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September 24, 2015
As environmentally friendly practices become more important to consumers and businesses alike, energy-efficient buildings are more prevalent than ever, especially in the environmentally conscious Pacific Northwest. By building smarter, owners can reduce operating costs, minimize strain on local infrastructure, improve air and water quality, and ultimately conserve resources in surrounding areas.
With these factors in mind, lenders are providing more resources and tools for finding the right financing options for green projects.
There are a number of practices gaining steam with developers and builders, and while an aim towards the familiar LEED certification will continue to be a focus for buildings, another movement is taking place: Net Zero, or passive, buildings. This sustainable solution takes energy efficiency to the next level by building houses and buildings that generate as much energy as they consume. Reaching Net Zero is a major accomplishment, as it requires securing energy from the sun, wind or Earth to meet or exceed the annual demand for heating, cooling or electricity needs of that building.
While Net Zero is a major aspiration, there are myriad options for developers and businesses looking to add environmentally friendly practices to their buildings and workspaces.
For individuals and builders interested in the latest trends and practices, there are terrific resources available in and around Seattle.
For example, the Northwest Eco Building Guild empowers organizations and consumers to learn about and use sustainable practices through education and sessions ranging from innovation in heating systems to building energy-independent communities.
Also, the Cascadia Green Building Council organizes 15 collaborative groups that span from Alaska to Oregon, and holds regular events and congresses that drive professional development for those interested in furthering environmentally friendly practices and the LEED standard.
Organizations like these provide builders, designers, suppliers, homeowners and others concerned with ecological building in the Pacific Northwest with access to learning opportunities to help them make smarter decisions.
A few of the trends to watch as we head into 2016:
Lower loan rates for green projects
Homeowners and buyers will likely see savings from energy efficiency measures as lenders’ underwriting processes recognize the value, allowing for more credit approvals.
Direct ownership of solar energy
As the solar energy market grows, it lends itself to more direct ownership through loans rather than the leasing habits of the past. Solar energy is one of the fastest-growing industries and continues to experience rapid adoption through government-sponsored incentive and rebate programs. With the decreasing cost of photovoltaic systems, along with incentives and rebates, solar energy is more affordable than ever before.
Increased green commercial space
Office tenants are demanding their spaces meet sustainability standards. To meet these demands, commercial buildings must go above and beyond standard LEED practices to ensure they’re staying competitive. This demand is already strong in tech sectors and markets on the West Coast, though growth is expected across the country.
Efficient new batteries
Solar energy is limited by the amount of time it takes to create it usually creates the most energy during times when energy is needed the least, like on a sunny afternoon. The resulting demand for energy storage has helped push battery technologies to higher levels. Batteries are also used as a backup energy source during power outages and for electric cars.
Emerging green securities
As green financing grows, green securities are becoming more commonplace. Green securities are issued to outside investors who want their money to fund environmentally sustainable projects such as solar leases and larger scale renewable energy installations.
Investing under green mandates
As environmental consciousness advances, large groups are going to greater lengths to ensure their investments are sustainable. As investors and donors are encouraging them to invest in green companies and industries, institutional investors such as university endowment and pension funds are beginning to remove unsustainable industries from their portfolios.
Finding the right solution for your project is no easy task. It’s important to sit down with your lending officer to discuss all available options.
Tim Corrigan, MBA, is manager of Umpqua Bank’s Phinney Ridge branch, chair of the Phinney Neighborhood Association Business Group’s marketing committee and treasurer of the Northwest EcoBuilding Guild’s Seattle Chapter. Corrigan specializes in green lending through Umpqua Bank’s GreenStreet program.