In many of the states in which PACE Equity funds projects, there are specific energy savings requirements outlined by the state C-PACE guidelines. One such requirement is evaluated using SIR Compliance. The Savings to Investment Ratio (SIR) requirement is used to confirm a meaningful level of energy savings by comparing the total investment in a project to the projected reduction in utility costs.
In some states, SIR Compliance requires that energy savings meet a minimum threshold (for example, the energy savings must meet a minimum of 10% above code). In other states, energy savings must meet a minimum ratio (for example, the energy savings over the term must be greater than the total project funding).
Understanding the details of the SIR Compliance for the State and Municipality in which projects are being developed is vital. PACE Equity’s team of industry experts understands the local C-PACE requirements and the Engineering & Building Optimization team knows how to maximize the SIR for each project.
SIR compliance requirements may include:
- Savings over local code
- Savings to investment over term
- Savings to total assessment over term
SIR Compliance can limit the available funding for projects unless they work with an experienced C-PACE capital provider. PACE Equity:
- Understands these requirements by State and municipality
- Optimizes funding potential by leveraging critical energy engineering knowledge
Thorough project analysis ensures up front clarity on funding commitments. PACE Equity’s mission is to enable the development of desired buildings while ensuring they are engineered for success. Firm funding commitments are provided, incorporating SIR Compliance requirements for energy savings, along with expertise in energy codes, energy savings measures, and energy savings engineering.
To learn more about SIR Compliance in each state, contact us.
To help clarify the concept of SIR Compliance, read the two examples below:
Example 1: State of Missouri. Multi-Family. New Construction.
A local developer was seeking $5 million of funding for a project, but PACE Equity recognized funding wasn’t available at that level based on the SIR Compliance for the state (and the potential energy savings). To overcome this, our energy engineering team suggested a change to the HVAC system being installed which would allow for additional energy savings at minimal cost. In addition, this upgrade offered a 4-year payback from the reduced operating costs.
A local developer was seeking $5 million of funding for a project, but PACE Equity recognized funding wasn’t available at that level based on the SIR Compliance for the state (and the potential energy savings). To overcome this, our energy engineering team suggested a change to the HVAC system being installed which would allow for additional energy savings at minimal cost. In addition, this upgrade offered a 4-year payback from the reduced operating costs.
Download a related case study: $4.1M funding for multi-family luxury apartments.
Example 2: State of Minnesota. Hospitality. New Construction.
Before contacting PACE Equity, a local developer performed their own energy study. They determined that $400K of energy savings could be achieved. This limited the available project funding to $400K when factoring in the SIR Compliance for Minnesota. When the developer turned to PACE Equity for guidance, we were able to perform an in-house energy study. Using our expertise in SIR Compliance and energy engineering, potential savings and rule compliance were identified. Based on this analysis, PACE Equity committed the $4.3 million the developer needed to close the capital stack.
Contact PACE Equity or schedule a meeting to learn more about SIR Compliance for your next project.
