ERG is available to assist with the financial aspects of your project, whether that is utility incentives and rebates, or securing 3rd party lending.
There is no reason for a lack of capital to hinder your efforts, as energy efficiency projects pay for themselves in lowered energy costs. ERG has relationships with lenders who are eager to lend money to energy efficiency projects. PACE is one well-known option, but there are other sources that have lower interest rates. One very-low-interest loan option which ERG promotes to Missouri-based clients comes from the Missouri Department of Natural Resources Division of Energy.
Missouri State Energy Loan Program
The Missouri Department of Natural Resources’ State Revolving Energy Loan Program Announcement can be seen at the following link: https://energy.mo.gov/energy/communities/assistance-programs/energy-loan-program. The program started in 1989 and is one of the best opportunities around for funding energy projects. The following are loan program highlights:
- Application deadlines come up in a semi-annual cycle.
- Loans are available only to institutions of higher education, public schools (K-12), hospitals, and local govt. (including districts and facilities).
- Loan interest rate is 2-4% annually (recently 2.75%).
- There is a one-time 1% fee for setting the loan up and its administration.
- Minimum loan is $10,000 and maximum is $500,000.
- Qualifying projects will likely receive 100% financing, eliminating a capital expenditure request.
- These loans are effectively secured by the energy savings, so they are considered off balance sheet.
- Loan term is typically 10 years or less.
- Projects with faster paybacks receive higher priority in the selection process.
- Implementation time frame is typically 18 months .
Utility Rebates and Incentives
ERG is currently (2020) the top incentive earner for the year with Ameren Missouri.
- Ameren Missouri/Illinois and Spire Energy have either incentive or rebate programs to assist customs that try to invest in energy efficiency improvements for their buildings.
- The Ameren program operates in three-year cycles. There have usually been three basic programs:
- Retro Commissioning (RCx), which is defined as reprogramming existing control systems for better operating efficiency and re-calibrating/replacing sensors that are in error; RCx is further defined in the industry as having a < 2-year payback (50+% ROI).
- Standard equipment programs, which deal with lighting and typical motor upgrades; and,
- Custom programs, which typically deal with building specific heating and cooling opportunities.
- Standard and Custom Programs are those efforts that have longer paybacks, but are generally in the less than 8 year payback range.
Both Ameren and Spire have aggressive programs that will reimburse a substantial part of the costs. A recent ERG RCx project for the Old Post Office Building (9th and Olive) was 100% reimbursed by the incentives Ameren paid for the energy that was saved.
Together
Together, available energy efficiency lending and the Utility energy programs make it very cost effective to implement energy efficiency solutions for buildings. For instance, a ten-year loan on a 7.0-year payback produces an instant cash-flow positive scenario. The energy savings cover more than the needed principal and interest payments. The probable amount of Ameren incentives and Spire rebates available to the project will be known in advance. Incentive offers will be made when the utility receives and reviews the energy study. At that time, the effective payback is likely to be significantly less than that submitted in the loan application.
Additional benefits typically include:
- Improved occupant comfort;
- Increased equipment life; and,
- Lower maintenance costs.
Energy Resources Group, Inc. (ERG) is a qualified Trade Ally in both the Ameren and Spire programs. ERG is willing to work with clients to submit State Loan Applications on their behalf with the expectation that this upfront work can be compensated once a loan is approved.
