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Financing energy efficiency improvements and renewable energy systems


Energy savings opportunity gap

The inefficiency of a building's envelope and HVAC systems may cause the owner or tenant to spend far more on utility bills and maintenance than necessary. If an existing building does not optimally conserve energy, there is an energy savings opportunity gap to finance improvements. The key is the existing monthly budget to operate the building's energy systems and potential energy savings. Money is being wasted if the monthly payment needed to finance upgraded equipment is less than the amount monthly utility and maintenance bills will be reduced with more efficient equipment. Similarly, an energy savings opportunity gap exists if a planned building can be made more efficient within an existing construction budget by downsizing equipment in tandem with greater efficiency in the building envelope design, HVAC systems and controls.

The energy savings opportunity gap can help green your facility, as well. Buildings that are energy hogs often experience indoor environmental quality issues as well. Problems with stuffiness, temperature variability, bad lighting, toner fumes, and mold or condensation are just a few of the health and productivity issues that can be addressed in tandem with energy usage by upgrading system controls, lighting, office equipment, and ventilation systems.

Resist the temptation to opt only for low hanging fruit such as lighting upgrades because they yield a high rate of return or quick payback. Bundling a number of improvements will allow those with quick payback to offset more expensive upgrades that can dramatically improve the performance and comfort of the building.

Delay is expensive. Money is wasted every day that inefficient energy consumption continues.

Energy use benchmarking and disclosure

When the energy use of buildings is rated and disclosed, it encourages owners to make buildings more efficient. Energy disclosure has been touted as “The New Frontier” for American jobs that cannot be outsourced.

Minnesota B3 Benchmarking
B3 Benchmarking is a building energy management system provided free-of-charge by the State of Minnesota for public buildings including Minnesota state agencies, local governments, and public K-12 districts and post-secondary education systems. B3 benchmarks buildings against the current Minnesota state energy code and shows anticipated savings based on improvements that would bring the building to code-level performance. The database recently added high-level reporting and graphing tools, baseline energy use tracking, integration with ENERGY STAR, peer comparisons, and other features. All Minnesota public buildings are required to have energy use data entered in the B3 database, and state energy financing programs typically require that B3 data be kept up-to-date.

Minnesota GreenCorps Energy Conservation Program
Minnesota GreenCorps is an AmeriCorps program created and operated by the MPCA to preserve and protect Minnesota’s environment while training a new generation of environmental professionals. Now in its fourth year, the program places Energy Conservation service members (one of four GreenCorps topic areas) in state agency and local government host sites around the state to benchmark building/fleet energy use and implement energy/water efficiency projects. Members provide host sites with valuable “staff time” to help track energy use in the B3 Benchmarking Database and implement energy reduction projects more quickly. The host site application process opens annually in late winter/early spring for 11-month service terms commencing the following September.

Minnesota GreenStep Cities Buildings Best Practices
MN GreenStep Cities is a voluntary challenge, assistance, and recognition program managed by a public-private partnership and administered by the MPCA. Best practice actions challenge cities to benchmark their buildings on B3, prioritize buildings for upgrades based on the benchmark, and baseline their energy usage to maintain or improve operational savings. Accomplishments are posted on-line.

Energy Star for GovernmentEnergy Star
According to U.S. EPA's Energy Star program, nearly one-third of the energy used to run typical government buildings goes to waste. This site explains how to be strategic about energy management and provides tools to improve building performance.


Energy project financing

Guaranteed Energy Savings Program (GESP)
The Minnesota Department of Commerce – Division of Energy Resources (DER) GESP program, piloted in 2012, takes the risk out of performance contracting for local governmental units. DER provides a master contract, list of pre-qualified energy service companies (ESCO), pricing and subcontracting guidelines, construction project management oversight, verification and monitoring requirements, and technical assistance. 

Database of State Incentives for Renewable Energy (DSIRE)
This comprehensive database is an excellent source of information about Minnesota-specific and national financial incentives including grants, loans, sales and property tax incentives, local and utility rebates, property assessed financing, and performance-based incentives. The site also links to rules, regulations, and policies.dsire logo

Property Assessed Clean Energy (PACE)
PACE allows property owners to borrow money from newly established municipal financing districts to finance energy retrofits (efficiency and renewable energy measures) and repay the loan through an annual special tax on their property bill. This FAQ web page from the MN Department of Commerce addresses Minnesota legislation and national developments.

Minnesota Conservation Improvement Program

The Minnesota Conservation Improvement Program (CIP), Administered by the Minnesota Department of Commerce – Division of Energy Resources, requires utilities to invest 1.5 percent of their annual income in conservation programs. Municipal and cooperative utilities are no longer allowed to concentrate their investments in load-management activities, so new conservation programs are becoming available to save energy and money for utility customers.

An example of a CIP program available to Xcel Energy customers is the utility’s Find a Rebate webpage, which contains a wide variety of financial assistance opportunities including:

  • Business new construction design assistance
  • Lighting efficiency rebates
  • Recommissioning studies
  • HVAC equipment rebates
  • Energy Star Homes consultation, training and diagnostics testing for builders and more.

Technical resources for energy efficiency

Energy Star Building Upgrade Manual
This strategic guide provides help planning and implementing profitable energy-saving building upgrades. The manual includes sections on project management including investment analysis and financing, technical issues, and unique facility strategies.

Federal Energy Management Program (FEMP)
FEMP provides downloadable fact sheets for implementation of low-cost operations and maintenance (O&M) changes to improve energy and water efficiency including lighting, water, cooling, heating, and O&M tips.

Last modified on January 10, 2013 14:53