Finding the best ways to fund your commercial energy project or upgrades
In this ever-changing world in which we live in, renewable and environmentally-friendly energy is becoming increasingly important. However, finding the funding to overhaul your business’s energy grid can seem daunting.
Business owners might think an energy system update is too expensive, but there are several ways to receive funding. Several options include little-to-no out-of-pocket costs.
If you want to make the leap into the 21st century and put a renewable energy-efficient system in place, you aren’t alone.Here are several different investment and rebate options to help fund your energy project.
Government Energy Funds
The U.S. government offers many grants for businesses and nonprofit organizations who are interested in energy efficiency and renewable energy.
The USDA Rural Development Office offers grants (up to 25% of total project costs) and loans (up to 75% of total project costs) that can be used for energy efficient and renewable energy projects. This grant is a great financing option for rural small businesses (50,000 people or less).
A third-party capital provider that specializes in financing energy efficient and renewable energy projects.
Terms are approximately 5-7 years with a fixed interest rate of 5-6%. This form of financing requires no money down, and it collateralizes the systems installed.
Bank Loans for Energy Projects
You can work with your bank and loan officer to negotiate loan terms, and financial analysis for your project.
Renewable energy projects can be somewhat creative with financing, from using existing equity in a building to collateralize the loan to utilizing a conventional commercial loan. There are several possibilities your company explore.
PACE Provides 100% funding for energy efficient and renewable energy improvements.
PACE funding is an off-balance sheet funding tool that adds an annual assessment to your property taxes and doesn’t utilize any of your existing lines of credit. PACE is designed to help businesses and property owners make improvements that result in positive annual cash-flows.
Local utilities offer loans to help your business make energy improvements to your facility. These are low interest, and terms vary based on specific projects. Contact your local city or utility provider to see if they offer any efficiency or renewable energy loans.
Energy Efficiency Tax Credits & Deductions
Many energy efficiencies and renewable energy improvements, such as solar (PV) panels, lighting, insulation, HVAC, and energy storage offer accelerated depreciation schedules for businesses.
The Solar ITC (Investment Tax Credit) offers a 30% tax credit for businesses, utility providers, and homeowners who interconnect solar on their property.
Energy performance contracts from EnergyLink
EnergyLink offers an energy financing option to customers which allows your company to install the project with no money down. A portion of your monthly savings will finance the project costs, and leave the customers with 5-20% monthly savings.
Energy Efficiency Rebates
Local utility providers offer cash rebates which subsidize costs for building automation systems, lighting retrofits, HVAC upgrades, solar panels, energy-efficient water heaters, and more. Rebates can help reduce system costs by 10-20%.
Rebates make energy projects much more affordable up front. EnergyLink’s team will work with your organization’s utility provider to facilitate applying for and receiving all renewable energy and energy efficiency rebates.
Currently, EnergyLink has experience working with the following utility providers: Columbia Water & Light, Boone Electric Cooperative, Xcel Energy, Louisville Gas & Electric, and several more.
Most states also offer state-specific rebates and incentive packages for businesses looking to install or upgrade energy efficent assets
Missouri Solar Rebate
Any commercial solar projects with the intent of installing solar panel arrays of up to 150 kW qualify for the Missouri Solar Rebate.
- The rebate will start at $0.50 per watt for systems that become operational from January 1, 2019 – June 30, 2019. Then, the rebate amount will drop to $0.25 per watt from June 30, 2019.
- If a project is incomplete, a rebate application has not been approved, or funds have run out during the time window for the $0.50 per watt rebate program, interested parties will still be eligible for the $0.25 program
- Rebates for the largest utility – Ameren Missouri – are capped at $5.6 million per year or $28 million over five years.
- Rebates for KCP&L and are capped at $1.6 million per year, or $8 million aggregate
Utility Scale Solar
Large electric utilities to invest in utility-scale solar facilities located in Missouri or adjacent states. These investments will be deemed prudent, and utilities are not required to obtain additional approval from the PSC.
- Utility corporations with more than 1 million customers will not be required to pay rebates that exceed $5.6 million per year or $28 million in the total from 2019-2023.
- Utilities with 200,000 to 1 million customers will not be required to pay rebates exceeding $1.6 million per year, or $8 million from 2019-2023.
- Utilities with 200,000 or fewer customers will not be required to pay solar rebates that are above $1.4 million per year, or $7 million in total.
Benefits of the Missouri Solar Rebate
- Decreases cost of the solar project significantly.
- Promotes positive sustainability efforts.
- Makes it easier for your organization to put less stress on the electric grid, positively impacting your community.
Kansas City Power & Light Rebate
To promote sustainable business practices, Kansas City Power & Light offers several rebate programs that help Missouri business customers complete energy efficient projects. Of particular note are the solar rebates. Read more about those below.
Kansas City Solar Rebate
KCP&L’s Solar Power Rebate encourages the use of solar energy by offering companies who install solar panels a $0.50 per watt rebate until June 30th, 2019. After this period, the rebate amount will lower to $0.50 per watt.
The payment of solar rebates is subject to a one-time program limit— this means the amount that KCP&L spends on rebates paid to solar customers cannot exceed $50 million in the KCP&L Great Missouri are or $36.5 million in the KCP&L Missouri area.
KCP&L standard rebates cover a wide range of equipment and facility upgrades, such as:
- Energy-efficient LED lighting & lighting controls
- Refrigeration systems & food service equipment
- Variable speed drive air compressors for manufacturing
Pre-approval is not necessary for KCP&L’s Standard Rebates. Your company can submit a Standard Application with supporting documentation when the project is complete, and the installed equipment is qualified for a rebate. It typically takes ten days for review and payment of the application.
Customer Energy Rebates
KCP&L offers customer rebates to help business customers implement energy-saving solutions that meet the specific needs of every business. The earlier your business brings KCP&L into the project, the more your business can save with rebates.
Some examples of custom projects are:
- New construction
- Chiller systems
- Heating & cooling systems
- Compressed air upgrades
- Building controls
- Energy management systems
- Refrigeration projects
- Variable speed drives and pumps
Custom incentives pay a maximum of $0.40/kWh saved and a minimum of $0.06/kWh saved. You calculate the incentive at the $550/coincident peak kW saved and capped at 75% of the incremental project costs.
Custom rebates require pre-approval before the purchase and installation of equipment/materials. To learn more about the preapproval process click here.
Xcel Energy offers rebate programs for Colorado commercial and industrial customers for various energy efficiency technologies. Xcel will cover part of the cost of the assessment in addition to the equipment and installation rebates.
Also, Xcel Energy can connect businesses to third-party lending institutions for financing purposes.
Recommissioning: 75% of cost, up to $25,000
Whole Building/Customer Efficiency Rebates: $400/kW+$0.04/kWh
The Xcel Energy Rebate covers project installations in the following savings categories:
- Solar (RECs)
- Controls, sensors
- Air conditioners
- Energy management
- LED lighting
Colorado electric business customers can earn rebates of $3 to $75 per lamp or fixture when upgrading from T12 fluorescent systems to LEDs. Under Xcel Energy’s lighting rebate program, there are seven ways a business can lower lighting costs and earn valuable rebates:
- Lighting retrofit rebates that will offset the cost of installing new and more efficient lighting.
- New construction lighting rebates for renovated facilities with energy efficient equipment.
- Business LED instant rebate is available on ENERGY STAR-qualified, screw-in LED bulbs and LED retrofit fixture screw-in downlights that are purchased from participating distributors.
- Advanced lighting controls rebates offset the costs of new, efficient and more advanced lighting.
- Custom efficiency lighting rebates are available for energy savings lighting projects that aren’t included in the prescriptive rebate program. This includes unique equipment tailored to a specific facility.
- Small business lighting is available for existing small and mid-sized facilities that have a peak demand of 400kW or less.
These lighting rebates can cut costs and monthly energy bills, shortening payback periods for LED lighting installation significantly.
Xcel Cooling Efficiency Rebates
Xcel Energy offers a $400/kW saved fixed rebates for purchasing qualifying energy-efficient cooling equipment, such as chillers, direct evaporative pre-coolers, and electronically commutated motors. Cooling equipment that is not eligible for a prescriptive rebate may still qualify for a customer rebate.
Xcel Heating Efficiency Rebates
A Colorado business natural gas customer can earn 50% bonus rebates on qualifying gas heating efficiency upgrades. The limit on the gas rebates has increased from 60% to 75% of total equipment and labor costs, adding more savings.
Xcel Energy offers a solar rewards program for companies who have installed solar. This program purchases RECs (Renewable Energy Credits) from the business at a price of around $0.0425 per kW for solar projects between 25.01 kW and 500 kW.
This program purchases each kWh produced from the array for the next 20 years.
Ameren Energy Efficiency Rebate Incentives
Commercial and Industrial Ameren customers are eligible for cash incentives through the BizSavers Program. There are also several other notable incentives offered for solar and energy efficiency which are included below.
Ameren Solar Rebate
With Missouri Senate Bill 564 passing in June 2018, there will be a rebate offered for solar interconnected into the grid, which started on January 1, 2019. Rebates will be paid out at $0.50 per watt before June 30th, 2019.
On July 1, rebates will be paid out at $0.25 per watt until the $8 million of allotted funds are depleted. Once funds for the $0.50 per watt program are gone, the $0.25 per watt program will begin.
This Bizsavers Program reduces the costs of energy efficiency improvements by offering several cash incentives. It offers a variety of incentive programs to fit different project types, sizes, and budgets.
Who is Eligible for the Ameren BizSavers Program?
There are various incentives relating to energy-efficient services and equipment for Ameren Missouri electric business customers. Some of the businesses Ameren Missouri has given cash incentives to include nonprofit organizations. Schools, government institutions, restaurants, retail stores, gas stations, etc.
Standard incentives are paid on a per-unit-installed basis and are available for qualified improvements. Pre-approval for projects with standard measures is not required unless the incentive is expected to be more than $10,000.
Eligibility for a standard incentive requires customers to install measures achieving a minimum total incentive of $150 per application. The Standard Incentives Application can be downloaded here.
If your business’ energy efficiency improvement is not on the standard incentives list, you could be eligible for a custom incentive.
Custom incentives are calculated based on the projected annual energy reduction. A pre-approval incentive is required for these incentives before equipment purchase or installation.
New Construction Incentive
Ameren offers incentives for ground-up construction, additions or expansions, and complete commercial building restorations. It encourages building owners to install systems with higher energy efficiency than the standard of planned systems.
New construction incentives must be applied for and approved prior to construction and purchase and installation of the equipment. The New Construction Incentive Application can be downloaded here.
Whole Building Performance/Retro-Commissioning Incentives (RCx)
Retro-Commissioning improves a building’s operations and maintenance procedures, which helps enhance overall building performance.
Your facility must have more than 100,000 sq. ft. of conditioned space or systems that exhibit higher average energy use intensity to be eligible for Ameren’s program.
Small Business Direct Install
Ameren Missouri offers cash incentives for small business customers through the Small Business Direct Install Program.
Energy efficient lighting upgrades for small business customers are available through the Small Business Direct Install Program (SBDI). These projects can include:
- High-efficiency lighting upgrades
- LED exit signs
- Occupancy sensors
- Lighting controls
Start Investing in Renewable Energy
Start with a free consultation to find out how EnergyLink can help with project funding, rebates, tax incentives, and using energy to generate a cash-flow
With us as your trusted energy investment company, you can expect an effortless surplus cash-flow.
As an energy service company, EnergyLink engineers, procures, and constructs energy efficient and renewable energy projects.
Consistently focusing on new product innovations enables our team to deliver the most effective energy solutions to our customers.
Our goal is to find appropriate energy solutions that will maximize utility savings and have a lasting impact on the environment.