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    McKinstry

    Energy Savings Performance Contracting Technical Energy Audit Services

    McKinstry can help develop custom financial solutions for energy efficiency projects. We also coordinate with utility companies and government entities to secure available incentives and rebates. We work within your state's statutory debt limit, procurement legislation, and applicable loan programs to provide finance options in-line with your investment criteria.

    Savings Guarantees

    In energy performance contracting, utility and operations savings provide cash flow to repay any debt incurred to fund infrastructure upgrades. The utility savings are derived from electrical, gas, water, and waste facility improvement measures that are implemented. The energy savings are converted to a dollar figure (by using the units saved multiplied by the utility rate) and guaranteed up to 90-100%.

    Funding Sources

    Tax-Exempt Bonds
    A tax-exempt bond is a debt instrument issued by a government entity, including states, cities, counties, school and fire districts, airports, and special purpose districts. Similar to a loan, the public entity issuer promises to pay the lender, or bondholder, interest and principle at agreed-upon rates and terms.

    Savings from energy-efficiency improvements can be used as a repayment stream, resulting in budget-neutral or budget-accretive financing solutions.

    Tax-Exempt Municipal Lease Purchase Agreement
    Also known as a tax-exempt capital lease, a municipal lease purchase is an installment purchase contract that most public entities can use to finance equipment and capital projects at a low fixed-interest rate. The effective interest rate depends on the strength of collateral, the borrower's credit worthiness, the duration of financing and current market rates, but is typically approximately 2.5%-4.0%. In many states, savings from energy efficiency equipment installation can be used as lease payments, resulting in a budget-neutral solution.

    Qualified Zone Academy Bonds (QZAB) for K-12 schools
    Qualified Zone Academy Bonds (QZABs) are low interest rate bonds available to a "Qualified Zone Academy." A Qualified Zone Academy must be in an Enterprise Zone or have greater than 35% of students enrolled in the Free and Reduced Lunch program. The bonds can be used to finance building rehabilitation including energy-efficiency retrofits, equipment, and training.

    State Loan Programs

    State loan programs will often authorize the sale of bonds to finance energy efficiency projects. Loans are typically available for schools, cities, counties, special districts, state agencies, and cooperatives. Terms can vary, but are generally set to match the term of the bonds that funded the loans. Loan terms may not exceed project life. Loan fees are set based on the size of the loan and rates are often more competitive than conventional borrowing methods.

    Utility Funding

    The participation of the utilities throughout the entire project is critical to the success of energy projects. A representative from the utility's conservation program is an important member of the project team to ensure all necessary milestones are met from the utility's perspective and to add innovative suggestions for maximizing energy savings and minimizing payback.

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    The City of Bellingham partnered with McKinstry to convert its streetlights to LED fixtures, cutting energy consumption by as much as 60% while saving $240,000 in annual energy savings. That’s 18,000 retired light bulbs that the city no longer has to pay for, power and maintain. Read the case study to learn more.