Retail: Energy Efficient

How Financing Can Help California Retailers Become Energy Efficient

By Al Gaspari

Retail stores run up the largest energy bills in the nation's commercial building sector, to the tune of about $20 billion a year.1 Long operating hours—which get even longer during the holiday season—mean the all-important display lighting that plays a vital role in merchandising is consuming energy all day, often seven days a week.

It also means that the heating, ventilation and air conditioning (HVAC) systems that help keep customers comfortable and employees productive are hard at work during that time as well. Together, lighting and HVAC account for about 70% of the electricity that retail buildings use.2 But these challenges also present opportunities for California retailers to save money and energy. A typical retail store can increase its net profit margin by 1.26% when it decreases energy costs by up to 10%.3

Once a retail business understands the energy it uses and has selected a qualified contractor, it can evaluate the energy efficiency project it wants to implement.

For example, upon inspection of a retail facility, a contractor could discover that the lighting fixtures consist of fluorescent and incandescent lamps and recommend replacing them with ENERGY STAR®-listed LED directional lamps. ENERGY STAR-certified LED lighting lasts 20 times longer than incandescent lighting and two to five times longer than fluorescent lighting.4

New LED lighting technologies also produce better quality light that can further engage your customers by enhancing the appearance of your merchandise.

Alternatively, if the retail store's HVAC units are nearing the end of their life, the contractor could recommend replacing them with ENERGY STAR-qualified commercial HVAC products.

These products can increase the comfort for your customers and employees through more efficient heating and cooling. And…using an ENERGY STAR-qualified HVAC product, a 12,000-square-foot retail store could save more than $21,000 over the life of the HVAC and prevent more than 40,000 pounds of greenhouse gas emissions!5

On top of this, rebates and incentives available from PG&E can help defray the upfront costs associated with energy efficiency HVAC projects. For example, retailers who replace an existing furnace with a central natural gas forced-air unit that includes a built-in variable-speed motor would be eligible for a rebate of up to $300 per unit!6

Financing options
PG&E knows that the upfront costs of these improvements can be a burden for California retailers. Luckily there are many energy efficiency financing options available that can help make these projects affordable. These options can let you take control of your investment decisions and proactively plan for equipment replacement, rather than scrambling to replace units on an emergency basis.

Following are some of the most popular financing options for California retailers implementing energy efficiency projects:

  • Property Assessed Clean Energy (PACE): This financing option allows property owners to fund energy efficiency, water efficiency and renewable energy projects with little or no upfront costs. With PACE, residential and commercial property owners living within a participating district can finance up to 100% of their project and pay it back over time as a voluntary property tax assessment through their existing property tax bill.7 PACE financing is better suited to owner-occupied buildings.
  • Equipment Leasing: This is a different form of financing that small businesses use to cover the costs of an entire energy efficient project. Leasing and financing via loans help retailers who are not ready to fund projects acquire the equipment they need to conduct their business operations.8
  • On-Bill Financing (OBF) from PG&E: This is financing through PG&E with no upfront, out-of-pocket investment. PG&E's OBF offers 0% interest loans between $5,000 and $100,000 with up to five years to repay. The monthly loan payment amount appears on the energy bill. It requires no commercial credit check or pledging personal assets. Loan terms and monthly payment amounts are determined based on estimated monthly savings from the project.9

The most effective type of energy efficiency project is one that aligns with a business's goals and gets done. That's why it's important to work with a contractor, such as a PG&E Trade Professional, who will develop an ongoing energy savings plan for your company. To learn more about energy efficiency budgeting and business financing options, download the "The Insider's Guide to Financing Energy Efficiency Projects" from PG&E.

Referenced in article:
  1. ENERGY STAR
  2. ENERGY STAR
  3. Pacific Gas and Electric Company
  4. Pacific Gas and Electric Company
  5. Pacific Gas and Electric Company
  6. Pacific Gas and Electric Company
  7. Center for Sustainable Energy
  8. Equipment Leasing and Financing Association
  9. Pacific Gas and Electric Company



Financing options are available for California retailers. Find out how your business can benefit.
  • SMB Blog Author
    Al Gaspari
    Principal Program Manager for Energy Efficiency Finance for PG&E. Oversees the On-Bill Financing (OBF) Revolving Loan Program, and the upcoming energy efficiency finance pilots, including the On-Bill Repayment option. Al works with PG&E’s Account Managers and Channel Partners to help customers overcome investment hurdles for energy efficiency. Formerly, Al was Finance Director for the Greater Cincinnati Energy Alliance, a nonprofit that helped homes and businesses invest in energy efficiency, and a Senior Manager with KPMG LLP, advising large utilities, IPPs and industrial conglomerates. Al can be reached at EEFinance@pge.com.
 

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