Property Assessed Clean Energy (PACE) Funding


Building Performance Tracking is the process of analyzing a building’s operations and energy consumption over time to identify anomalies and areas for potential improvement.

Measurement and Verification(M&V) is a process of using actual measurement, calculation, and/or modeling to reliably determine actual energy/utility savings achieved within a facility by an energy management, energy conservation, or energy efficiency project.

The PACE structure was enacted into California State law in 2008, to help property owners fund efficiency upgrades and onsite clean power generation projects. Under PACE property owners can negotiate project-specific financing terms with the investor(s) of their choice, and repay the cost of the upgrade over time through a voluntary contractual assessment on the property tax bill. PACE can be used to fund a range of building performance upgrades, from high-efficiency lighting retrofits, to advanced controls systems, to installations of fuel cells and solar photovoltaic power generation.

And because PACE assessments are fully secured through contractual assessments, capital providers have the security to offer financing at lower rates and over longer periods of time than has been possible until now. This combination of lower rates and longer terms improves the economics of deeper energy efficiency upgrades and on-site power generation projects, and allows for positive cash-flow from day one.

PACE is voluntary, not mandated by the government. It provides long term funding from private capital markets at low cost, and requires no subsidies. PACE raises property values by making buildings less expensive to light, heat, and cool and enjoys broad-based support nationwide. PACE enabling legislation has been adopted by 24 states in just 24 months, and there are dozens of programs in operation and in development around the country today.

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CA PUC: Customer-side Distributed Generation Policies & Programs


The CPUC oversees two incentive programs for customer-side of the meter distributed generation, also called “onsite generation” or “self generation”, for customers in the territories of Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison.  The California Energy Commission oversees related incentive programs.

The CPUC Distributed Generation Programs
  1. California Solar Initiative (CSI) – California’s electric utility customers receive upfront incentives when they install solar electric systems on homes, businesses and public sites under the California Solar Initiative.  California’s electric and gas customers receive incentives when they install solar thermal, also known as solar hot water, systems under the California Solar Initiative’s CSI-Thermal Program.

  2. Self-Generation Incentive Program (SGIP) – California’s electric utility customers receive incentives when they install wind turbines, fuel cell cells, or storage system in conjunction with wind turbines or fuel cells under the Self Generation Incentive Program.

California Energy Commission’s Distributed Generation Programs
  1. New Solar Homes Programs – Solar incentives for new residential construction are offered through the Energy Commission’s New Solar Homes Program, a sister program to the CPUC’s California Solar Initiative.

  2. Emerging Renewables Program – Incentives for small (<30 MW) wind and fuel cell systems are offered under the Energy Commission’s Emerging Renewables Program.

The CPUC regulates distributed generation policies and programs on both the customer and utility (wholesale) side of the electric meter.  Customer-side of the meter distributed generation incentive programs include the California Solar Initiative and the Self-Generation Incentive Program. These programs are supported by the CPUC’s oversight of Net Energy Meteringand Interconnection policies. 

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CA AB 1103 – Energy Rating Requirement for Commercial Buildings


Assembly Bill 1103 (Saldana, 2007) allows the Energy Commission to implement the requirements of Assembly Bill 1103 in stages.
Assembly Bill 531 (Saldana, 2009) supercedes Assembly Bill 1103 and clarifies the Energy Commission’s authority to set a schedule of compliance. The initial proposed draft regulations required the initial compliance to begin on January 1, 2011. However, new proposed draft regulations will postpone the initial compliance date until July 1, 2012.
Initial compliance will not be required on January 1, 2012.

From the Center for Sustainable Energy, California (5/11/2010) –

Unlike California’s stringent Title 24 building energy efficiency codes that regulate standards for commercial construction and renovations, AB 1103 comes into play when a building is sold, leased in whole or refinanced. Along with the usual financial and transaction disclosures, it requires that building owners provide 12 months of energy-use information using the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR Portfolio Manager,.

AB 1103 is one of the ways the state legislature is working to help achieve the greenhouse gas emission reductions mandated by the California Global Warming Solutions Act of 2006, also known as AB 32. Commercial buildings account for more than 35 percent of electricity consumption in California and are significant contributors to the state’s greenhouse gas emissions.

While many in the commercial real estate marketplace believe AB 1103 regulations will be a big headache, they should really see this energy benchmarking as a tremendous opportunity that can benefit both sellers and buyers, according to Beth Brummitt, president of Brummitt Energy Associates, a consulting firm specializing in energy modeling for high-performance buildings. Brummitt was among a panel of local green-building experts who spoke at CCSE in April as part of a workshop on AB 1103 and its impacts on commercial real estate transactions.

“ AB 1103 is a significant game changer across California because it demands a true comparison of building performance with other, similar facilities within the same industry sector, not simply a disclosure of monthly utility costs and energy consumption,” Brummitt said. “Even though building owners may think this is going to harm them, it will actually provide motivation to improve building energy performance, resulting in increased net operating income and enhanced property values.”

The ENERGY STAR Portfolio Manager is a free, online software tool that allows users to track and assess energy consumption tailored to the occupancy of the building in 13 broad categories from banking to warehousing.

“It makes comparisons of a building’s energy performance to statistically representative models of equivalent buildings with similar operating characteristics drawn from a national database compiled by the Department of Energy’s Energy Information Administration,” explained Eric Scheidlinger, manager of efficient sustainable practices at Reno Construction.

In addition to 12 months’ worth of energy-use data and building use, the Portfolio Manager asks for the building size, number of occupants, hours of operation, number of computers, types of equipment and other parameters. In many areas, the local electrical utility can automatically supply and update energy consumption data on a monthly basis.

The result is a rating on a scale of one to 100. A rating of 50% means that the building performs at the midpoint when compared to similar buildings. While a building in Detroit will always use more energy than a comparable one in San Diego, the Portfolio Manager uses national weather data to assure that buildings are compared to those in similar climates. A building that achieves a verified score of 75 or above qualifies for ENERGY STAR certification.

The purpose of AB 1103, according to Brummitt, is to drive the commercial building owners to not only to track and but to also improve their ENERGY STAR rating by optimizing the energy performance of existing systems and installing new energy-efficient upgrades and renewable energy technologies. A higher rating means lower energy costs, decreased occupancy costs and, potentially, increased building valuation.

Buildings with ENERGY STAR certification generally use about 35 percent less energy and save, on average, 50 cents per square foot in energy costs, according to Steve Kaplan of McParlane Building Optimization, a mechanical engineering firm. A study published by the Institute of Business and Economic Research at UC Berkeley found that office buildings with energy efficiency certification have rental rates that are two percent higher per square foot than otherwise identical buildings nearby, and when adjusted for their higher occupancy levels, the “green premium” goes to above six percent.

Knowledgeable building owners and facility managers can usually handle the inputs for the ENERGY STAR Portfolio Manager, particularly if the local utility updates the monthly consumption data. However, since small mistakes can result in skewed information, owners should consider getting professional assistance. Energy Star provides both a benchmarking tool and has a program for awarding an ENERGY STAR Certification. To gain the certification, the data must be verified by a licensed professional engineer.

Commercial building owners in California should start compiling energy-use data this year, regardless of their intention to sell or hold onto their property. It may be a little complicated at first, but you never know when circumstances might require a quick sale, a new lease or a refinance. Starting now will be ever so much easier than trying to backtrack through a years’ worth of energy bills or being surprised by finding out building performance is lower than expected.

Related resources – Clean Techies Blog

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USGBC: Paid-From-Savings Guide to Green Existing Buidlings

Paid from Savings Guide

The best candidates for the paid-from-savings approach are buildings with inefficient or outdated building systems in which upgrades will generate significant cost savings. To achieve LEED for Existing Buildings: O&M certification, these systems must also meet energy-efficiency and performance-period requirements designated in the rating system. LEED for Existing Buildings: O&M certified buildings also implement O&M best practices and sustainable policies.

Executive Summary PDF

The paid-from-savings approach is a financing strategy to green existing buildings. It leverages the savings generated from building system upgrades to pay for a comprehensive greening project within a defined pay-back period. Paid-from-savings projects can use a variety of financing methods including:

• Self-financing,

• tax-exempt lease-purchase agreements for qualifying entities,

• power purchase agreements for renewable energy projects,

• performance contracts for larger projects,

• equipment finance agreements, and

commercial loans or bond financing for qualifying entities.

In many cases, successful projects employ a combination of these options, along with supplemental funding, such as revolving loan funds, utility rebates, and renewable energy grants, as well as funds from the organization’s capital and operating budgets.

They include such items as:

• replacing the boiler,

• replacing the chiller,

• upgrading lighting systems,

• installing a building automation system (BAS), and

• replacing water fixtures.

Owners can achieve their desired return on investment (ROI) and lessen the overall project pay-back period by “bundling” the longer pay-back measures with the quicker pay-back measures to create a project with a shorter overall pay-back period and a higher ROI.

Under a performance contract, an energy services company (ESCO) acts as the project developer and assumes the technical and performance risk associated with the project, including guaranteeing the cost savings generated from the system upgrades for a specified period of time. If the savings guarantee is not met, the ESCO pays the owner the difference. The guarantee is unique to performance contracting and not typical of other paid-from-savings approaches.

To determine the savings that can be guaranteed, the ESCO will conduct an investment-grade energy audit, which provides the basis for calculating the guarantee and creating the project development plan. The audit also serves as the foundation for developing the measurement and verification (M&V) plan, which outlines the specific methods and calculations to ensure the expected savings are realized.

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Pike Research: 10 Building Efficiency Trends to Watch in 2011

2012EETrendsDespite the general weakness in new construction due to the global recession, one building-related field has continued to grow: retrofits tied to improving the efficiency of facilities. A number of factors have been driving this growth. In the new construction that has been taking place, these same drivers have been influencing the design of the buildings.

From Building Efficiency: Ten Trends to Watch in 2011 and Beyond

A multitude of factors will continue to influence the direction of building efficiency efforts around the world in terms of what is implemented and to what degree. Pike Research has selected ten trends among these that are certain to have a major impact on the building efficiency sector in the coming year and beyond.

Ten Building Efficiency Trends to Watch
  1. Energy codes will keep raising the bar and enforcement is catching up.

  2. Mandatory disclosure rules will incentivize building owners to invest in energy efficiency.

  3. The pace of building certification will increase, led by LEED.

  4. Building energy management systems are in high demand.

  5. The U.S. ESCO market will see moderate growth and ESCOs in Asia Pacific’s developing markets will advance rapidly.

  6. Lighting: Not yet “The Year of the LED”.

  7. The connection between efficient buildings and the smart grid will continue to grow.

  8. Increasing number of financing options around the world.

  9. PACE is a financing option struggling to overcome a roadblock of its own.

  10. Systemic conditions, policy choices, and practical considerations will continue to present barriers to achieving energy efficiency, but investments in training, information access, and technology will gradually overcome many of them.

Pike Research has published executive summaries for related studies:

  1. Energy Efficiency Retrofits for Commercial and Public Buildings

  2. Energy Efficient Buildings: Global Outlook

  3. Energy Efficient HVAC Systems

  4. Intelligent Lighting Controls for Commercial Buildings

  5. PACE Financing for Commercial Buildings

Despite the general weakness in new construction due to the global recession, one building-related field has continued to grow: retrofits tied to improving the efficiency of facilities. A number of factors have been driving this growth. In the new construction that has been taking place, these same drivers have been influencing the design of the buildings.

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Top Ten Green Building Megatrends for 2012

BldgMegatrendsCountries with Established Green Building Rating Systems

Yudelson Associates’ Top Ten Green Building MegaTrends include:

  1. Green building in North America will rebound in 2012, using new LEED project registrations as a proxy for this growth. The reduction in commercial real estate construction has not been offset by other sectors such as government construction, which continued to falter, and so the growth rate of new green building projects fell dramatically in 2010 and 2011. Even so, in 2011, LEED in new construction accounted for about 20% of all put-in-place space, with domestic LEED project registrations up almost 40% vs. depressed 2010 levels. However, Yudelson Associates sees faster growth in green retrofits, and notices that ongoing college and university projects and NGO activity are serving to backstop the fall in commercial and governmental construction. In addition, LEED growth has been and will be rapid in China and other fast-growing economies.
  2. Green building will continue to benefit from the Obama Administration’s strengthened focus on greening the executive branch, with its commitment to a minimum of LEED Gold for all federal projects and focus on major energy-efficiency renovations.
  3. The focus of the green building industry will continue its switch from new building design and construction to greening existing buildings. One fast-growing LEED rating system the past two years has been LEED for Existing Buildings Operations and Maintenance (LEED-EBOM), with cumulative floor area in certified projects now greater than in new construction, and I expect this trend to pick up in 2012. Yudelson says, “My book, “Greening Existing Buildings” documents the strategic and tactical components of this trend.” One driver of this MegaTrend is that “‘green’ buildings have rents and asset prices that are significantly higher than those documented for conventional office space,” according to a recent major academic research study on commercial buildings in the U.S. and Europe.
  4. Awareness of the coming global crisis in fresh water supply will increase, leading building designers, owners and managers to take further steps to reduce water consumption in buildings by using more conserving fixtures, rainwater recovery systems and innovative new onsite water technologies. Yudelson says, “My recent book, “Dry Run: Preventing the Next Urban Water Crisis”  shows how this is being done in green buildings all over the world.
  5. The global green building movement will continue to accelerate, as more countries begin to create their own green building incentives and developing their own Green Building Councils. More than 90 countries with incipient or established green building organizations, on all continents, will drive considerable green building growth in 2012. Yudelson comments, “We’re seeing strong growth in China, other places in Asia (e.g., Singapore), Brazil, Eastern Europe, South Africa and the Arabian Peninsula countries. In 2011, for the first time, nearly as many LEED-registered projects were in progress outside the U.S. as in the U.S., up more than 50% compared to 2010 levels and representing 44% of all new LEED project certifications.” In fact, as one expert noted in a recent report, LEED has registered or certified projects in 131 of the world’s 196 countries, with a total floor area of almost 3-billion sq.ft. When combined with the nearly 1.5-billion sq.ft. registered under LEED India and LEED Canada, it is clear that LEED is the dominant global green building certification brand. See the “Green Building Market and Impact Report 2011.”
  6. Zero-net-energy buildings will become increasingly commonplace, in both residential and commercial sectors, as LEED and ENERGY STAR certifications and labels have become too commonplace to confer competitive advantage among building owners. Developers of speculative commercial buildings will also begin to showcase Zero Net Energy designs.
  7. Performance Disclosure will be the fastest emerging trend, highlighted by new requirements in California, Seattle and other locations. Commercial building owners will have to disclose actual building performance to all new tenants and buyers and in some places, to the public at large. This trend is already established in Australia, for example, and will spread rapidly as the easiest way to monitor reductions in carbon emissions from commercial and governmental buildings.
  8. Green Buildings will increasingly be managed in the “Cloud”, as witnessed by the large number of new entrants and new products in fields of building automation, facility management, wireless controls and information management in 2011.
  9. Local and state governments will step up their mandates for green buildings for both themselves and the private sector. We’ll see at least 20 new cities with commercial sector green building mandates, mostly in the “Blue” states. The desire to reduce carbon emissions by going green will lead more government agencies, universities, hospitals and corporate owners to require green buildings from design and construction teams.
  10. Solar power use in buildings will continue to grow with the prospect of increasing utility focus on aggressive state-level renewable power standards (RPS) for 2020. As before, third-party financing partnerships will continue to grow and provide capital for large rooftop systems such as on warehouses and big box retail stores. However, we will see fewer very large solar and wind systems, as federal grant and loan guarantee support begins to be phased out.
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Los Angeles Commercial Building Performance Partnership (LACBPP)


Los Angeles has the most energy efficient buildings in the country, with over 106 million square feet of Energy Star™ certified space. But there is still much more that can be done.

To demonstrate its continued national leadership in building energy efficiency, the City of Los Angeles has become a partner of the Department of Energy’s Better Buildings Challenge, committing to support over 20 million square feet of buildings in reducing energy consumption by at least 20% by 2020.

In order to support property owners in achieving this goal, the City of Los Angeles has developed the LA Commercial Building Performance Partnership (LACBPP) – an ARRA-funded initiative that offers a suite of FREE resources to help you upgrade your buildings while saving energy, saving money, preserving the environment, and making your buildings healthier more comfortable places to live and work.

  1. Up to $250,000 in FREE engineering services from top-tier independent firms

  2. FREE facilitated access to LADWP and SoCal Gas rebates and incentives, as well as state and federal tax incentives such as EPAct 179D

  3. FREE introductions to innovative project financing options

California will soon begin enforcing AB 1103, a law that will require commercial property owners to disclose a property’s Energy Star™ score as part of any transaction. Stay ahead of the curve, and benchmark your building to see how it is performing relative to other similar buildings. Try out this BENCHMARKING TOOL.

If you provide some additional information about your building, the Partnership will develop a more detailed benchmarking report for you at NO COST.

Property owners are eligible to receive up to $250,000 in engineering services from one of the Partnership’s qualified independent engineering firms.

The final Savings Opportunity Assessment (SOA) report will include detailed transparent analysis of:

  1. How your building is performing relative to other similar properties

  2. All opportunities to save energy and water

  3. Savings and costs associated with each opportunity

  4. Utility rebates and Tax incentives

  5. Potential for on-site power generation, demand response, and electric vehicle charging (for qualifying properties)

  6. Off Balance Sheet Financing options

For more information visit the L.A. Better Building Challenge website.

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Everblues LEED Certification Courses


 If a person doesn’t already have experience on a LEED project, they must earn a Tier I Green Associate Credential before qualifying for a Tier II level specialization certification. This is true for whatever certified LEED instructor a student wishes to use.
 Interested in becoming LEED Certified? Everblue Training Institute is the largest USGBC educational provider in the world.
Getting Started with LEED Series

Page 1: Introduction (This Page)

Page 2: What is LEED?

Page 3: The USGBC and GBCI

Page 4: The LEED Rating Systems

Page 5: The LEED Credentialing Process

Page 6: LEED Green Associate Explained

Page 7: LEED AP Explained

Page 8: The Benefits of LEED

Getting started is easy even for professionals who want to demonstrate a green building expertise in non-technical fields of practice. For access to schedules for live courses, online instruction, live webinars, and practice exams, visit the Everblue site at .

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Digital Media Strategists for SoCal electrical contractors…. dba IPLUG MEDIA