Why Some Building Owners Overpay for Energy Projects
We're launching a tool in December that can help you avoid overpaying. Here's how.
When a building owner decides to invest in energy efficiency or renewable energy, figuring out how to pay for it shouldn't be harder than the project itself. But it is. Most building owners assume financing is straightforward: get a loan, maybe find a rebate, and move forward.
The reality? You could leave tens of thousands of dollars on the table.
A Maze of Money
Energy projects can tap into a dizzying array of capital sources. Utility on-bill financing, commercial lenders, ECSOs, green banks, credit unions, and many more. Each lender has different rates, terms, approval timelines, and maximum loan amounts.
After you’ve done the research to find capital, you need to decide which one(s) to use. And how much should you use from each? That’s how our new app can help.
Example: $20,000 Hidden in Lower Payments
Consider a $500,000 HVAC upgrade. The building owner gets two financing offers:
Option A: 3.5% interest, 15-year term, monthly payments of $3,573
Option B: 4.5% interest, 10-year term, monthly payments of $5,187
Some owners might choose Option A because it has a lower rate and lower monthly payments—it looks like the winner. But is it? Here’s how they really cvompare:
Option A total cost: $643,140 (you'll pay $143,140 in interest over 15 years)
Option B total cost: $622,440 (you'll pay $122,440 in interest over 10 years)
The "better deal" just cost you an extra $20,700—plus five more years of debt on your books.
This is a simple example with just two options and anyone can quickly do that math. But imagine sorting through dozens of lenders, provincial programs, utility incentives, and rebates—all with different rates, terms, and restrictions that look similar on the surface.
It Doesn’t Have to Be This Hard
Building owners shouldn’t need to be funding experts. There's plenty of capital available for good projects. What's been missing is a way to connect the dots quickly and intelligently.
That's what we've built. In December, Greenwich Road Consulting Ltd. is launching a free online tool that finds funding sources for your project and optimizes how to use them—so you keep more money in your pocket.
We can't wait to show you how it works. Because if you’re not managing your energy, who is?
2-Minute Payback is GRCL’s blog of energy-saving tips and tools for busy building managers. This post was written by Chuck Faulkner.
