Westchester Action Plan, 2008 - Westchester County Government

Funding these Actions
All individuals and organizations have to deal with limited budgets. The benefit of energy
efficiency or renewable energy projects is that many of them can self-fund through
reduced operating costs.
However, the initial cost for the projects occurs
before reduced operating costs are
experienced. Businesses can use such tools as
net present value or pay back periods to
assist in prioritizing, as can a homeowner.
Non-profit institutions and government can
consider these approaches, but they may not
adequately address the environmental benefits
associated with an energy project. These types
of organizations may also evaluate projects by
the reductions in GHG emissions per
dollar spent and allocate budget based on
this criterion.
EPC (Energy Performance Contracting) is
another way to fund a project with high initial
capital costs. An EPC project is an innovative
financing technique that uses cost savings from
reduced energy consumption to repay the cost
of installing energy conservation measures.
Normally offered by ESCOs (Energy Service
Companies), this innovative financing
technique allows the capture of benefits from
energy savings without up-front capital
expenses on the part of the building or facility
owners, since the costs of the energy
improvements are borne by the performance
contractor and paid back out of the energy
savings. The National Association of Energy
Service Companies xxv can provide further
information on providers and the innovative
approaches developed by ESCOs.
Do green buildings always cost
more
Not necessarily. In a recent building
construction, triple glazed high
efficiency windows were used at an
increased cost of $80,000. However
this allowed the elimination of the
perimeter heating system, a savings of
$100,000, and downsizing of the
HVAC, a savings of $40,000. Total
construction savings: $60,000. Note:
this does not include operating savings
resulting from the reduced energy
requirements.
Source: 7 group
An ESCO, or Energy Service
Company, is a business that develops,
installs, and finances projects designed
to improve the energy efficiency and
maintenance costs for facilities over a
given time period. ESCOs generally
act as project developers and assume
the technical and performance risk
associated with the project. Services
are bundled into the project's cost,
and are repaid through the dollar
savings generated.
Power Purchase Agreements are a relatively new technique for financing renewable
energy/clean power installations on host facility sites. The power seller, typically an
Independent Power Producer, at its expense, installs a system such as a PV system, for
Attachment 5: Energy
Westchester Action Plan, 2008 5-11