Today’s clean energy generation systems
can transform your business in multiple ways.
Trillions of dollars in capitalized value are in the process of shifting from our nations’ utilities to on-site power generators. Property owners that seize upon on this moment and transition to community “energy hubs” will see the greatest gains.
Over the last 10 years, utility rates in the state of California have escalated at an alarming clip. And these rates are expected to continue to outpace inflation by at least 50% over the coming years as a result of the renewable energy portfolio standards that California utilities are aiming to meet by 2030 and 2045. If utility rates continue to escalate at their historic rate over the next 25 years, a mere $1,000/month electric bill today will likely result in $572,472 of total charges. And this could all be offset for a fraction of the cost with on-site generation.
When building owners finance a self-generation energy system today, they are typically able to access a monthly payment that is less than the value of the energy they are offsetting. But the real value they are getting is not the immediately lower bill. It’s the hedge against inflation. Because before long, the bill they have today will be double or triple what it is now. And if they are locking in a payment at or close to today’s rates – they are making it possible to increase their operating margins as time goes on.
And this increase in operating margin can either be used to enhance net income, or make their business more competitive in other ways. Further, development of a McCormack Energy Hub can often result in increased tax credits, access to renewable energy credits that might otherwise be unattainable.
Over the course of our history in energy, we have built many unique financing relationships. These relationships range from regional banks, to credit unions, to specialty energy lenders. We are an approved EPC contractor within California’s GoGreen financing program, as well as the state’s PACE funding program (which allows project financing to be paid as a property tax supplement).
With most of our projects, we are able to provide financing that enables our clients to develop their own on-site generation without having to tie up equity in their property or come out of pocket on a monthly basis for more than their current electricity expenses.
In some cases, we are also able to provide clients with a Power Purchase Agreement option, where our financial partners take ownership of the subject energy system, deal with the tax credits independently, and simply sell power back to our client at a reduced rate (while also offering our client the opportunity to purchase the system outright for a discounted price in the future).
Building owners typically view electricity costs as pain point. It’s an expense that they haven’t been able to control.
But with a properly engineered on-site clean energy generation system, the reverse is true. Utility rate increases mean self-generating building owners are simply saving more. Or perhaps they are making more if they have converted their tenants into paying electricity customers.
And when these building owners are saving more or making more – that means the values of their buildings are increasing.
In many cases, the added capitalized value that is realized from installing a clean energy system can dwarf the after-incentive cost of installing such a system – making it possible for building owners to see a fairly rapid return of capital plus profit in the event of a building sale or refinance.
The companies that have the highest energy demand are often those with the lowest operating margins (farming, grocery sales, manufacturing etc.).
Fluctuating electricity prices have a huge impact on the ability of these businesses to compete – and in some cases can even cause them to relocate.
But businesses that can take control of their electricity cost through on-site generation can actually increase their operating margins, hedge against inflation, and generally make themselves more competitive.
For some companies, putting in place an on-site generation plant could be seen as a long-term defensive mechanism.
No matter your position in the economy (retailer, supplier, landlord, service provider etc.), an increasing focus is being placed on environmental, social and governance (“ESG”) policies.
This is because the investment dollars that drive our economy – coming from our biggest pension funds and investment banks — are now being deployed with ESG policies in mind. And this is impacting not only the companies receiving those investment dollars, but also every company in their supply chain. For most large public companies, ESG compliance has become a major challenge.
But for mid-sized private companies, ESG policies have actually created more of an opportunity. Companies that voluntarily choose to comply with ESG policies and run off their own sustainable power are now more valuable business partners, vendors and customers to the larger companies that support them.