Default Title How to improve your building with other people’s money

How to improve your building with other people’s money

Did you know that you can improve your own building’s energy efficiency using other people’s money?

The secret lies in coming up with a payment plan that achieves the following:
1. Building owners pay for the energy upgrades up front.
2. Tenants pay it back over time.
3. Eventually, the upgrades will pay for themselves.

It’s worth repeating: the energy efficiency upgrades will pay for themselves.

The problem with traditional leases

At Bay Efficiency, we often see building owners struggling to perform energy efficiency updates because of the way their leases are constructed.

In a gross lease, building owners pay for everything (including energy and maintenance costs). In a net lease, tenants will often be on the hook for paying their own energy.

An owner may hire a third-party certified energy auditor to do an energy analysis of the building. Even if there are lots of good ideas that come out of that audit, the projects often aren’t acted on it — because of the way the lease is written.

Building owners will say, “The tenants pay the utility bills. If I pay for a project the tenant will get all of the benefits.”

Tenants, meanwhile, are thinking, “This isn’t my building, and I don’t know how much longer I will be here. Plus, I don’t have the money to pay for the project.”

A payment plan can solve all the problems

By bringing in a third-party energy analysis consultant, all sides can work together to come up with a “win-win” payment plan.

Here’s how it works:

First, the building owner pays to install the project. Then, Bay Efficiency calculates the savings to the tenant and creates a schedule of payments. Savings from the project are used to pay back the building owner, including interest.

Everybody wins:
-- The tenant gets an upgraded space with no money out of pocket.
-- The building owner gets free building upgrades.
-- The tenant and building owner have reduced maintenance.

That is the magic of energy efficiency. The upgrades pay for themselves through energy savings and reduced maintenance.