Companies and local governments across the country are faced with the challenge of reducing energy consumption within their communities and encouraging sustainability. The most direct way to cut consumption is to reduce energy demand by improving the energy efficiency of existing buildings, related equipment and operating processes and practices. Buildings worldwide account for an astounding 40% of global energy consumption. In terms of commercial and industrial operations, the challenge is to create ways to enable consumers to invest in efficiency improvements in addition to approaches that may have a faster rate of return on investment. The United States Business Council for Sustainable Development (US BCSD), in coordination with Ygrene Energy Fund and Barclays Capital, has developed a solution to this problem that can be achieved using 100% private capital at no cost to local, state or federal government.

The solution has two parts. The first is the US BCSD’s By-Product Synergy Project process, a disciplined and proven approach for the identification, assessment and valuation of efficiency-improvement projects within a regional network of companies and other organizations. The second is Property Assessed Clean Energy (PACE) finance programs, which allow commercial and industrial property owners to finance energy efficiency, renewable energy, water conservation and by-product synergy projects associated with their buildings and processes.

What is Property Assessed Clean Energy (PACE) Financing?

The US Business Council has partnered with Barclays Capital and Ygrene Energy Fund to offer a comprehensive PACE program, at no cost to cities or counties. Barclays has committed initial funding to get the US BCSD program started. Under the program, the Business Council works with companies in a metropolitan region to establish a by-product synergy network that identifies PACE- eligible energy- efficiency, by-product synergy, and renewable- energy projects. At the same time, the Council works with the local city or county to establish a PACE tax district designed to finance viable projects that are underwritten by Barclays Capital. In the end, companies upgrade their facilities with more efficient equipment and processes, cities stimulate economic development and job creation, and the financial partners receive solid returns on secure investments – all with zero government funding. Repayment is secured by a tax lien on the property, amortized over the life of the improvements. Efficiency improvements lower energy bills and free up money to cover the tax payments. PACE assessments are not approved unless the energy cost savings are greater than the cost of the improvements. As of January 2012, laws authorizing establishment of PACE districts had passed in 27 states.  Click here for Frequently Asked Questions about PACE.

What is the US BCSD’S By-Product Synergy Program?

By-Product Synergy (BPS) is the matching of under-utilized resources and waste streams from one facility with potential users at another to create environmental and societal benefits as well as new revenues or savings. Synergies identified during a BPS project lead to significant energy and water efficiency improvements that are eligible for PACE financing. The BPS process, originally defined by US BCSD in 1997, has been implemented in regions across the country including Houston, Seattle, Chicago and Kansas City. The program is gaining support because of its proven pathways to energy efficiency, material reuse, emission reductions and valuable regional collaborations. Organizations seeking to improve sustainability find BPS a valuable way to help achieve those goals.

The US BCSD is working to grow these regional synergy networks in to a national grid of BPS projects. By 2015, our goal is to have 20 or more robust, ongoing projects around the country, able to deliver 5 million tons of CO2 equivalent reductions, 5 million tons of landfill-bound waste diversion and significant job creation.

Benefits of the BPS-PACE Approach

Financing offered through PACE opens the door to cities across the country to establish innovative by-product synergy projects along with renewable energy and energy efficiency in buildings and processes. In addition to reducing the energy consumption within the local community in which the projects are located, the combined BPS and PACE approach achieves the following:

Community Benefits

• Creates jobs in the construction and equipment manufacturing industries
• Stimulates the local economy
• Reduces demands on community infrastructure

Commercial Benefits

• Achieves energy and water efficiency improvements through equipment upgrades
• Reduces energy and water supply and management costs through efficiencies
• Reduces waste management and disposal costs
• Reduces greenhouse gas emissions