An extensive energy efficiency upgrade at the Port of San Francisco’s historic Pier 1 building is the first to leverage the city’s Property Assessed Clean Energy (PACE) bond financing program.
San Francisco’s GreenFinance initiative makes $100 million in green bonds available to commercial building owners, targeting energy efficiency improvements for an estimated 226 million square feet (sf) of property.
Using PACE, the costs for upgrades are spread out so they are paid over the payback period. The goal is to ensure that cost savings from energy or water efficiency or clean energy upgrades exceed higher tax assessments often associated with property improvements.
Pier 1’s retrofit will cost about $1.6 million and 90% of that will be covered by PACE bonds. The 20-year, low-interest bond is backed by Clean Fund of San Rafael, California, a specialty PACE finance provider.
When the retrofit is completed, it’s expected to reduce annual energy costs for the corporate occupant, Prologis, by $98,000.
Johnson Controls is doing the retrofit, which includes 1,500 lighting fixtures, a 200 kilowatt rooftop solar PV array and improvements to the building’s heating, ventilation and air-conditioning systems.
"Since buildings contribute 53% of greenhouse gas emissions in San Francisco, it is essential that we address inefficiencies in the built environment," says Melanie Nutter, director of the San Francisco Department of the Environment.
"Projects like this exemplify the successful combination of our policies and programs to both reduce emissions and help save businesses money. As more businesses take similar action, we’ll continue to grow our economy while decreasing carbon emissions to help ward off the worst effects of climate change," notes Nutter.
San Francisco established its PACE district in 2010 and was one of the first U.S. cities to launch an "open market" PACE program last year.
In late September, 14 counties and 126 cities in California joined to form the CaliforniaFIRST program, the largest initiative in the US to use PACE as a financing model for commercial property energy retrofits.
Measuring Efficiency of City’s Buildings
San Francisco published its first set of energy consumption statistics on its 305 municipal buildings, after passing an ordinance requiring all commercial buildings to do so on an annual basis (bigger than 10,000 sf).
Energy consumption dropped 3.8% last year compared with 2010 after 150 upgrades, saving the city about $4.6 million a year. Buildings include hospitals, museums, libraries, medical clinics and police stations, spanning about 37 million sf.
"We are learning what some private property owners who are already benchmarking buildings have known for some time – that regular measurement of building energy performance helps identify opportunities to save energy, lower operating expenses and improve property values," says Melanie Nutter, Director of the San Francisco Department of Environment.
After building owners feed their energy benchmarking information to the city, they get a reading on their actual energy performance, compared year-to-year, and a national energy score compares them to similar buildings. Audits then give owners specific direction as to which energy systems need improvemenets and an analysis of the costs and benefits of making those improvements.
San Francisco is one of six US cities that have building energy benchmarking ordinances along with Seattle, New York, Austin, the District of Columbia and Philadelphia. New York and Washington, D.C., have also made their building efficiency data public.
Here’s more information about San Franciso’s GreenFinance program:
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