Energy Efficiency Financing

Growth through Energy Efficiency

Reduced energy consumption, not only contributes to a healthier environment, but also serves as a key cost containment measure that has a proven record of increasing operating income and improving the cash flow for multifamily assets. While still a relatively untapped financing mechanism in the broader multifamily sector, energy efficiency investment in multifamily housing projects has become an integrated part of property rehabilitation, modernization, and development plans.

Collingwood provides clients with a comprehensive understanding of the wide array of program offerings in the energy efficiency-specific financing market, and will assist you in planning, pursuing, implementing, and monitoring the most cost-effective energy-efficient project. Our team will support you in achieving your energy efficiency cost reduction goals, and fully understanding the risks and opportunities of different financing program features. Our goal is to provide distinct value-added services, to reduce the complexities associated with performance-based energy-efficient capital improvements in multifamily housing.

Key Services

Planning & Implementation

The Collingwood multifamily team will assist with navigating through the planning and implementation processes associated with achieving your energy efficiency financing objectives. We will coordinate the development of an action plan covering:

Access to Capital

We will assess financing alternatives to determine an appropriate financing strategy – to cover energy efficiency upgrades only, or if the cost of combining additional capital improvements should be incorporated into a larger refinance plan. Special attention will be given to:

Oversight & Monitoring

The most attractive feature of certain energy efficiency financing products is the predetermined payment agreement, under which payments are contingent on documented utility savings. To this end, Collingwood will review quality assurance reporting to verify savings generated by energy-efficient upgrades. Through cost savings tracking methods, we’ll compare results (lower operating costs) to contractor guarantees of energy and/or financial savings to confirm owner/developer’s recovery of their investment in energy efficiency.

For subsidized multifamily housing, our team will confirm the state housing finance agency adoption of the Energy Consumption Model (ECM) calculation of utility allowances (IRS Ruling 26 CFR Part 1 Section 42 Utility Allowance Update). Application of ECM allows savings from energy efficiency capital improvements to be used in determining a lower HUD utility allowance used in LIHTC, tax-exempt bond financing, and other subsidized housing programs. Additionally, we’ll verify implementation of a predetermined “safety factor” to ensure that tenant utility allowances exceed tenant utility costs such that on average tenants will save more on their energy bills.