Leadership in Energy and Environmental Design (“LEED”) Certification is a nationally recognized certification that building owners can attain through installing environmentally friendly improvements to their property or including them in the plans for new construction. To become LEED certified a property owner must apply using a checklist of efficiency options under several categories; there are levels of certification ranging from the basic level to platinum, determined by the number of points the property earns. This system allows for flexibility so that the property can maximize certain categories (such as energy efficiency) while only achieving basic points in another category, such as in building materials and resources.
To become LEED certified, a minimum of 40 points is required; to achieve the next highest-level Silver, a minimum of 50 (The Balance Small Business). One of the largest barriers to LEED certification is the cost of LEED improvements; appliances that save water or energy, improve building efficiency, produce renewable energy, or other LEED-applicable measures typically have a more expensive sticker price than their lower quality competitors. However, through lifetime savings these appliances are nearly always more cost-effective in the long run through utility-cost reduction and less required maintenance. This is where C-PACE financing enters. Through C-PACE, the hard and soft costs associated with high-efficiency improvements are eligible for 100$ financing at the start of a project, allowing the property owner to immediately enjoy the utility savings of the improvements. This improves the property owner’s liquidity and permits the owner to pay back the cost of financing at a steady, non-accelerating rate over the financing period, typically 20 years or more. The estimated useful life (EUL) of the improvements must meet or exceed the financing period, so that after repayment the property owner receives 100% of all utility savings.
Maryland is a leader in LEED certification, according to the US Green Building Council. The Old Line State appeared on USGBC’s top-ten list of most LEED certified spaces per capita each of the past 9 years, most recently climbing to 6th most overall. Green buildings are clearly important to Marylanders, as in addition to passing C-PACE legislation more than 5 years ago, high-efficiency property incentives are enshrined in state legislation such as the EmPower Maryland Act and tax incentives for LEED certification. Through C-PACE financing, tax and utility incentives, energy savings, and more, there are few other states where it makes more financial sense to become LEED certified.
PFS encourages property owners with interest in LEED to reach out and learn more about how C-PACE financing can aid in achieving accreditation. If you want to read more about LEED certification, follow this link to USGBC’s website.