picking up the pace the better buildings case competition u.s. department of energy market...
Post on 03-Jan-2016
215 Views
Preview:
TRANSCRIPT
Picking Up the PACEThe Better Buildings Case
Competition U.S. Department of Energy
Market Efficiency Team-Presentation
Team Members:Bruce Kaufman, Agustina Sclarandi, Gene Settoon,
Lauren Anderson*, Daniel Lutkus*
*Unable to attend
Overview
• Five-Tiered Rollout• Staffing and Administration
Program Structure and Operations
• Market Education• Website
Marketing Strategy
• Real Estate Investors
Financial Considerations
Program Structure and Operations: Tiered Approach
• Controlled & targeted growth• Program initiated industry led• Largest/easiest more challenging buildings• Apply lessons learned to subsequent tiers• Case studies prove uptake projections
Tier 1• Large/Old
Class A
Tier 2• Large/New
Class A• Small Class A
Tier 3• Class B• Hospitality
Tier 4• Industrial• Class C
Tier 5• Multifamily
Housing
Uptake Projections
Program Structure and Operations: Staffing
Staffing• Major cities only (75% population)• One staff member per city (focus & replication)
Intrastate Coordination• State mandates tiers & finance• Cities execute program within existing system
Administration• PACE training for contractors (tiered approach,
fast-track permitting)• Targeted marketing
Marketing Strategy: Targeting Building Owners
Public Disclosure of Energy Use• Mandate that buildings submit quarterly energy usage data &
energy efficiency certifications concurrent with tier rollout timeline
• PACE website compares energy usage & certification by size, occupants & industry
• Driver of market education & adoption Website Information Segment Targeting• Building Owners → Building Owners & Managers Association
i. Compare energy usage & LEED certification ii. Information on State Commercial PACE program
• Rentersi. Information on potential utility expenditures across
renting market – inform leasing decision
Financial Considerations: Types of Real Estate Investors and Lien ConsentReal Estate Investment Trusts
CORE
Best targets for the initial phase of the program because of their low Debt Service/NOI, usually interested in efficiency technology
CORE +
Value Added
Opportunistic Funds
Could apply the earn – out scheme so as to avoid Lenders’ concerns
Lien Issues
- Tiered approach - Advertise the savings of the PACE projects - Ensure that the largest & most impactful projects are done first
Market Efficiency Team
Thank you for your time!
Questions?
Team Market Efficiency
Appendices
Uptake Projections
Tiered Approach Assumptions Summary
Appendix A: Key AssumptionsThe following assumptions were used to generate data in Figure 1 & 2. Assumption 1: PACE Investment ($) / Building Area (sqft) = $3.50, which was the lowest value of 20 different cases that the team evaluated. Thus, projections shown below are conservative.Assumption 2: 66% of buildings built before the year 2000. Based on data from Chicago’s 73 tallest buildings.Assumption 3: 50% of building larger than average size. Based on assumption of normal distribution.Assumption 4: Participation rates for different building classes
Class ALarge/Old Class A Office: 16.8%. Based on uptake rates from Retrofit Chicago Initiative.Large/New Class A Office: 1.2%. Based on uptake rates from Retrofit Chicago Initiative.No difference in uptake rates between large & small buildings. Based on equal distribution between large & small buildings in cities were size restrictions don’t exists.
Class B: Assume 50% of Class A uptake (less demand than Class A, but still energy savings)Class C: Assume 20% of Class A uptake (less demand than Class A & B, but still energy savings)Hospitality: Assume 75% of Class A uptake (More demand than Class B because of client pressure, as demonstrated by Retrofit Chicago)MFH: Assume 50% of Class A uptake (same uptake as Class B)Industrial: Assume 50% of Class A uptake (same uptake as Class B)
Note: Projections assume that PACE funding at each tier is limited to the building type in that tier only, & doesn’t include building types from earlier tiers. Thus, projections are conservative, as some Class A buildings are expected to sign up in later tiers, for instance.
Intrastate Coordination Matrix
Program Components PolicyOwnership
AdministrationOwnership
Reason
Outreach and marketing City City City knows building landscape better than State
Application process City City City application processes already established
Property owner and project eligibility
State City Must have state-wide synchronization for replicability
Project size limits State City Must have state-wide synchronization for replicability
Credit underwriting State City Must have state-wide synchronization to reduce risk
Loan terms and conditions State City Must have state-wide synchronization to reduce risk
Ongoing admin. structure City City Cities better positioned to meet changes over time
Program Website Overview
$1,680,000
$168,000 $250,000
$1,102,000
Budget for Long-term Operations - $3.2M
Salaries & Benefits Overhead Website & Advertisement Misc
Program Budget
top related