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Financing can keep an energy-efficient project moving forward

Cowichan Golf & Country Club's lighting upgrade qualified the golf course for a $6,500 BC Hydro incentive.
Cowichan Golf & Country Club knew it could cut energy use by upgrading its lighting, but didn't have the money to pay up front for the new products. Financing the upgrades allowed the club to start saving about $650 a month in lighting costs.

Cowichan Golf & Country Club finances upgrades, saves $650 a month

How many of your would-be projects are sidelined because of a customer's budget constraints? One excellent way to keep a customer's business, and to ensure their project moves forward, is to suggest financing as a payment option.

"Vendor financing, which is often provided in the form of a lease, is an excellent solution for businesses to deal with any cash flow or budget barriers," says Tim Mosley, a senior program manager with BC Hydro. "Vendor financing is also a powerful sales tool for Alliance members, especially when you can clearly demonstrate bill neutrality in a project proposal."

Bill neutrality is a smart, budget-conscious way of making monthly finance payments. Essentially, any savings from an upgrade are used to make the finance payments, so the customer doesn't have any additional cash outlay versus budget.

According to Ray Salama, president of Vancouver-based Atticus Financial Group, bill neutrality and cash preservation add up to a huge selling point when it comes to project financing or equipment leasing.

"At Atticus, when we finance an energy-efficiency upgrade, our goal is to achieve bill neutrality whenever possible," he explains. "For example, if the projected savings from an energy-efficiency upgrade are $300 per month, we work to structure the deal so that the customer's payment is less than that for the duration of the financing."

Cowichan Golf & Country Club didn't have lump sum to pay for upgrades, but got them done

Norm Jackson says he used to cringe every time his BC Hydro bill arrived. The general manager of Cowichan Golf and Country Club knew his electricity costs were sky-high because of the club's outdated lights and lighting fixtures.

But coming up with the lump sum to complete the upgrades – about $32,000 – wasn't going to be easy. So, he asked his board of directors for help.

The board agreed that upgrading to longer-lasting and more energy-efficient lights was a sound plan, but only if the course's operating expenses remained the same. That's when Jackson contacted Atticus Financial.

Atticus Financial's Salama reviewed the proposed project costs and structured a 36-month, bill-neutral leasing agreement with a $10 buyout at the end of the term. As Jackson anticipated, the board voted in favour of the leasing agreement.

"Financially it was the right move," says Jackson.

In January 2015, Jackson and his team got to work with the assistance of two members of the BC Hydro Alliance of Energy Professionals - Clint Rivers from Albrite Lighting and Paul Ryan from Houle Electric. They replaced 270 halogen bulbs with screw-in LEDs, 125 T12 lamps with T8s (using fluorescent ballasts) and another 25 HIDs with LED luminaires.

The lighting upgrade qualified the golf course for a $6,500 BC Hydro incentive. The incentive, combined with projected monthly cost savings of $650 per month, means Jackson has more than enough in his operating budget to cover the lease payments.

Many financial institutions lend money for energy-efficiency upgrades

Jackson feels that many businesses in B.C. don't know that leasing is a payment option for lighting projects.

"Quite a few of Canada's lending institutions finance green building projects, energy efficiency upgrades and clean technology initiatives," he says. "If you're a BC Hydro Alliance member, it's really smart to make sure you bring financing to your customers as a solution."

If you would like to learn more about financing energy-efficient projects, including how to sell it to your customers, register for our upcoming workshop: Financing energy conservation projects – getting the customer to yes. The workshop takes place on March 29, 2016 or April 5, 2016.