Electricity at Timm’s Trucking in Morristown is now provided by the company’s new 30.5 kW Solar PV array, locking in today’s energy costs for years to come.
Business owner Randy Timm described the double benefit of installing a renewable energy system that was “not only good for the environment, but saved money on my electric bills and improved my bottom line.”
“I’d been looking at different ways to save money on some of our utility bills and solar seemed like a natural option,” said Timm, who knew there was money to be saved on this deal. “It just made sense. It adds value to the business and our building site.”
The solar project was financed through an innovative new Minnesota program called Property Assessed Clean Energy, or PACE. PACE is designed to advance adoption of energy efficiency and renewable energy for businesses, farms, multi-family housing, nonprofits, and places of worship, while helping these property owners invest in their assets. In October of 2016 the Rice County Board approved an agreement making this program available throughout Rice County. The Rice County program, called MinnPACE, is administered by the Saint Paul Port Authority.
PACE requires no up-front money and provides terms that let the energy savings pay for the investment. Project financing is repaid as a separate item on property tax assessments for a set period, usually over longer terms than a bank might allow, providing low-cost, long-term financing.
Timm commented on the unique advantage of PACE: “Financing through my property tax assessments keeps the debt off my balance sheet and my financial position strong.” This was an important consideration, Timm noted, since his business frequently purchases project bonds. Timm continued, “I felt like the PACE financing interest rate was favorable, and the process was fairly painless.” Also, unlike a loan, when a transfer of ownership of the property takes place, the PACE assessment obligation stays with the property, not the property owner.
Timm is also taking advantage of other available incentives to make his solar electric project cost effective. The federal Investment Tax Credit will reduce the price by 30% and the Xcel Solar Rewards program will pay a 10 year production incentive of 8 cents per kWh of electricity generated by his system. Timm has also applied for a USDA Rural Energy for America Program grant which could cover about 10% of the cost. He will find out later this year if he is selected, but felt the project “made sense for his cash flow” even without the grant.
“When I saw the spreadsheet and everything put together, it seemed like a no-brainer,” said Timm, who cited three major benefits: First, solar energy will reduce his utility costs, second, the addition will add value to his business’ building, and third, helping the environment.
Solar is not the only thing that can be paid for using PACE. In addition to renewable energy, building improvements such as HVAC upgrades, LED lighting, condensing boilers, digital controls, insulation, variable-frequency drive motors, building automation systems, and other water and energy conservation measures can be financed through PACE.