By Chris Hagan
Review Staff Writer
Powers Distributing has become the first company in Oakland County and the state to take advantage of a new method for financing clean energy projects.
PACE, which stands for Property Assessed Clean Energy, changes the game of commercial project financing by allowing property owners to finance energy efficiency and renewable energy projects through a special property tax assessment with the local government. While normal upgrade projects are financed on a three- to-five- year payback, PACE allows that financing to be spread out over 20 years by adding the installment amount onto the property’s tax bill.
Where Powers is seeing a benefit is in LED light and Solar Panel upgrades. Though the projects were completed before PACE was accepted in Orion Township, the project would’ve qualified for PACE so therefore Power’s is able to refinance.
‘We had to apply for it and it came to my attention about nine months and from that point forward the township has been just fabulous working with us,? Powers Chief Operating Officer Gary Thompson said. ‘We save enough money on electrical with this particular project over a course of a year to make more than the payments.?
Between 2013 and 2015, Powers added more than 16,000 sq.ft. of solar panels to its recycling center, saving them $2,000 a month in energy costs, installed LED lighting, and began working towards becoming a zero landfill business.
One of the requirements of PACE is that it be ‘cash flow positive? for the business meaning the amount of money saved must be more than the amount being financed. In the case of Powers, they refinanced $435,000 but they’ll save more than a $1 mil. through energy savings and incentives.
According to Thompson, Powers, which is Orion’s fourth largest employer, plans on utilizing PACE in the future for additional solar panels, LED lighting, or for what the newest energy-saving technology may be. The solar panels would come if Powers adds on to their warehouse in 25,000 sq.ft. increments.
‘We evaluated wind as a potential but what we find is even though we think we have a pretty windy location there’s not enough wind generated to offset the cost of the project,? Thompson said. ‘Each one of those new 25,000 sq.ft. sections are going to have a set of solar panels. I will be lit with LED lighting and whatever ever is state of the art at that time.?
A 25,000 sq./ft. addition would increase sales by 20 percent selling another one millions cases of beer a year.
Powers and the township worked with Lean and Green Michigan to get the project off the ground. Lean and Green coordinates with the local government, property owners, and lenders to expedite and smooth the process of financing. According the Lean and Green, each year the Powers PACE project will replace 360,000 kilowatt hours of traditional electricity which is equal to preventing the burning of 267,000 pounds of coal.
Township Supervisor Chris Barnett is hopeful Powers will be a catalyst for other businesses in Orion to participate in energy upgrades through PACE. Barnett also sees PACE as a driving incentive for other businesses to set up shop in Orion.
‘This is history in the making for Orion Township and the best part is that it’s all based on saving energy, money, and the environment,? he said. ‘I’m really excited for Powers and what they’ll be able to save and I want other businesses to explore these options in the future.?