The national manufacturing industry generates large quantities of revenue and employs many thousands in its operations, but also represents an energy-intensive market sector. The Maryland Department of Commerce released a study noting that the 4,000 manufacturing businesses in Maryland generate $22.8 billion in gross state product and employ 109,450 individuals. This large market is a key component in the state’s economy, as well as to the lives and jobs of its residents. For the industry to continue to adapt and remain competitive, it should focus on developing energy efficient processes. Doing so will help the industry resist stagnation and lead through innovation.
One low cost but impactful strategy would be to implement measures that decrease emissions and reduce maintenance costs, improving sustainability as well as net income. Lower utility bills and M&O expenses would serve to increase revenue. Businesses interested in improving their bottom line in this manner can do so through Property Assessed Clean Energy (PACE) financing, a mechanism which fully finances clean energy upgrades to commercial buildings with $0 down and a 20-year payback term, with low, fixed interest rates.
Utilizing C-PACE to fund efficiency or renewable-energy projects allows the return on investment in utility and M&O savings to immediately benefit the borrower. In turn, the longer than traditional loan period (often 20 years or more) defers the cost of the loan and frees up funds for immediate uses. In some municipalities, borrowers can retroactively use C-PACE to refinance the paid costs of qualifying improvements. Conversely, most municipalities will allow borrowers to incorporate C-PACE funding into the initial investment stack for the construction of a new building. Though C-PACE is useful to all commercial property owners, manufacturers in particular find it helpful in their operations: nationally, manufacturers have benefited from the third highest amount of C-PACE financing to date. Manufacturers who use this program have already taken advantage of the many upsides to clean energy utilization, such as creating on-site energy production that lessens dependence on the grid, saves utility costs, and earns tax credits. C-PACE is unique for many reasons, one being its ability to preserve credit lines and save cash which can be utilized in business opportunities. Among the multiple reasons for manufacturers to utilize this financing mechanism, one of the most appealing reasons to upgrade to clean energy with C-PACE is the ability to reduce operating costs while increasing the value of the building. Because projects are often cash flow positive from the day that financing closes, building owners will experience these benefits immediately. The MD-PACE program has become instrumental in Maryland in allowing for sustainable development and improvement in both the economy and environment.
C-PACE enabling legislation now exists in over 30 states nationwide, has created 16,600 jobs and produced over $1.1 bn in value (PACENation.us). Manufacturers looking to decrease costs and invest the new profits in optimizing other areas of production could benefit greatly from participation in a C-PACE financing, particularly following a financial downturn. Being able to externally finance clean energy upgrades can change the future of a manufacturing company and establish the borrower as a leader in green manufacturing. Start that change today at www.md-pace.com.