Greenbuild 2011: Finally, a Private Funding Solution for Green Buildings
With the down economy, it's been a rough year for green buildings and renewable energy projects. But as I got off the plane for this year's Greenbuild in Toronto, I saw an advertisement that inspired me with one word: potential.
Over the coming days I will be relaying stories about potential in the green building world. Take, for example, the PACE programs that are moving forward in Sacramento and Miami-Dade. While I was at Greenbuild, I had the opportunity to discuss these exciting programs with Patrick Grogan and Megan McCarthy of Energi.
PACE stands for property assessed clean energy. PACE programs provide much needed third party financing to support energy efficiency retrofits and renewable energy installations. If these programs work properly, then private developers use the financing to retrofit buildings and reap energy savings while paying back the loans.
PACE programs sound great in principle but many private companies have remained on the sidelines.
Enter Sir Richard Branson and his Carbon War Room. The Carbon War Room brought together a number of companies, incuding Lockheed Martin, Barclay, and Ygrene, to form PACE programs in Sacramento and Miami Dade. Owners of commercial property in these locations can soon sign up for these PACE programs in order to retrofit their buildings.
But the programs would not have launch if the issue of risk allocation was not dealt with. What happens if the anticipated energy savings do not materialize? Energi developed a solution to this problem. Energi worked with insurers and reinsurers to deliver an insurance program that pays the owner if energy savings do not materialize.
We will be hearing a lot more about PACE programs for commercial buildings in the coming years for a number of reasons. Government officials will be able to tout the development of green jobs. The programs rely strictly on private capital and not government funding. And building owners and tenants save money.
What do you think of the potential of this program?