What if by updating water heaters, air conditioning units or lighting systems you could take the savings from future energy bills and use that revenue stream to pay for the financing note for the new equipment?
That’s the basic concept – on a larger scale – for energy performance contracting (EPC).
Little Rock investment powerhouse Crews & Associates, an affiliate of First Security Corp., has been involved in several high-profile EPCs in the northeastern U.S. Recently, the city of Boston’s housing authority approved a major public housing energy and water performance contract worth $59 million.
"If a city or town has done an energy audit and they see millions of dollars worth of energy retrofits, we’ll finance 100 percent of that cost today and our financing gets paid back from the energy savings over a 10, 20-plus year period," says Edmond Hurst, Senior Managing Director at Crews.
Boston’s public housing projects account for nearly 10 percent of that city’s residences, so the project will have a significant impact on many lives. Crews & Associates also scored a similar project in Baltimore worth $53 million.
Hurst adds that EPCs have only begun to "scratch the surface" of a lucrative financing market that he sees growing more quickly in the northeast, but before long in Arkansas. Learn more in the video below.