAVE PERFORMED ALL OF THE ABOVE:
 Define a game plan that fits your budget and financing options
 “Just do It”

31. 1.) Prior to Starting an Energy Audit
 Identify your energy saving objectives
 Define the metrics to be used in the analysis
 Research funding source & funding strategy
 Research incentive programs

32. Identify your energy saving objectives
 Improve cash flow as a result of lower energy costs
 Create higher building valuation to prepare building for sale
 As part of a refinancing strategy
 As part of a marketing strategy
 To accommodate tenant needs

33. Define the Metrics to be used
in the Analysis
 Energy Star scoring system
 Title 24 or CalGreen documented format
 Specific metrics formula required for incentive programs (cash
or tax incentives)
 Metrics specifically required by lending agencies
 Metrics required by Code Authorities

34. Research potential funding source
& funding strategy
 Cash
 Conventional Bank Loans
 Non-traditional Lenders (i.e. SBA, State & Federal lending programs,
etc.)
 Energy Service companies (ESCOs)
 Leased improvements
 Other Options

35. Research Incentive Programs
 Utility Company Incentives
 State sponsored programs administered by Utility Companies
 State & Federal (non-tax based) incentives
 I.R.S. & State of California Tax Incentives
 Vendor Incentives

36. The Energy Audit:
Part Science / Part Black Magic

37. Projected Performance does NOT equal
Actual Performance

38. 2.) PERFORM THE
ENRGY AUDIT BY:
 Determine required level of audit
 Energy Audits are a “Team Sport”
 Document existing conditions
& analyzing existing systems
 Identifying energy saving opportunities

39. Determine the type of
Audit you require
 Preliminary Audit
 Case (or technology) specific Audit
 Goal Specific Audit
 Comprehensive Audit

40. Preliminary Audit
 Generates a rough estimate of potential cost savings
 Identifies primary categories of energy savings that should be
potentially further studied
 Provides a preliminary analysis of economics that might justify
further studies
 Generally produces a limited amount of projections & metrics

41. Case (or technology) Specific Audit
 Provides detailed analysis of specific technologies & systems
 Provides no energy management plan
 May potentially miss high value
non-targeted energy saving opportunities
 Are only as valid as the operating
engineers running & evaluating
the system

42. Goal Specific Audit
 Generally performed as a result of a specific need related to financing,
leasing or building certification
 Generally requires specified metrics and formats to achieve the
desired goal
 Could be produced by a specific vendor trying to sell his (her)
technology and retrofitting services
 May potentially miss high value non-targeted energy saving
opportunities
 Can produce a desired result, but in regards to energy savings, can
result in a “tail wagging the dog” implementation strategy

43. Comprehensive Audit
 Analyzing all major building systems & how they work within a
synergistic system
 Considers on site and / or cogeneration of energy
 Includes highly comprehensive energy cost savings projections
 Includes estimates of the cost of retrofits suggested
 Analyzes returns based on owner’s financial goals and criteria

44. Energy Audits are a “Team Sport”
Prior to starting your Energy Audit & analysis,
assemble your team:
 Building Owner (if privately held small company)
 CEO, COO, CFO, CTO in larger companies
 Director of real estate and facilities management
 Building level maintenance & operational staff
 Major vendors & service providers
 Major tenants that influence
building’s operation

45. Document existing conditions
& analyzing existing systems
 Building Design, construction type, square footage, insulation type
 Site plan, building orientation, windows and other fenestrations & other
glazing
 Ventilation & mechanical systems
 Building hours of operation & building use
 Document specialty how power consumption uses (i.e. server farms,
high power manufacturing equipment, etc.)
 Gather existing utility data

46. Identify Energy Saving Opportunities
Step 1
Start by focusing on the “low hanging fruit”
items first:
 Lighting
 Heating & Air Conditioning
 Building Shell / Glazing & Insulation

47. Identify Energy Saving Opportunities
Step 2
Provide an in-depth analysis of:
 Lighting & control systems
 HVAC
 Building Envelope
 Domestic Hot Water
 On site energy generation
 Hours of operation as the effect peak usage energy costs
 High Power consumption operational equipment

48. 3.) ANALYZE THE NUMBERS AND
FINANCIAL IMPLICATIONS:
 Set Budgets & Saving Targets
 Determine financial techniques to base your financial decisions on
 Calculate Returns
 Analyze financing options

49. Set Cost & Saving Targets
Cost & Savings Analysis
SYSTEM COST Annual Metric Funding Cross
Savings Basis of Source Contingency
Return
Lighting & control systems
HVAC
Building Envelope
Domestic Hot Water
On site energy generation
Hours of operation as the effect peak usage energy costs
High Power consumption operational equipment

50. Set Cost & Saving Targets
Typical Example
SYSTEM: COST Typical Metric Funding Cross
Annual Basis of
Savings Return Source Contingency
Lighting & control systems $ 17,000 $ 3,850 IRR
HVAC $ 49,000 $ 2,880 LCCA
Building Envelope $ 5,000 $ 350 IRR
Domestic Hot Water N.A. N.A. N.A. N.A. N.A.
On site energy generation $ 48,000 $ 3,000 PV
Hours of operation as the effect peak usage energy Zero $ 5,600 IRR
costs
High Power consumption operational equipment $ 4,000 See PV "On Site
“On Site” Power”

51. Determine financial techniques to
base your financial decisions on
 Simple Pay Back Period (SPP)
 Return on Investment (ROI)
 Discount Rate (Not a stand alone metric)
 Present Value (PV)
 Internal Rate of Return (IRR)
 Life Cycle Cost Analysis (LCCA)

52. Simple Pay Back Period (SPP)
“Simple Pay Back Period” is the amount of time it takes to recover the
initial cost of the improvement.
“Simple Pay Back Period” is calculated by taking the cost of the
improvement and dividing it by the year one savings.
For example, if an improvement cost $10,000 and returned $2,500 its’ first
year, the SPP would be 4 years
SPP is generally expressed in years & months

53. Simple Pay Back Period
Pros & Cons
Pros:
 Considered by some a good “quick check” for comparisons
 Easily understandable by “non-financial” types
 It can potentially be used in negotiating cost savings with tenants

54. Simple Pay Back Period
Pros & Cons
Cons:
 SPP does NOT take into account the time value of money or the cost
of debt service to service those improvements that were financed
 SPP does NOT factor in life cycle cost or operational costs
 There are many preconceived myths and prejudices about what is a
“good” Simple Pay Back Period
Summary:
 SPP is a VERY POOR metric to compare retrofitting options with

55. Return on Investment (ROI)
“Return on Investment” is the reciprocal of Simple Pay Back
Period
“Return on Investment” is calculated by dividing the year one
savings by the cost of the improvement.
For example, if an improvement saved $2,500 the first year and
the cost was $10,000, the ROI would be 25%
ROI is generally expressed in a percentage value

56. Return on Investment
Pros & Cons
Pros:
 ROI is simple and easily understandable
 Is easily compared to owner’s cost of capital (an independent metric)
 Is a good metric when doing lender, investors & potential buyer
presentations and justifying a higher building valuation and CAP rate.
 ROI may serve as a required metric for some lending and financial
scenarios

57. Return on Investment
Pros & Cons
Cons:
 ROI assumes a consistent annual rate of savings
 ROI does NOT factor in life cycle cost or operational costs
 ROI is NOT based on a specific time period analysis for the savings
Summary:
 Although ROI is a potentially useful metric to make “Like for Like”
comparisons of vendor proposals, ROI shares the same problems that
SPP has
 Although ROI may be a good starting place, it is generally NOT a good
metric to solely make significant financial decisions with

58. Discount Rate
“Discount Rate” is the minimum rate of return required by an
investor
“Discount Rate” is the metric that is used when analyzing retrofit
options in the format of “Present Value”
The HIGHER the perceived risk of an investment, the HIGHER the
“Discount Rate”
The HIGHER the “Discount Rate”, the LOWER the “Present Value”

59. There are 2 Types of Discount Rates
“REAL Discount Rates” do not consider inflation as a factor
“NOMINAL Discount Rates” take an assumed rate of inflation into
account when creating the value of an improvement

60. Discount Rates
Pros & Cons
Pros:
 Discount Rates serve as the basis for “Present Value” calculations. You
CANNOT determine “Present Value” (PV) without a “Discount Rate” based on
your own financial situation
Cons:
 Discount Rates are based on past and present financial information, which can
change in the future and therefore make the Discount Rate highly inaccurate
and subjective.
 Discount rates can be influenced by the cost of money (i.e. interest) and the
leverage of debt used to make the improvements.
Summary:
 Discount Rate is NOT a stand alone metric to base decisions on, but is an
important number that must be used to calculate Present Value analysis

61. Present Value (PV)
“Present
Value” is the value that a particular cash flow is worth in
TODAY’S dollars.
“Present Value” is based on the concept that money earns interest or
income.
Cash Flow
Present Value = ______________________
(1 + Discount Rate) @ Day 1
If $0.91 (Ninety One Cents) were invested at a 10% return within one
year, the “Present Value” of that $0.91 would be $1.00 (One dollar) at
Day 1 of the investment.

62. Present Value (PV)
3 Year Example
Assume a $1.00 (One Dollar) Investment’s Present
Value @ 10% over a three year period
 Year 1 Value = $0.91
 Year 2 Value = $0.83
 Year 3 Value = $0.75

63. Present Value (PV)
Pros & Cons
Pros:
 PV is simple and easily understandable
 PV is a widely accepted standard by lenders, investors & Financial
Advisors
 PV, when properly used, acknowledges the ups and downs of cash
flow related issues

64. Present Value
Pros & Cons
Cons:
 PV is based on a constant Discount Rate, but the Discount
Rate can be an inaccurate projection of the FUTURE based on
data from the PAST.
 If you are going to use PV as a metric to base decisions on,
there must be an “End Date” to your Present Value Decision.
Summary:
 PV is a highly effective tool to base decisions on assuming your
Discount Rate is realistic and proves to be accurate

65. Internal Rate of Return (IRR)
IRR is a valuation method used to estimate the attractiveness of
an investment or capital expenditure
IRR is sometimes referred to as “Economic Rate of Return” (ERR)
IRR takes into account the return of your capital as a declining
balance and bench marks it against an averaged Internal Rate
of Return of the outstanding principal

66. Internal Rate of Return (IRR)
Pros & Cons
Pros:
 IRR is a widely accepted standard by lenders, investors & Financial
Advisors
 IRR is an accurate reflection of return versus Cost of Capital
 IRR recognizes to ups and downs of cash flow
 IRR is a good tool for an investor or building owner to compare a
potential investment against their own cost of capital

67. Internal Rate of Return (IRR)
Pros & Cons
Cons:
 IRR requires an end date to be calculated. The projected end
date can significantly influence the IRR
 IRR assumes that all cash flow is reinvested at the IRR
 Can prove to be inaccurate when based upon “annual” as
opposed to “monthly” savings
Summary:
 IRR is an excellent metric for sophisticated owners and
investors, but is only as good as the base line assumptions that
are made to calculate it (i.e. “garbage in, garbage out”)

68. Life Cycle Cost Analysis (LCCA)
“LCCA” calculates total cost, versus savings, of the life of a
specific piece of equipment or technology
“LCCA” is a significant metric when making long term, major
capital improvements or retrofits, including:
 Initial Cost
 Operational, maintenance & repair costs
 Financing costs
 Serviceable life of the equipment or technology
 Salvage Value at “end of life” (if any)

69. Life Cycle Cost Analysis (LCCA)
Pros & Cons
Pros:
 Can prove to be an excellent metric when evaluating high ticket
installations of new equipment and systems
 Incorporates the time & value of money into it’s analysis
 Can be used as an additional set of metrics to further refine ROI & IRR
calculations

70. Life Cycle Cost Analysis (LCCA)
Pros & Cons
Cons:
 Not widely understood
 Requires a number of assumptions & variables that may or may not
come to pass in the future
 Can often be based on vendors claims, that are NOT warranties
Summary:
 For financially sophisticated owners & investors, LCCA is an excellent
metric, but is only as good as the base line assumptions that are made
to calculate it (i.e. “garbage in, garbage out”)

71. Financing Options
“Show Me the Money!”
 Cash
 Cash Rebates from Utility Companies
 Tax Rebates
 Conventional Bank Loans
 Leased Improvements
 Energy Service Companies (ESCOs)
 Non-traditional Lenders (i.e. SBA, State & Federal lending
programs, etc.)
 Your Flaky Brother in Law
whose never worked a day
in his life and who just
won the Lottery

72. Energy Service Company (ESCO)
 An Energy Service Company (aka “ESCO”), is a business that
develops, installs, and arranges financing for projects designed to
improve the energy efficiency and maintenance costs for facilities over
a seven to twenty year time period.
 ESCOs generally act as project developers for a wide range of tasks
and assume the technical and performance risk associated with the
project. Typically, they offer the following services:
– Develop, design, and arrange financing for energy efficiency
projects
– Install and maintain the energy efficient equipment involved
– Measure, monitor, and verify the project's energy savings
– Assume the risk that the project will save the amount of energy
guaranteed.

73. Energy Service Company (ESCO)
Pros & Cons
Pros:
 Guarantees your energy costs for an extended period of time
 Serves as a potential hedge against rising energy costs not
caused by your facilities operation
 A properly negotiated contract can also integrate total life cycle
costs which can stabilize cash flow projections
 Removes the burden of energy management from the building’s
owner

74. Energy Service Company (ESCO)
Pros & Cons
Cons:
 Requires sophisticated owner or facility manager to participate in the
decision of selecting and contracting with an ESCO
 Is based on two parties (the building owner & the ESCO) “betting” on
the cost of energy in the future
 Can be costly if the ESCO fails (i.e. bankruptcy) in the future
Summary:
 A potentially excellent option for major facilities who want the stability
of fixed expenses in relation to their future energy costs.
 Is only as good as the management & financial strength of the ESCO

75. How to evaluate if an ESCO
is right for you?
 Develop a facility profile
 Set energy cost goals and priorities
 Create an RFP for services
 Invite ESCOs to visit you facility
 Select an ESCO based on your RFP
 Negotiate a long term contract
that achieves your goals
 Enjoy the benefits

76. SBA 504 Green Loans
The U. S. Small Business Administration is one of the largest
lenders in America for privately held companies that own their
own real estate
SBA loans can produce 90% Loans to Value (LTVs) as compared
to conventional lenders who are currently making loans at 70%
to 80% LTVs
Under certain circumstances, energy upgrades and retrofits can be
financed in part, or in whole, at a lower rate than conventional
lending.

77. SBA 504 Green Loans
Pros & Cons
Pros:
 Can produce higher Loan to Values than conventional lenders
are currently offering in the market place
 Rewards the owner with fewer origination fees and better rates
if their building is retrofitted to a appropriate energy standard
 Can apply to new construction, acquisition of an existing
building, or refinancing of an existing building

78. SBA 504 Green Loans
Pros & Cons
Cons:
 Only applies to business owners who operate in their own
facility and occupy at least 51% of the total building (the
remaining 49% can be rented).
 Requires strong credit and a documented track record of the
operating company
 Requires working with a conventional bank and a CDC (i.e.
SBA Lender) that really understand the program.
Summary:
 An incredible program if your business and financial situation
matches the criteria of the program.

79. Some Final Thoughts:
 There is no “One Solution Fits All” answer to reducing your
energy costs and needs. Every building & every owner has their
own unique set of needs & goals
 Do your homework, work with qualified professionals
 Work with metrics you understand
 Avoid first generation “Latest & Greatest” technology
 Respect “single source vendors”, but take them with a grain of
salt. After all, they have a hammer

80. Some Final Thoughts:
 You don’t have to be a tree hugger to embrace energy
retrofitting, it just makes economic sense!
 DO IT FOR THE DOLLARS, but know that
you just might be doing others
some good in the process

81. It’s Question &
Answer Time
“Mr. Geer, may I
be excused, my
brain is full”

82. On behalf of the SDG&E Energy Innovation Center, the
California Center for Sustainable Energy and myself,
THANK YOU FOR ATTENDING
May the Force and Lower Energy Bills
Be with You!