Property Assessed Clean Energy (PACE) is a new way to finance energy efficiency and renewable energy upgrades to the buildings of commercial property owners in cities and counties that allow it. Energy-saving measures pursued by the owners receive project financing and are repaid as a separate item on their property tax assessment for a set period. PACE eliminates the burden of upfront costs by providing low-cost, long-term financing.
An energy audit performed by Certified Energy Manager (CEM) Richard Otten outlined several projects that would result in energy savings for the business. One of the more significant undertakings involved replacing all the outdoor lighting with LEDfixtures. This included the canopy, perimeter, wall, and reader board lighting. Total estimated costs for these improvements were $73,942.
According to the energy audit, these improvements would result in more than $14,000 in annual energy savings. The first few months following project completion showed actual energy savings of approximately $2,000 per month. The savings in energy will more than pay for the annual assessment payment of $9,044. It is believed the lifespan of the LED lights installed is approximately 12.45 years.
In addition to PACE financing, Blue Line also applied and was approved for a USDA REAP grant. They also submitted and received utility rebates from Worthington Public Utilities in the amount of $12,571. With these successes under their belts, the Potters are now considering interior improvements, as well.
Project Snapshot:
- Location: Blue Line Travel Center in Worthington, MN – Nobles County
- Description: Updated exterior lighting to LEDs
- Useful Life: 12.45 years
- PACE Loan Term: 9 years
- Project Costs: $73,942
- Annual Energy Savings: 209,520 kWh
- Savings Per Year: $14,112 for 12.45 years
- Annual Payments: $9,044 for 9 years
- Annual Net Savings: $5,068 for 9 years
- Total Net Savings: $85,253* over 12.45 years
*Total Net Savings is calculated by multiplying the useful life of the improvement by the estimated annual savings, then subtracting the cost for materials, installation, and interest over the term of the assessment.
