Property management firm finances lighting upgrade, cuts $36,000 annually
Borrowing money to get upgrades done can pay off quickly
Helping a customer navigate budget constraints is just one of the many talents of Alliance members. Today, more than ever, operators want to see an airtight business case before they consider completing an energy-efficiency upgrade.
And even then, despite demonstrating a clear return on investment, a project can come to a standstill because of competing demands for capital.
However, financing – or borrowing – is an increasingly attractive way to get would-be projects off the ground. Today, many of Canada's lending institutions finance green building projects, energy-efficiency upgrades and innovative environmental or clean technology initiatives.
Financing is a smart, alternative payment option
Mike Alavi of Gammon International, a BC Hydro key account customer, couldn't agree more. With the help of financing, Alavi, a Property Manager at Gammon, recently completed a series of lighting improvements in the common areas at The Genesis, a 26-floor residential tower in downtown Vancouver.
The building's hallways, amenities, stairwells and underground parking garages were full of T8s. The lights, which were on 24 hours a day and seven days a week, were consuming electricity constantly. Alavi knew lighting controls could save the building's homeowners a significant amount of money, so he spoke with a local lighting contractor to explore his options.
After some discovery, the pair settled on a wireless LED lighting system with adaptive, bi-level control. The custom lighting project had the potential to save The Genesis more than 192,000 kWh annually – a $36,000 saving.
Despite the hefty savings, when Alavi pitched the project to The Genesis' strata council, the members wavered. A number of more pressing building repairs were already in the pipeline and there wasn't extra money in the operating fund to pay for a non-essential lighting upgrade. The feeling was: the lights work fine, why change them, especially if funding isn't available right now?
Wisely, he suggested financing as an alternative payment option.
Savings from upgrade used to make the finance payments
In his proposal, Alavi demonstrated how the energy savings The Genesis would realize from the lighting upgrade could be used to make the finance payments for the duration of the upgrade's payback period. He worked with Rebecca O'Connor at RCAP® Leasing Inc. to structure the deal.
At The Genesis' annual general meeting, homeowners got a chance to vote on the proposal. It passed. In late June 2015, the lighting contractor got to work. The project qualified for an incentive of more than $51,000, and The Genesis expects to recoup its investment in the new lights in less than four years.
"Very few customers can pay for capital improvements of this size and kind in cash," says Alavi. "That's what makes financing such a powerful sales tool."
To learn more about financing, 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 and April 5, 2016, and is free for members of the BC Hydro Alliance of Energy Professionals.