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Lorax Partnerships, LLC
1200 Light Street
Baltimore, MD 21230

443.449.6319

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Pertinent Policies

Discovering and Financing Energy-Saving Opportunities

Last week Katie and Tim attended the DC Sustainable Energy Utility office’s presentation on Discovering and Financing Energy-Saving Opportunities in Your Building. The facilitators of the forum were representatives from Urban Ingenuity, a DC based Financial Services Organization that “provides innovative solutions to develop and finance advanced energy projects, building retrofits, and state of the art clean energy infrastructure.” Urban Ingenuity focused on the Property Assessed Clean Energy (PACE) financing method, specifically its usage throughout the District of Columbia and the many opportunities for the program’s expansion.

Tim is already an expert on Maryland’s adoption of PACE (read more here!), but these Loraxians wanted to learn how DC’s more established program was operating and  how it could apply to our current and future DC projects.

Eligibility remains the same across state borders- both new construction and existing buildings qualify, but it applies only to commercial (office, institutional, multifamily, industrial, or non-profit), with government and single-family residential projects excluded. Many case studies that are currently financing building upgrades with DC PACE were discussed, and the presenters noted that PACE funding has been used on a wide range of project sizes, from $100k up to $2 million.

PACE helps take the ever-present question of financially prioritizing sustainability out of the equation. With its proven benefits for both long and short term owners (think: increased property value, decreased utility bills and lower operations and maintenance costs) PACE allows them to stay relevant in today’s competitive market.

As many of our projects pursue rating system certifications, we were excited to learn that standard PACE improvements and upgrades align well with many of the rating systems requirements of LEED, IgCC, and several others, therefore streamlining the application process for the PACE assessors. But, note that the program is adaptable to assess projects independent of green building certifications.

Contractors interested in working on PACE projects must be registered with the program, but the process is very straightforward- simply fill out an application here.

If you think your project may qualify, or you want to learn more about DC PACE details, please contact Tim Barranco or Katie Stanford!

LEED Certification and Registration Fees Increase

On December 1, 2016, GBCI adjusted the LEED registration and certification fees for the first time since 2010. LEED registration provides your team with access to LEED Online and now access to the fully integrated arc platform. LEED Online allows you to track LEED credits and strategies and facilitate LEED certification from start to finish.

In order to lock in current LEED certification rates, projects must complete certification or pre-pay certification fees before March 1, 2017. All new registrations are subject to the adjusted prices.

Key changes include:

  • $300 increase for project registration (for commercial projects)
  • New minimum thresholds introduced for fees
  • All currently registered and certified LEED projects will have automatic access to arc as of December 1, 2016
  • Optimized pricing considerations for large scale projects, portfolios, campus and volume program participants

Please see the new pricing chart on the USGBC website, here.  These updates apply to all Lorax projects scheduled to submit design or construction for review after March 1, 2017.  For questions regarding the price increase, please reach out to your Lorax Partnerships Project Manager.

 

LEED v2009 Registration to Close

leedv4As the green building and sustainability industry evolves, so too does the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.  October 31, 2016 marks the final day to register any LEED project in the v2009 rating system before LEED v4 takes full effect.  Additionally, projects currently registered within the LEED v2009 rating system must either achieve certification by June 30, 2021 or upgrade to LEED v4.

If you have a project seeking LEED certification in the immediate future, call us to help you get the project registered within the v2009 window.

Breaking Down Barriers to Community Solar

For Marylanders, there are several barriers to entry for renewable energy usage through solar panel installation.  For example, renters might not be allowed to install solar on their homes, some buildings might have too much shading for solar to be feasible, others might not be able to front the installation cost.  Luckily, Maryland is testing a community solar pilot program to make solar energy a possibility for those who would not otherwise have access.  Here’s how Hailee explains it:

The Community Solar Program is pretty much what it sounds like: Participants buy into a large solar array that may or may not be on their land, and get a portion or all of their energy from the array. 

Essentially, here’s how it works: Someone finds a good place to put solar panels (an apartment rooftop, a warehouse roof, top of a parking garage, empty field, over a landfill, unused farmland, etc.) and installs an array there.  The power gets run back to the utility, and allocated to certain residents or buildings that are subscribers to the program. The subscribers pay a reduced rate for the allocated solar power relative to the utility’s standard rate.

It is especially beneficial to low-income housing or apartment rental buildings, because the people occupying these spaces wouldn’t have the money or physical space or ability to install panels on their roof otherwise. This offers them an avenue to purchase clean energy AND lower their electric bills. To put this in perspective, low-income households have utility bills comparable to middle and high income households, so they pay a disproportionate and burdensome amount of their income on energy.

For scale, a 2MW array is the maximum size in most state’s programs.  That would require about 10 acres of land, and provide power for 1,200 homes.  The installations of community solar arrays are still eligible for state and federal tax incentives for solar installation.

Below are details for the Community Solar programs in Washington, DC and Maryland:

Washington DC

  • No cap on amount of power that can be installed
  • Panels can be installed on a building, either by the owner, or by a third party through a Power Purchase Agreement and the electricity can be allocated to another building or specific people
  • Excellent SREC market in DC that helps this program
  • DC requires a certain percentage of their utility power to… Continue reading

PACE 101: How It Works

At Lorax, we find, the largest barrier to adopting renewable energy systems for private property owners is the lack of financing options. Slowly but surely, counties in Maryland are adopting the Property Assessed Clean Energy (PACE) financing method to make renewable energy a more feasible option.  Here’s how Tim explains the program:

The PACE program is a government financing policy. Its goal is to incentivize energy efficiency and renewable energy upgrades on private property. It allows private lenders to fund the up-front capital cost of these upgrades, and recoup that money via property taxes. The payback period will be based on the life expectancy of the equipment- for solar panels it may be 20 years, for an HVAC system maybe 15 years. The interest rate on the loan will be in the ballpark of 5%.

Here’s an example of a project considering installation of a $1,200,000 solar PV array, rated at 700 kWp. Let’s assume the property owner secures $200,000 in incentives and rebates for their solar array. Through PACE, a lender would cover the remaining $1,000,000; the owner would pay it back like a 20-year mortgage at 5% interest.

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Their property tax bill would have a line item for the PACE-funded solar panels. In this example, they’d owe $79,200 annually.

Using some assumptions about solar panel output, we can estimate that the 700 kWp solar array will produce about 600,000 kWh of electricity annually. At rates of around $0.20 per kWh, that amounts to $120,000 in energy cost savings annually, more than the loan repayment amount. In this case, the owner would see an immediate positive impact on their net operating income. The 3, 5, or 7-year payback period people often discuss with these kinds of upgrades goes to 0. Of course, this is an idealistic scenario. Real projects will have many more nuances to consider, but this should give you feeling for the kind of cost-benefit analysis that PACE presents.

The PACE program has been running in California since 2010. Now in 2016, it’s active in 16 states. Maryland has adopted it, but each County must decide whether to opt in or not participate. So far, Anne Arundel, Howard, Montgomery, Queen Anne’s, and Garrett County are in. Many others are in the process of adopting or evaluating the program.

In Maryland, it’s available for commercial, industrial, and multifamily projects. It’s available for new construction and retrofits/rehabs. Government-owned… Continue reading

Attention! Attention! Change in LEED!

A significant change in LEED is just around the corner! 

In early March, USGBC membership approved a ballot measure to update the minimum energy efficiency requirements for LEED v2009 projects.

The minimum energy efficiency requirement for LEED BD+C and ID+C v3 rating systems is getting more stringent on April 8, 2016.  The new minimum threshold requires four points in order to achieve the EAp2 prerequisite.  This means that new construction projects are required to show an 18% improvement above the ASHRAE 90.1-2007 baseline, and major renovations must show a 14% improvement.  All projects registered prior to this deadline will not be subjected to this update.

Although this update is a significant change to the minimum requirements for LEED v2009 projects, the average LEED BD+C v2009 project improved upon the ASHRAE 90.1-2007 baseline by 29%. We are confident that the 18% minimum is achievable for all of our clients!

Contact us now if you would like to register your project before the April 8, 2016 deadline or if you need help achieving these loftier energy goals!

Multifamily Influx and NGBS

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As apartment buildings continue to emerge steadily in the greater Baltimore area, Lorax has found itself welcoming an influx of green multifamily residential projects into our portfolio. 

A contributing factor to the increase in green multifamily residential buildings is the recent update to the Baltimore City Green Construction Code (BCGCC) and Baltimore’s adoptions of the International Green Construction Code (IgCC). IgCC was implemented in April 2015 and includes green building compliance paths for not only commercial buildings but residential buildings as well. 

Also, the new changes to mortgage insurance premiums (MIPs) recently proposed by the Department of Housing and Urban Development (HUD) for several Federal Housing Administration (FHA) multifamily mortgage insurance programs reduce MIP rates from between 45 and 70 basis points to 25 for Green and Energy Efficient Housing.  This reduction has sent a positive market signal to invest in higher building performance standards that are more energy-efficient and sustainable than traditional building practices. 

On top of these requirements and incentives for green multifamily residential buildings, Baltimore has recently seen an increased demand in rental properties in the downtown area.  People in their 20’s and 30’s have been particularly drawn to Baltimore because of its universities and hospitals.

While LEED has always been a staple for many of our past multifamily residential projects and can be a compliance option for both the IgCC requirements and HUD incentive, more recently we have picked up on an interest in the National Green Building Standard (NGBS) by our clients.  NGBS Certification is a third-party verification that a home, apartment building, or land development is designed and built to achieve high performance.

Many of our clients have chosen to pursue the NGBS path towards green building compliance. For example, ATAPCO’s Creekside Village Apartments achieved NGBS Bronze in 2014, also, PMC Property Group’s 103 Gay Street apartments, Zahlco Development’s Calvert Loft apartments, the Nelson-Kohl Apartments in Baltimore’s Station North Arts & Entertainment District, and the Franklin Square Apartments in Rosedale are all pursuing NGBS Bronze currently. 

These projects and clients have all seen a reduced cost in the certification fees as well as more options for green building compliance when pursuing the NGBS standard.  NGBS has proven to be a great option for developers looking to develop a high performance multifamily residential building at a low cost.

Continuing Education and Energy Efficiency Payback

IMG_4246For Lorax, continuing education is a critical component of our ongoing development as a company.  We are not only a relationships company, but also a company that is keyed into the industry and up to date on current technologies, sustainable strategies, and green building incentives.  In March, Lorax attended both the American Council for an Energy-Efficient Economy (ACEEE) 2016 National Symposium on Market Transformation as well as the National Facilities Management and Technology (NFMT) Conference & Exposition.  Here is what we gleaned:

  • On the whole, existing buildings in the United States use more energy than any country’s total energy use except China and the U.S.
  • Certain upgrades to your building’s mechanical, interior lighting, and envelope since 2006 can be claimed as a tax deduction for this year’s taxes, via EPAct 179D.
  • Indoor Environmental Quality can sway employee productivity by 4-6%.
  • ASHRAE has developed a new standard for commissioning of existing buildings (ASHRAE 0.2-2015, Commissioning Process for Existing Building Systems and Assemblies) which can help update an existing building to meet current facility requirements. Existing building commissioning only costs about $0.30/SF and has a simple payback of 1.1 years.
  • The capital cost to purchase and install on-site solar systems has fallen 60% since 2010.
  • There is a 30% federal tax credit for residential and commercial solar projects, called the Solar Investment Tax Credit (ITC), which will expire on December 31, 2016, with the possibility of being renewed until 2022.

The major take-away from our recent learning opportunities is that buildings, particularly existing buildings, have the greatest opportunity for energyIMG_4242 efficiency out of all energy consumers.  Now is the prime time to capitalize on these energy efficiency opportunities through incentives, short simple payback, lower costs, federal tax credits, and higher employee productivity. We can help you get the best bang for your buck through first cost payback as well as operational savings when it comes to high performance buildings!

Baltimore City Green Construction Code is Here!

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Sustainable Development Land

Since the Baltimore City Green Construction Code (BCGCC) was implemented in April 2015, navigating the new code has been a bit like playing a board game.  We call the board game Sustainable Development Land; the goal is to reach Compliance Castle!  Click on the picture to see Sustainable Development Land.

At first, Sustainable Development Land might seem a bit tricky to traverse. We have figured out the best path to Compliance Castle through Exemption Acres, S’mores Swamp, and even FroYo Forest, and we are here to guide you through the process.  Play Sustainable Development Land to see if you comply!

If you are building or renovating in Baltimore City, you must play Sustainable Development Land. The rules are set, and we are here to teach you how to play.  In the future, there might be new rules or bridges added to the board game, helping you to reach the ultimate goal of compliance.

Game Setup

Before you can play Sustainable Development Land, you must set up the game board first.  Game setup includes indicating to city officials that the project intends to comply with BCGCC and which path you plan to take through Sustainable Development Land.  This requires the player to complete the Green Building Statement of Compliance Sheet provided by the City prior to permit application submittal.

How to Play

To read the full instruction for how to play Sustainable Development Land, see the Baltimore City Council Legislation website.

This board game has two paths to reach the ultimate goal: the New Construction path or the Renovation of Existing Building path. 

In some cases, a player can skip from start, all the way to Exemption Acres.  First the player must ask themselves the following questions:

  • Is my project a 1- or 2-family dwelling?
  • Is my project a multi-family dwelling that is no more than 3 stories above grade and contains no more than 5 dwelling units?
  • Is my project a temporary structure?
  • Is my project equipment of systems that are used primarily for industrial or manufacturing purposes?

If the answer is yes to any of the above questions, go straight to Exemption Acres.  No more action is needed!

All other Baltimore City Projects must follow one of the following compliance options before moving on through Sustainable Development… Continue reading

Green Code Mandatory on April 1 for All Building in Baltimore

By Jacqueline Lusk and Stuart Kaplow

Baltimore City adopted the International Green Construction Code 2012 as an overlay to the City’s building, fire and related codes effective April 1, 2015.

And despite that the IgCC becomes mandatory on April Fools’ Day, we are not playing a practical joke when we tell you that the effective date has “shifted.” 

Baltimore was among the first jurisdictions, in 2007, to mandate that all “newly constructed, extensively modified non-residential buildings achieve a Silver rating in the appropriate LEED rating system or satisfy the Baltimore City Green Building Standard” (a LEED-like local enactment). That mandatory law had some efficacy with new construction but almost no market impact on renovations as building owners strived to avoid the enactment.

Council Bill 14-0413 repeals that existing law and commencing April 1, 2015 expands its scope and breadth with a new Baltimore Green Construction Code to apply to all new construction and “all repairs, additions, or alterations to a structure and all changes of occupancy” with very few exceptions (one or two family dwellings, etc.).

Significantly, the new Green Code does not apply to: structures that achieve a LEED Silver rating; residential and mixed use buildings of five stories or more that comply with the ICC 700 at the Silver performance level for energy and Bronze level for other categories; and, to structures that comply with ASHRAE standard 189.1. The new enactment allows the Code official to accept third party certification of compliance with these alternative compliance paths; and the authors’ businesses will provide those certifications.

The Code official has announced a shifting of the ‘hard’ April 1 effective date until the effective date of the triennial code revision (of the building, plumbing, energy and other construction codes) which will likely be in first week of July, 2015. Until that not yet determined date, projects may utilize the new Green Code, but significantly, the Code official will accept new registration for the Baltimore City Green Building Standard which projects, when registered by that date, will be permitted to proceed under that Standard.

The urgency in sunsetting the Baltimore City Green Building Standard was in large measure because it utilizes many of the LEED 2009 metrics, but when USGBC again delayed LEED v4 and announced projects will be able to register for LEED 2009 through October 31, 2016, the Standard’s functionality was extended through that date.

The… Continue reading