1. Energy Project Financing Program Overview
NH C-PACE
Energy Project Financing Program Overview
November 19, 2016
Scott Maslansky
C-PACE Program Manager
The Jordan Institute

2. 2013 Strategic Plan & Reorganization
Who Are We?
For-profit company, majority owned by The Jordan Institute
Scale-up number of energy-efficient buildings
Expand available EE services - projects in the field including energy-centric construction management
Non-Profit organization
Reduce energy use in buildings
Public policy and program design
Founded in 1995
2013 Strategic Plan & Reorganization
2014+ Policy and Program Design
2016 C-PACE Program Launch

3. Why C-PACE?
Goal: Expand the number and scope of energy efficiency and renewable energy projects in New Hampshire.
Objective: Expand energy efficiency and renewable energy financing tools - especially to meet some of these needs…
Extend repayment terms
Reduce risk for investors/lenders
Overcome the split incentive
Assure project quality / energy savings

4. Is My Project Cost Effective?
How do I measure “effective”?
Financial
Simple Payback
Return on Investment
Internal Rate of Return
Net Present Value
Cash Flow Positive?
Comfort
Tenant/employee complaints
Improved productivity
Necessity
Equipment at end of life
Code issues

5. Payback Simple payback
Total Cost _________________________________ = Payback in years
Annual Savings
Does not account for savings beyond payback period.
Simple payback is most commonly used but does not account for the value of money over time. If you were to invest the same amount of money in another investment (i.e. stock market) how does it compare and for how long?
Example:
Many businesses might say that they are not interested in a simple payback of over 5 years.

6. Financials Example Weatherization Project Cost: $10,000
Annual Savings: $1,500
Simple Payback: 6.7yrs.
Return on Investment (ROI): 15%
Life of Measure: 20 years
Discount Rate: 6%
Net Present Value (NPV): $7,205
Would you invest in a stock with a secure rate of return of 10% over 20 years?
Net Present Value: A method of calculating your return on investment, or ROI, for a project by looking at all of the money you expect to make from the investment and translating those returns into today’s dollars. It assumes a specific “discount rate” or interest rate.

7. Does Comfort = Savings? Employee Productivity
Too hot/cold  less focus
Glare & light levels  eye strain, headaches, mistakes
High CO2 levels  fatigue
Costs of Energy vs. Personnel:
$40,000 average salary and benefits per person.
200 square feet per person.
$200 per square foot in payroll vs. $2 per square foot in utilities.
Payroll is 100 times as expensive as energy per square foot!
Even a 1% increase in productivity can have significant $ impact!
Source: sellingenergy.com

8. C-PACE Definition
C-PACE Property Assessed Clean Energy financing for Commercial buildings
Allows building owners to tie financing for energy efficiency and renewable energy improvements to a property through a Special Assessment lien.

9. C-PACE Definition NH Statute: RSA 53-F Rewritten for 3rd time in 2015;
Unanimous support -- NH House and Senate
Enabling legislation
Municipalities voluntarily adopt RSA 53-F to set up C-PACE Special Assessment Clean Energy Districts. Jordan Institute and partners launched the NH C-PACE program in 2016

10. Why was C-PACE created?
To overcome the significant obstacles for commercial building owners to complete Energy Efficiency and Renewable Energy projects – especially comprehensive projects
By using the municipal tax structure, building owners can overcome these obstacles and benefit from high-quality, comprehensive, and cash-positive energy projects

11. Why was C-PACE created? Common Situations Results 7 -
Commercial Building owners flip
buildings every 5
10 yrs.
Owners rarely get full
benefit of long
term cost savings - –
Commercial
loans = 5
7 yr. terms
Focus on “low
hanging fruit”
project
paybacks of 2
7 yrs.
Loans repaid
from capital budgets
Limited funds for comprehensive
projects
Projects deferred until emergency
Limited time/money to consider options
Who pays for utilities?
Tenant not invested in upgrades for
building they don’t own;
owner not
invested if tenant pays bills

12. C-PACE Benefits: Building Owner
Tied to the property, not the property owner
Non-accelerating payments upon sale
Next owner receives the same benefits and payment obligations – “Pay for the energy efficiency you use”
No down payment required
Cash Flow Positive, Savings to Investment Ratio >1
Loan Term up to 30 years
May be treated as operating expense - instead of debt
May address “Split incentive” - owner can “share” loan repayment with tenants (ie triple net lease)
Encourages comprehensive projects, not just fast ROI
Financial & energy project vetting/oversight/verification - improves trust

13. C-PACE Benefits: Municipality
Improve building stock
Attract/retain businesses
Fill rentable space
Increase value of commercial buildings
Budget-neutral economic development initiative
No public or ratepayer funding
Ties into goals and initiatives in the Master Plan
Stimulates local jobs by expanding markets for EE/RE contractors
Vast majority of efforts handled by others
Nominal payment to Municipality to cover costs as conduit for tax/repayment

14. C-PACE Building Types Can Include:
Office buildings
Hotels & convention centers
Apartment buildings (5+ Units)*
Manufacturing facilities
Heated warehouses
Agricultural buildings
Retail: grocery, malls, big box, Mom & Pop
Health clubs & athletic facilities
Private Schools
Non-profits
NO PUBLICLY OWNED BUILDINGS
NO RESIDENTIAL (1-4 units)
NO NEW CONSTRUCTION
* Some Restrictions Apply

15. C-PACE Projects Can Include:
Comprehensive projects or individual energy measures
Airsealing & Insulation
HVAC
Biomass Heat — pellets or chips
Ground-Source and Air-Source Heat Pumps
Controls and heat distribution
Lighting
Solar – electric, hot water, hot air
Combined heat and power
non-energy project work that is connected to the energy project, as long as the SIR>1 (ie roof replacement with solar project)
Projects > $250K

16. The National C-PACE Scene
32 states have adopted PACE financing tool
Courtesy PACENation
To date, 790 Commercial buildings upgraded, $280M, 3,300 jobs

17. Current Obstacles No completed projects in NH to show precedent
Need examples to get range of rates/terms
Lien position has created significant uncertainty in who will invest
NH tax law significantly different from other C-PACE states
Existing tax software varies among municipalities

18. NH C-PACE Adoption Status
Participating Municipalities:
Hanover – 2 prospects in early stages
In discussion with:
Dover
Concord
Lebanon
Keene
Portsmouth
Durham

19. Next Steps for Municipal Adoption
Support from Municipal Energy Committee
Work with Municipal Staff
Tax software
Implementation/ enforcement concerns
Present to City/Town Council or or C-PACE added to Town Meeting Warrant
Review template resolution, agreements, lien documents
C-PACE adoption! at Town Meeting or City/Town Council

20. Scott Maslansky, C-PACE Program Manager
Thank you!
Scott Maslansky, C-PACE Program Manager
The Jordan Institute
, x202
6 Dixon Avenue, Suite 201
Concord, NH 03301

22. NH C-PACE Program Team
Jordan Institute, Inc. – Statewide Administrator, Day to Day Coordination, Visibility, Education, Project Management
Sustainable Real Estate Solutions, Inc. – Energy Project Origination/Development, SIR Analysis, Contractor Training.
Resilient Buildings Group, Inc. – Energy Project Vetting, Commissioning, M+V
NH Community Development Finance Authority – Financial Vetting, C-PACE Loan Repayment Coordination, Project Warehousing