By now, most developers and building owners have heard the term LEED, a green building certification program, and know that it’s good for the environment to be as energy-efficient as possible. But how to incorporate green practices is a little trickier.
Commercial real estate company CBRE has taken the green initiative even further with its “Business of Green” program. The company incorporates sustainability language in its leases and works with clients and occupants on green practices.
Energy-efficient buildings command higher rental rates and occupancy rates, said Doug Webster, senior associate of CBRE’s global energy and sustainability practice group. “But it’s also a paradigm shift,” he said – building owners and developers must be willing to wait a little longer for their return on investment.
Webster (below right) is an avid advocate for green business practices. In addition to his role at CBRE, he is chairman of the Upstate Alliance Energy task force, and the City of Greenville’s Green Ribbon Advisory Committee, and is also on the board of directors for the South Carolina Clean Energy Business Alliance.
“Developers are now understanding LEED,” said Webster, and Greenville is slowly incorporating more energy efficiencies every day. For example, the Harper Corporation building has solar panels on the roof, electric charging stations are in most of the city’s garages and city streetlights have been replaced with LED bulbs. “Sensible sustainability is driven by the economics,” he said.
A proposed bill in the works would help even more, offering developers and building owners another financing tool.
Commercial PACE programs
- May be used by local governments to finance energy efficiency and renewable energy improvements.
- Local governments finance up-front costs, and property owners repay the costs as a line item on property tax bills.
- State legislative authority must exist and local governments must set up energy financing districts.
Source: U.S. Department of Energy
The program is called CPACE, Commercial Property Assessed Clean Energy, and would allow loans for energy efficiency upgrades or renewable energy installations for buildings, said James Poch, executive director of the South Carolina Clean Energy Business Alliance.
If passed, CPACE would allow municipalities to create clean energy financing districts in cities across South Carolina. Loans to finance the energy improvements would be a lien on the property and be repaid through an assessment on a property tax bill through the county government. The lien would remain with the commercial property even if the building were sold.
Energy improvements or efficiencies would need to be qualified but could include solar panels for electricity generation, energy-efficient windows or insulation upgrades.
The goal is that the money in energy savings is greater than the loan payment, making it a win-win for everyone, said Poch. And, with the loan being attached to the property and not the company, it reduces the risk and makes the program attractive to small and medium businesses that may not have the cash flow that a larger company has.
The program is already available in 31 other states and would be voluntary both with municipalities that want to offer the program and private lenders. Poch said the bill is in progress and expects it to hit the legislature this year.
