On January 18, Mayor Muriel Bowser signed the “Clean Energy D.C. Omnibus Act of 2018,” a bold climate bill unanimously passed by the D.C.Council on December 18. With 74% of DC’s emissions coming from buildings, property owners across the District will soon be required to make investments to improve their energy performance under this new bill. The DC Department of Energy & Environment (DOEE) will establish a standard Energy Star score that buildings must meet which would be at least the level of DC’s current medium score.
DOEE has already required building owners of private commercial and multifamily buildings over 50,000 square feet to measure and report their energy and water benchmarking data each year. They warned the public about penalizing building owners who didn’t comply with a fine up to $100 per day, and they followed through with it. They provided an unofficial grace period for compliance with this law when it was enacted in 2013. This grace period has been over, and DOEE has been cracking down on this mandate since 2015.
As an update from our previous blog explaining WHAT the District’s new Climate Energy Bill entails, we’d like to to inform DC building owners on HOW they can prepare and protect themselves from mandatory building upgrades that will be enforced in the coming years.
With solar and energy efficiency incentives currently at a possible peak, Honeydew recommends taking advantage of the following $0 upfront energy savings programs now while they last. This will increase your building’s Energy Star score, protect your building from paying any compliance fines in the near future and realizing additional cash flow in the interim.
Opportunity: Many buildings have square footage hidden away that could be converted to additional revenue streams without any capital outlay – your empty roofs. Reducing your energy load through onsite solar will increase your building’s Energy Star score and protect you from getting fined for noncompliance.
Solution: There’s currently a ‘green rush’ in the DC solar market. In exchange for the solar incentives, solar developers in DC are offering to cover 100% of the installation, cover all maintenance and compensate the building owner through two different programs: (1) Power Purchase Agreements or (2) Roof Leases. In essence, the solar company will either charge for the solar energy delivered to your building at a rate significantly below Pepco’s rate, pay the building an annual fixed lease over 20 years, or provide the lease funds upfront to cover a roof replacement or roof repairs. Let us help you find the best offer by making DC’s solar companies compete for your business!
Note: With federal incentives scheduled to decline in 2020, a potential tariff war looming, and local incentives peaking, panel supply is becoming scarce.
Opportunity: With generous utility rebates from DCSEU and falling manufacturing costs, retrofitting to LEDs has never been a better value. LED retrofit projects typically have a 3 year payback period and IRRs of 20 to 40%. Not only will it help improve your energy performance and reduce operating budget, it’ll also increase your building’s Energy Star score.
Solution: Honeydew can help access complete retrofits of antiquated systems with no upfront cost through an off-balance sheet, shared savings program. You simply share a percentage of your savings with the lighting provider each month for 5 years. This program also includes a 5-year maintenance program to provide a hassle-free solution and peace of mind to busy building owners.
Note: We also provide free line item quotes if you’re interested in comparing prices to traditional lighting providers.
Deadline March 28: The Clean Energy Bill also includes a ‘grandfathering provision’ which states that for three years after January 1, 2019, the higher renewable procurement levels will not apply to contracts “entered into before the effective date of the CleanEnergy Act.” The effective date of the Clean Energy Act depends on when Congress approves the bill, which is expected to be on March 28. The potential cost increase to DC commercial customers is estimated to be between $2.50/MWh and $5/MWh, or around $1,125 annually for an average commercial account of 300,000 kWh/year.
It is important to prepare your energy management goals while renewable and energy efficiency incentives are currently at a peak. Taking advantage of these programs that don’t require any capital investment and provide long lasting savings or additional sources of revenue can protect your organization from getting fined and paying higher electric costs in the future. Contact Honeydew Energy Advisors today to find out how we can help guide you down the right path and choose the solutions that best fit your needs.