Industrial
New Financing Option For Industrial Property Owners
Interested in upgrading your industrial facilities with energy/water efficiency and distributed generation technologies but lack the needed capital?
The Texas PACE program (Property Assessed Clean Energy), enables industrial site owners to obtain affordable, long-term financing covering up to 100 percent of the cost for energy efficiency, water conservation, and on site generation technologies. PACE secures private financing for a term as long as the projected useful life of the improvements, resulting in utility cost savings that exceed the amount of the repayment.
Typical Examples of Qualified Improvements
- High efficiency chillers, boilers, and furnaces
- Combustion and burner upgrades
- Heat recovery equipment
- Mechanical system modernization
- Industrial energy system sensors and controls
- Systems to capture, treat and use other on-site sources of water (condensate, rainwater, reverse osmosis reject water, etc.)
- High efficiency lighting
- Water conservation equipment
- Building enclosure/envelope improvements
- On site generation (resiliency benefits)
- Fuel switching
- Wastewater onsite reuse systems
Case Studies
R.J. Liebe Athletic Lettering Company, Navarro County, Texas
R.J. Liebe Athletic Lettering Company, a sewing manufacturing plant in southeast Corsicana, used Navarro County’s PACE program to finance $324,559 in high-efficiency retrofits for its 36,000 square foot building.
HELLER MACHINE TOOLS, TROY MI
Heller Machine Tools, a world-leading manufacturer producing state-of-the-art machine tools and production systems for metal cutting processes, used PACE to finance $978,607 in deep energy retrofits for its 100,000 sq ft production facility. Energy consumption and related costs were reduced by 23% – a savings of $1.6 million over 15 years.
Measures included: • Networked building controls • Partial roof replacement • Compressed air upgrades • Lighting replacement • Server room cooling • HVAC
PACIFIC ETHANOL, MADERA, CA
Pacific Ethanol, Inc. (NASDAQ:PEIX), a leading US producer and marketer of low-carbon renewable fuels, used $10 million in PACE funding to purchase and install a 5 MW photovoltaic (PV) power system at its ethanol plant. This project is the first ever commercial solar electricity system at a US ethanol plant and the largest solar PV system to be funded through PACE.
The PACE project will save the facility more than $1 million annually and is cash flow positive from year one. The system also qualifies for the Energy Investment Tax Credit, displaces more than 30% of the grid electricity currently used, and drives premium pricing at the plant due to improvements in its carbon-intensity core.
Cambridge Engineering, Chesterfield MO
Cambridge Engineering, Inc., a manufacturer of energy efficiency heating and ventilation technology used PACE to upgrade its facility. A $610,500 comprehensive retrofit resulted in a 30% energy savings.
Measures included: • Lighting • Air volume distribution systems • Roof replacement • Air conditioning upgrade
The Financial Impact of Industrial PACE
This example compares self-funding and conventional funding with PACE financing:
- Industrial Facility
- Project involves a $2.5M 1.3MW CHP system
- Annual net savings of $473,000 (5.3 yrs simple payback)
- The project does not pass the company’s hurdle rate for investment in energy efficiency (i.e. the ROI is probably not high enough)
- Conventional Funding for 5 years at 4.0% (20% down payment)
- PACE funding available for 20 years at 6.0%.
- Energy prices held constant. NPV discount rate at 8%.
Compare financing options with the financial comparison calculator.
Your PACE Loan Assessment Can Include
- Cost of materials and labor necessary for the installation of a qualified improvement
- Permit fees
- Inspection fees
- Lender fees
- Program application and administrative fees
- Project development and engineering fees
- Independent third party reviewer audit fees, including verification fees
- Any other fees or costs that may be incurred by the property owner incidental to the installation, modification or improvement
- Legal, consulting and other fees on an actual cost basis
- Changes to the existing property incidental to the installation