RC Cubed provides energy solutions to the Santa Cruz Homeless Services Center which will result in cost savings of over $980,000 over 25 years. The savings are the equivalent of providing 392,000 meals or over 130,000 nights of housing to individuals in need.
what’s on the Inside The Solution -
Measurable Returns.................. 5
-
HSC By the Numbers ................ 6
The Mission -
From Dream to Reality ............. 8
-
Organizational Impact ..........10
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Sustainability/Responsibility ...12
The Model - The RC Cubed Process ................16 - Finance Options ...........................18 - Power Purchase Agreements .....18 - Other Financial Tools ....................19 - Getting Started .............................20
the solution
RC
Cubed provides
to reduce an organization’s energy
innovative energy
use and costs and create
and financial solutions
measurable returns on investment.
that help organizations achieve
RC Cubed is adept at finding the
strong returns on investment by
right solutions to achieve an
supporting the renewable energy
organization’s goals with their
industry while reducing their energy
portfolio of existing buildings, and the
footprint. The turnkey solutions
results speak for themselves: a recent
provided by RC Cubed support
solar project on 13 buildings owned
ratepayers, renewable contractors,
by one organization is estimated to
and financiers by assuring ratepayers
increase the property value of the
savings, delivering contractors with
organization’s assets by over $10
cash flow assurance, and providing
million, while allowing the
guaranteed returns to investors.
organization to capture $650,000 in
RC Cubed is passionate about bringing clarity and control to organizations’ energy costs and helping organizations to ‘go solar’. Whether working with an organization that owns a portfolio of 10 buildings or 100 buildings, RC Cubed will identify the right solutions
savings in the first year of the project alone. Whatever the size of an organization’s building portfolio RC Cubed will develop a renewable energy and efficiency solution that meets the organization’s fiscal and sustainability goals while providing significant returns to project investors.
HSC By the Numbers • 392,322 meals will be served with the money saved • 130,774 nights of housing will be provided with the money saved • 2,000 kW in LED Lighting Upgrades • 139 kW Solar System Installed • 5,438,945 kWh of solar production over 25 years • $980,807 in expected savings over 25 years
the mission
THE
Homeless Services Center (HSC) in Santa Cruz County,
California, provides pathways out of homelessness and into permanent housing for individuals and families through
emergency shelters, permanent housing programs, and income and employment programs. The issues the organization is attempting to solve are vast, but their team of dedicated and knowledgeable staff is up for the challenge. As part of the national 100,000 Homes Campaign, HSC launched the 180/2020 Initiative in 2012, with a goal of finding permanent housing for 180 individuals with the most severe health and safety needs. HSC quickly met and exceeded that goal, having placed over 700 individuals in permanent housing by mid-2018. HSC owns and operates several buildings to provide direct services and receives funding from public sources, primarily in the form of grants from local government and state and federal agencies. However, these public funds cannot be used for operational and overhead costs, and HSC relies on the generous support of their community to ensure that they can keep the lights on and the heat running in their emergency shelters and service centers. Variable monthly utility costs make up a significant portion of the HSC operating budget and concern about these unpredictable costs and utility rate increases over the coming years has made planning for these costs challenging. HSC was interested in opportunities to reduce their operational and overhead costs through energy efficiency and renewable energy projects. However, as public funds could not be used for operational expenses and additional funds were already allocated, finding the right resolution was proving difficult.
“We had a clear opportunity to reduce our energy costs—those very substantial utility bills for the housing we operate, the emergency shelters we operate, the hundreds of meals we provide every day—to reduce those utility costs and make them less variable and less uncertain in the future…so we can help more people.” - Sibley Simon, Board Treasurer for the HSC
HSC
assumed that
The entire project is funded through
solar energy
a Power Purchase Agreement (PPA),
was simply an
wherein an investor owns the solar
‘unachievable dream’ until RC
system on HSC facilities and sells the
Cubed approached HSC with an
power back to HSC at a fixed rate.
innovative and cost-effective energy
The HSC’s current retail electricity
efficiency and renewable energy
rate is $0.17/kWh, while the rate HSC
solution. RC Cubed helped HSC
will pay for solar electricity is
install a total of 139 kilowatts (kW) of
$0.14/kWh, resulting in immediate
solar energy on HSC’s facilities,
savings for the organization; further,
which will produce roughly 5.4 million
the solar rate escalator, at 2% per
kilowatt-hours (kWh) of energy over
year, is lower than the average utility
25 years. In addition, HSC executed
escalator rate (at 5%), which means
on a 2,000-kW LED lighting upgrade
the HSC’s savings will grow over the
project and replaced the badly
term of the agreement.
damaged roof on one of their primary service centers. Over the first 25 years of the project it is anticipated that these investments will save HSC over $980,000, which is the equivalent of providing 392,000 meals or over 130,000 nights of housing to individuals in need.
This financial model allows HSC to have a steady and predictable monthly utility bill, and after 17 years HSC will own the solar system outright and benefit from sustained utility bill savings as the solar panels produce energy into the future.
“The real win is when we can say to our donors, ‘We are being environmentally responsible, we are leading organizations like ours in environmental responsibility, and we found a way to do it without spending…any dollars of what you are donating to us for this cause.’ That is a story we love to tout, and people love to hear.” -Sibley Simon, Board Treasurer for the HSC
RC
Cubed was passionately interested in supporting HSC’s mission and driven to create a project that would support the organization’s long-term success. By providing private equity
capital and the financing, engineering, and project management expertise necessary to scale a project appropriate for HSC, RC Cubed made HSC’s dream of being both environmentally sustainable and fiscally responsible a reality. Within a year and a half of discussing a potential partnership, RC Cubed helped HSC design and develop an initial small solar project that provided cost savings to HSC starting at day one. By partnering with project investors that were able to take advantage of federal solar tax credits and other financial incentives for solar, RC Cubed assured that HSC would pay a fixed rate for their solar energy that was lower than their current retail utility rate. This initial project proved that the RC Cubed model would be successful in generating cost savings and energy savings for HSC and provided HSC with a win-win story to share with their donor base: not only was the organization saving energy and money, but it was doing so in an environmentally responsible manner that would ensure long-term program sustainability. Building off these successes, phase two of HSC’s partnership with RC Cubed includes a larger solar system on the roof of HSC’s main service building, which serves various needs of the homeless community. The building, owned by the City of Santa Cruz, was badly in need of a roof repair but neither the City nor HSC had the capital to invest in a new roof. With the second phase of the partnership, RC Cubed engaged an
investor who could benefit from the tax incentives for solar and HSC was able to include some of the cost of the roof replacement into the installation of the panels, allowing HSC to ensure they can continue using this facility to serve individuals in need, long into the future. HSC’s leadership in providing effective solutions, combined with RC Cubed’s impactful and innovative energy and financial solutions, assured that HSC’s positive impact on the community will continue to grow. The solutions provided by RC Cubed, including efficiency measures to reduce overall energy use as well as fixed and predictable monthly utility bills provided by the PPA, enables HSC to better plan for their financial future and ensure the services they provide for years to come.
“At RC Cubed we love to work with organizations like the Homeless Services Center to create total energy solutions for their needs. It is extremely satisfying to serve in ways that help fund a better and more just world!� - James Rector, RC Cubed Founder
the model
Energy Creation Solutions After achieving a plan for reducing and shifting your load, it is time to design an
Conservation Measures
energy creation solution that can help you
We continue by looking at simple energy
independence.
saving measures and management habits.
Consumption Analysis
Out of this step we emerge together with an action plan for reducing consumption.
RC Cubed starts by evaluating the energy
Some of the more common action steps
footprint of your building portfolios. This
include:
analysis helps us discover when, where, and how much energy you are using and allows
•
to achieve more with less energy. •
their energy management software or utility logins and we take care of the rest.
•
•
Evaluation of current site for production of on-site clean energy.
•
Evaluation of income / savings potential through energy production.
•
Avoided cost analysis based on production to validate savings.
•
Identification of the financing
HVAC upgrades that reduce kWh
mechanism needed to construct
usage through better performance.
solutions.
Passive lighting strategy to decrease
•
Solution design and engineering, permitting with local authorities,
Management solutions for timing
Construction management,
Online Site Review of the onsite
equipment startup and shutdown to
equipment testing, and long-term
energy infrastructure and major
shift load and reduce demand.
operations and maintenance of
Installation of energy reporting
solutions provided.
energy-using equipment. •
•
daytime usage of artificial light.
This step involves the following measures: •
This step involves these crucial steps:
watts and better lighting placement
us to create a map of your energy needs. Most partners simply provide us access to
LED lighting upgrades that use less
take a final step toward energy
•
•
Evaluation of kWh usage across each
technology that catches major and
meter.
minor energy leaks.
Evaluation of demand charges
•
Installation of Demand Management
across each meter.
Systems that can use batteries to shift
•
Evaluation of utility rate plans.
load and reduce cost.
•
Strategic plan to structure consumption in most efficient rate plan.
RC
Cubed provides a trusted network of expertise for building
owners, contractors, and financiers to collaborate on potential energy
Real Organizational Impact Our model provides significant benefits to the businesses, nonprofits, and other building portfolio owners with which we partner, including: •
Tax Savings—Regardless of your taxable status, we will find solutions that
solutions for building portfolios that
allow your project to benefit from tax savings such as the Solar Investment
include energy efficiency projects
Tax Credit (ITC) and Accelerated Depreciation.
coupled with solar installations.
•
operational costs than traditional fossil and nuclear fuels; most of our
RC Cubed’s simple and straightforward process helps organizations identify the right-sized
clients see a 10% or more savings over their current energy bills. •
will help them achieve their goals
increases and price variability. •
provide no upfront cost solutions that begin delivering savings for our clients right away by engaging financial partners that provide the initial investment. This is an extraordinary opportunity to maximize the value of every project.
Increased Investment—Your donors, investors, and partners will applaud your efforts towards energy conservation, efficiency, and environmental
without compromising their mission or budget. We are often able to
Price Stability—Our solar products allow you to budget for a fixed cost of energy into the future, removing uncertainty that comes with utility rate
energy solutions to provide optimal savings and qualify for financing that
Energy Savings—Renewable technologies like solar and wind have lower
responsibility. •
Increased Savings from Efficiency—We identify efficiency opportunities to generate upwards of 10% energy savings within organizational operations.
Project Finance Options
Power Purchase Agreements
RC Cubed will work with you to
A solar power purchase agreement (PPA) is a financial agreement where the
understand your energy
host customer/end user buys reduced cost energy from the project owner, who is
consumption fingerprint by
often a long-time solar investor. RC Cubed partners with investors to fund the
understanding how much energy
design, financing, and installation of a solar energy system on your property at no
you use across your building
cost to you. The power generated is then sold to you at a fixed rate that is lower
portfolios’ systems, when you use it,
than the local utility’s retail rate, resulting in direct savings to your organization.
and how much it costs. We help identify viable conservation measures that will result in immediate energy and cost savings. Following that, we work with you to create an energy solution that results in significant savings for your
PPAs typically range from a 20 to a 30-year agreement. The system owners/investor is responsible for the operation and maintenance of the system for the duration of the agreement. At the end of the PPA contract term, a customer can extend the PPA or purchase the system at a fair market rate. There are multiple benefits of a PPA to customers: •
organization within the first year. Multiple options exist for financing your project and we will work with
designing, procuring, and installing the solar PV system. The host customer begins saving money as soon as the system becomes operational. •
of your organization.
Reduced energy costs—Solar PPAs provide a fixed, predictable cost of electricity for the duration of the agreement, saving the customer more as
you to understand the financial products that best meet the needs
No or low up-front capital costs—We handle the up-front costs of
utility prices rise over time. •
Limited risk—The system owner, together with RC Cubed as the developer and project sponsor, are responsible for system performance and operating risk.
•
Potential increase in property tax value—The long-term nature of PPAs allows them to be transferred with the property and allows you invest in your property at little or no cost.
Other Financial Tools RC Cubed can work with you to find the model that will best serve your bottom line.
lease is available. With confirmation from your accounting firm, ownership can often provide the best long-term return on investment. RC Cubed’s process ensures you
Operating Lease Investments— Most
receive competitive pricing, a
operating lease investments normally
quality construction process, and the
run from 7-to-10-year terms, and the
best financing option for your
Lessor receives the lease payments
situation.
and the full stack of available tax credits for the term and then is bought out in the designated year. This model serves well when the energy using organization desires future ownership but is unable to utilize the tax benefits of solar.
Investment Tax Credits—The ITC reduces federal income taxes for qualified taxpayers based on capital investment in renewable energy projects. This credit is valued up to 30% of the qualified renewable investment. The ITC is a dollar-for-
Solar Purchase Options— For taxable
dollar reduction in the income taxes
entities, credit-strong organizations
that a person or company claiming
that can monetize the tax benefits of
the credit would otherwise pay the
solar, and municipalities and non-
federal government. This incentive is
profits desiring ownership of the
available until the end of 2020, with
system, debt finance in the form of a
additional stepdown incentives that
loan, capital lease, or municipal
are offered until 2024.
Getting Started RC Cubed makes it easy to get started with a simple and straightforward process. We will begin by reviewing your organization’s financial profile and building portfolio to determine the type of solar product most appropriate for you, as well as a study of the solar opportunities and options, both physical and financial, based on your local market. Following that, we will develop a detailed solar feasibility study with the intention to develop a solar contract that works for your organization. Finally, we will work with you to determine the solar construction and financial model that is the best fit for your organization and issue bids to qualified contractors and financiers depending upon your needs. We will provide full transparency throughout the process to ensure that your organization’s needs are met every step of the way. Ready to get started? Contact RC Cubed today. We’re ready to create a transformational energy solution for you!
The World Wide Web:
Electronic Mail:
Telephone:
www.RCcubed.com
info@RCcubed.com
508.459.8718
“RC Cubed Accelerates the Adoption of Avoidable Cost Technologies.” - The Team @ RC Cubed
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