Opportunities for Federal, State, and Private Funding Assistance

Funding Your Green Project

Funding Your Green Project - 2 -

Table of Contents

Introduction:

Overcoming the Financing Hurdle ............................................................................................................................. 4

Success Story: The Hill Store in Belleville Pennsylvania ........................................................................................ 5

Types of Funding: ........................................................................................................................................................ 6

Tax Incentives ........................................................................................................................................................... 6

Example: Energy Efficient Commercial Business Deductions (Section 179D) .................................................. 6

Rebates ...................................................................................................................................................................... 6

Example: Duquesne Power and Light Energy Efficiency Rebates: .................................................................... 7

Grants ........................................................................................................................................................................ 7

Example: Small Business Innovation Research Grants ....................................................................................... 7

Loans ........................................................................................................................................................................ 8

Example: SBA 504 Loans: .................................................................................................................................. 8

Investors .................................................................................................................................................................... 9

Example: .............................................................................................................................................................. 9

Energy Service Companies and Leasing of Green Equipment ................................................................................. 9

Example: Renewable Energy Equipment Leasing (REEL) ................................................................................. 9

Renewable Energy Credits (RECs) ......................................................................................................................... 10

Example: Pennsylvania AEPS Alternative Energy Program ............................................................................. 10

Success Story: Ideal Self Storage ............................................................................................................................. 11

Resources for Finding Funding: ............................................................................................................................... 12

Bridgeway Capital .................................................................................................................................................. 12

DSIRE: .................................................................................................................................................................... 12

Duquesne Light ....................................................................................................................................................... 13

Pennsylvania Department of Community and Economic Development ................................................................. 13

Pennsylvania Department of Environmental Protection ......................................................................................... 13

Small Business Administration ............................................................................................................................... 13

Small Business Innovation Research (SBIR):......................................................................................................... 14

The Sustainable Energy Fund ................................................................................................................................. 14

Urban Redevelopment Authority ............................................................................................................................ 14

Success Story: McGinnis Special Foods Store ........................................................................................................ 15

10 Tips for Funding Your Green Project: ............................................................................................................... 16

Success Story: Geochemical Testing ....................................................................................................................... 18

Bibliography: ............................................................................................................................................................. 19

Funding Your Green Project - 3 -

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The Center for Green Industries and Sustainable Business Growth is supported in part by the U.S. Economic

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© 2014 by the Center for Green Industries and Sustainable Business Growth of Duquesne

University, Pittsburgh, PA.

Funding Your Green Project - 4 -

Overcoming the Financing Hurdle

Green project planning can be stressful! The variety of funding sources can be overwhelming

and many businesses miss out on opportunities to complete, or even start, green projects because

they are unaware of the funding options available to them. This guide is intended to remove

stress from the process and provide a resource for discovering opportunities to make your green

project financially viable.

This guide describes several sources of funding, provides advice for receiving funding and

provides resources for accessing funding. It is intended to give a general overview of funding

available and provide guidance towards the funding that best fits the needs of your business.

A difficulty associated with writing a guide on finding funding is that sources are frequently

changing. A great deal of funding is available through government and community

organizations and as government policies and the economy changes, the funding changes as well.

Incentives, especially those sponsored by, state and local governments and utilities are in a

constant state of change, and may have expiration dates or application deadlines. Therefore,

some independent research is recommended, in order to discover eligibility requirements and

guidelines. This guide provides you with easy access to these resources.

Funding Your Green Project - 5 -

Success Story: The Hill Store in Belleville Pennsylvania

In 2004 Tom and Ann McNabb purchased an 1853 general store with plans to refurbish it and

open The Hill Store, in Belleville, Pennsylvania. The couple began searching for funding for

several expensive projects including installing a new, more efficient boiler and adding

centralized air to the building. Tom contacted the Penn State Small Business Development

Center Environmental Management Assistance Program where an Environmental Specialist

recommended various state funding opportunities. Tom was awarded the PA Small Business

Advantage Grant through which he was reimbursed half of the cost of his energy efficiency

upgrade, a $500 rebate for his heating system upgrade as well as a second $500 Appliance

Rebate. Tom also applied for the PA Advantage Grant and received $7,400. With money from

their grants, the couple also decided to install insulation to improve the building’s energy

efficiency. By the end of the summer of 2007 the building had 2 tenants. The McNabbs have

seen savings of $5,179 annually and the payback period for their energy-savings project was

only 9 months!1

1 “Energy Efficient Upgrades to Store in Amish Community.” Penn State Small Business Development Center. 2008.

http://www.sbdc.psu.edu/files/2008_EMAP_Success_Story_-_Hill_Store.pdf

Funding Your Green Project - 6 -

Types of Funding:

This section of the guide is intended to introduce you to types of funding available to

small businesses. This section defines types of funding and provides examples to understand

how these funds can be utilized.

Tax Incentives

Both state and federal governments utilize tax incentive options in the form of

deductions, credits, and rebates2 to encourage businesses to invest in renewable energy and

energy efficiency projects.3 The American Recovery and Reinvestment Act of 2009 provides tax

incentives for a wide variety of projects.4 These incentives can be utilized to reduce the cost of

energy efficiency projects, renewable energy, green building, and alternative fuel projects among

other things. Many green building projects are also eligible for depreciation deductions, which

allow for accelerated depreciation of energy property.5 Businesses can access IRS databases

6 or

consult with their tax preparer to apply for these incentives.

Example: Energy Efficient Commercial Business Deductions (Section 179D)

One example of a federal tax deduction is the Energy Efficient Commercial Business Deduction.

Using this deduction, businesses can deduct up to $1.80 per square foot of space in new or

existing buildings when they reduce power usage by 50% compared to a reference building by

installing interior lighting, HVAC or hot water systems, or building envelope property. A $0.60

per square foot deduction is available for certain lesser reductions.7

Rebates

As of 2013, the Database of State Incentives for Renewable Energy (DSIRE) had

documented 20 rebate programs for green projects, administered by state or local utilities for

Pennsylvania alone. Rebates for your green project are also available from local and federal

governments. The Department of Energy’s Office of Energy Efficiency offers rebates for the

installation of solar photovoltaic technology, solar water heating, wind systems, and biomass

power systems. Sources offer two types of rebates. The first is for the purchase price of green

2 Starbuck, Steve, Paul Naumoff, and Dominick Brook. Working Together: Linking Sustainability and Tax to Reduce the Cost of

Implementing Sustainability Initiatives. YY2654 Vol. Ernst and Young, 2012. Print. 3 “Understanding the Section 179D Federal Energy Tax Deduction.” Cherry, Bekaert,& Holland, CPAs and Consultants. 2012.

http://blogs.cbh.com/midmarket/?p=1287 4 Waxer, Cindy. "Get Tax Breaks for Going Green." ProQuest Science Journals 44.4 (2010): 28-9. Print. 5 Cook Jr., David R., and Roland F. Hall. "Financing ENERGY EFFICIENCY Initiatives." Financial Executive 27.2 (2011): 16-

9. Web

Cosmo Jr, Vito A. "States Provide Tax Incentives for Investing in Alternative/Renewable Energy Products." Journal of State

Taxation 29.6 (2011): 11-64. Web. 6 "IRS: Credits and Deductions." irs.gov. 1/1 2013.Web. <http://www.irs.gov/Credits-&-Deductions 7 "Green Tax Incentives and Credits for Businesses and Individuals." Grant Thornton. 2010.Web.

<http://www.grantthornton.com/staticfiles/GTCom/Tax/Corp-SFTS%20files/GreenTaxCreditsWhitepaper2010.pdf>.

Funding Your Green Project - 7 -

equipment and the second is for the performance of this equipment.8 These rebates vary from

state to state. In Pennsylvania Duquesne Power and Light provides rebates for the purchase of

CFL bulbs and Energy Star certified appliances9 and Philadelphia Gas Works provides rebates

for larger projects, which improve natural gas efficiency for businesses.10

Example: Duquesne Power and Light Energy Efficiency Rebates:

One specific rebate offered by Duquesne Power and Light in Western Pennsylvania is a

$75 rebate for the installation of exterior lighting with a timer. Duquesne Power and Light also

offers rebates for hundreds of efficient light fixtures and other commercial appliances, which

improve efficiency. These rebates have a fairly simple application process and typically take

three months at most to receive.11

Grants

Companies interested in green projects can apply for grants from several government

sources including the U.S Environmental Protection Agency,12

The Small Business

Administration,13

The Economic Development Administration14

and the U.S Department of

Agriculture.15

These grants are available for numerous projects including green product

development, creation of jobs in green fields, green innovation, improving energy efficiency,

development and usage of renewable energy, and research and development.16

Grant funding is

unique in that it is usually awarded with the intent that it be spent on a specific project. Grant

applicants are required to write a project proposal and then track and report all funds spent.

Receiving grant funding does require some additional work, however in the long-term it can be

rewarding as it does not have to be repaid and often can be a source of funding year after year.17

Example: Small Business Innovation Research Grants (SBIR)

The U.S Department of Energy has an annual small business grant dedicated to the

research and development of green products. This grant includes three phase lasting one year

8 Lantz, Eric, and Elizabeth Doris. State Clean Energy Practices: Renewable Energy Rebates. NREL/TP-6A2-45039 Vol. Golden,

Colorado: National Renewable Energy Laboratory, 2009. Print. 9 "Watt Choices For Your Business." Duquesne Power and Light. 12/30 2012.Web.

<https://www.duquesnelight.com/wattchoices/default.cfm?tab=2&win=main>. 10 "Pennsylvania Philadelphia Gas Works: Residential and Commercial Construction Incentives Program."DSIRE: Database of

State Incentives For Renewables and Efficiency. 12/13/2012 2012.Web.

<http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=PA83F&currentpageid=3&EE=1&RE=1>. 11 "Watt Choices." Duquesne Power and Light. 1/1 2013.Web.

<https://www.duquesnelight.com/wattchoices/default.cfm?tab=2&win=main>. 12 "Small Business Innovation Research Program." United States Environmental Protection Agency. 1/1 2013.Web.

<http://www.epa.gov/ncer/sbir/>. 13 "Loans and Grants." SBA.gov. 2012.Web. <http://www.sba.gov/category/navigation-structure/loans-grants>. 14 "Green Growth: Environmentally-Sustainable Economic Development." E.D.A: U.S Economic Development Administration.

2012.Web. <http://www.eda.gov/pdf/GreenGrowthOverview.pdf>. 15 "United States Department of Agriculture: National Institute of Food and Agriculture: Grants." United States Department of

Agriculture: National Institute of Food and Agriculture. 8/9 2012.Web. 16 "Green Growth: Environmentally-Sustainable Economic Development." E.D.A: U.S Economic Development Administration.

2012.Web. <http://www.eda.gov/pdf/GreenGrowthOverview.pdf>. 17 Nance-Nash, Sheryl. "Seeking Seed Money." Black Enterprise 35.10 (2005): 88-97. Web.

Funding Your Green Project - 8 -

each. These phases include; proposal writing, training and award of the grant. This grant can be

awarded for up to $1,000,000 upon completion of all three phases. These grants are only

awarded to independently owned small businesses (defined as having less than 500 employees)

interested in conducting research.18

Loans

Traditional mainstream loans are available for green projects and are becoming more and

more commonplace. There are also a variety of state, local, and federal government loans

dedicated specifically to green projects for small businesses. In 2012 alone the federal

government issued $3.6 billion to 70 development organizations nationwide. In most of these

cases the government has partnered with private banks such as PNC Bank in order to distribute

these funds.19

Small Business Administration offices are also involved in the distribution of

government loans.20

Several private banks also provide additional loans specifically for green projects. Since

2005, Wells Fargo, PNC, and Bank of America have all set aside funding specifically for

businesses interested in conducting green projects.21

While most microfinance loans are typically dedicated to new entrepreneurs in

developing communities,22

there are also specific microfinance companies, which target

businesses looking for small loans to fund green projects.23

Example: SBA 504 Loans:

The United States Small Business Administration 504 Loan program allows small

businesses to benefit from loans as well as for the development of local economies. In this

program the SBA partners with banks. The SBA provides loans for up to 40% of the total

project costs and the bank provides up to 50%. The business owner is then required to fund 10-

20% of the total project costs. These loans benefit the business because they allow for longer

loan amortization and fixed interest rates.24

18 "SBIR/STTR: Small Business Innovation Research, Small Business Technology Transfer." 2012.Web.

<http://www.sbir.gov/applicants>. 19 Mauriello, Tracie. "Federal Tax Credits should Bring Projects to Region." Pittsburgh Post Gazette, sec. Business: B-1. 2/25

2012. Print. 20 "Loans and Grants." SBA.gov. 2012.Web. <http://www.sba.gov/category/navigation-structure/loans-grants>. 21 Korda, Peter J., Sean M. O'Brien, and Robin J. Gotshall. "Green Lending: An Evolving Industry." Real Estate Finance Journal

25.2 (2009): 46-50. Web. 22 Kaufman, Rachel. "10 Top Microfinance Companies." CNN, sec. CNN Money:July 15 2011. Print. 23 "Green Microfinance: Publications." greenmicrofinance.org. 1/1 2013.Web.

<http://www.greenmicrofinance.org/Activities/GMf-Publications/GMf-Publications>. 24 "SBA Loan Programs." 1/1 2013.Web. <http://www.sba.gov/content/cdc504-loan-program>.

Funding Your Green Project - 9 -

Investors

Investors in the last few years have begun to pay more attention to a company’s green

initiatives. Impact investors often will be more likely to invest in a company in order to support

their green projects.25

A venture partner also can often provide resources in addition to financing,

such as research and marketing connections to a smaller or start up business that they would

often otherwise not have access to.26

Example:

Bridgeway Capital is a resource for businesses to find many sources of funding, however

one specific service provided by this group is connecting small businesses with investors.

Specifically Bridgeway Capital works with investors who are interested in community

development.27

Energy Service Companies and Leasing of Green Equipment

There are several options available for businesses who are interested in utilizing green or

energy efficiency equipment, but are hesitant to make the initial investment. An energy service

company (ESCO) specializes in managing the process of developing, installing, and financing

energy efficient equipment. Businesses then use their energy savings to make repayment on

their financing. Most ESCOs also assume the risk in the case that the equipment does not

decrease energy costs for the business.28

A second option is for businesses to lease green or energy efficient equipment. Leases

are available from private companies for green transportation, electrical and lighting equipment,

alternative energy equipment, power equipment, manufacturing equipment, and even commercial

real estate. Businesses that lease equipment also are able to update this equipment more often

and avoid using obsolete equipment.

Example: Renewable Energy Equipment Leasing (REEL)

REEL assists businesses with finding energy efficiency equipment for lease and fund these

leases. REEL connects businesses with everything from commercial real estate, to the leasing of

green buildings, to photovoltaic equipment.29

25 Stern, Gary M. "Impact Investing." Financial Planning 41.9 (2011): 66-72. Web. 26 Ivanov, Vladimir and Xie, Fei. "Do Corporate Venture Capitalists Add Value to Start-Up Firms? Evidence from IPOs and

Acquisitions of VC-Backed Companies." Financial Management (2010): 129--152. Print. 27

"Bridgeway Capital: Green Loans." Bridgeway Capital. 2013.Web. <http://www.bridgewaycapital.org/pages/green-loans>. 28 "Resources: What is an ESCO?" NAESCO: National Association of Energy Service Companies. 2011.Web.

<http://www.naesco.org/resources/esco.htm>. 29 "REEL: Renewable Energy Equipment Leasing." Think REEL Green: Renewable Energy. 1/1 2013.Web.

<http://www.thinkreelgreen.com/page.php?page=ourProductsAndServices>.

Funding Your Green Project - 10 -

Renewable Energy Credits (RECs)

A company that invests in the generation of renewable energy, for example solar or wind energy,

has the option to sell renewable energy credits. One REC is equal to 1000-kilowatt hours, or 1-

megawatt hour of electricity placed on the grid.30

These credits vary in value based on

government environmental policies as well as the economy.

Additionally, companies that produce more energy than they use have the option to sell energy to

their local electricity provider. In Pennsylvania, Duquesne Power and Light installs a net meter

at no cost to the customer, which monitors electricity generated and added to the power grid.31

Example: Pennsylvania AEPS Alternative Energy Program

An example of a REC available in Pennsylvania is the Pennsylvania AEPS Alternative Energy

Program. This program connects businesses and residents who are generating their own energy

with programs that will purchase renewable energy credits. These credits range in value but the

average value of a credit for 2012 is $180.39.32

30

"Renewable Energy Certificates (RECs)." The United States Environmental Protection Agency. October 16 2012.Web.

<http://www.epa.gov/greenpower/gpmarket/rec.htm>. 31 "Customer Generation." Duquesne Light . . . Our Energy, Your Power. 2012.Web.

<https://www.duquesnelight.com/forYourBusiness/SaveEnergyAndSaveMoney/CustomerGeneration.cfm>. 32

"Pennsylvania AEPS Alternative Energy Credit." Pennsylvania PUC. 2012.Web. <http://paaeps.com/credit/pricing.do>.

Funding Your Green Project - 11 -

Success Story: Ideal Self Storage in Hummels Wharf,

Pennsylvania

Ideal Self Storage is a storage facility located in Hummels Wharf, PA that provides clean, secure

storage units. Gerald Stauffer and Dennis Brubaker, joint partners of Ideal Self Storage, were

seeking to install a 15.12 kW solar photovoltaic (PV) system to provide electricity at their

facility. This system would be interconnected with the electric grid utility.

Gerald and Dennis contacted the Pennsylvania Small Business Development Center’s (SBDC)

Clean Technology Resource Center (CTRC) to help start cutting utility costs. The CTRC

Technology Consultant made several recommendations about ways energy costs could be

reduced. After carefully reviewing their options, Gerald and Dennis worked with a contractor

who drew up a plan to install a 15.12 kW solar PV system. The solar PV system will produce up

to 1,233 kWh of power per month offsetting a portion of the 3,591 kWh of power provided by

the utility company. The solar PV project was estimated to cost about $67,247. However, in

order to complete this project, Gerald and Dennis needed funding assistance to offset the cost.

Once again Gerald and Dennis contacted the PA SBDC CTRC Technology Consultant for

assistance with funding opportunities for their solar PV project. The CTRC Technology

Consultant informed Gerald and Dennis of the U.S. Department of Agriculture (USDA) Rural

Energy for America Program (REAP) Grant, the PA Department of Environmental Protection

(DEP) Sunshine Grant, Federal Tax Incentives, and Solar Renewal Energy Credits

(SRECs). Gerald and Dennis applied for and were awarded a USDA REAP Grant for the amount

of $13,499. Their solar installer assisted them with the PA Sunshine Grant for the amount of

$10,060, and their CPA helped them receive the federal tax credit for the amount of

$20,173. Ideal Self Storage has plugged in their solar PV project and it is currently generating

electricity!

Through the innovative and proactive approach towards achieving greater energy efficiency,

Gerald and Dennis have demonstrated a commitment to the public’s best interest. With limited

renewable fuel resources, every effort made to reduce energy consumption helps ensure that

there is some left for future generations.33

33 "Solar Energy for Self Storage." Pennsylvania SBDC: Success Stories. 2012.Web. <http://www.pasbdc.org/success-

stories/2013/03/11/solar-energy-for-self-storage>.

Funding Your Green Project - 12 -

Resources for Finding Funding:

The previous section was intended to assist you in understanding the wide variety of types of

funding. Next, it is important that you know what resources are available to assist with finding

this funding and with the application process.

While the majority of the sources listed below are limited to Pennsylvania, it is important to

know that most states have similar resources. These resources can be found through the DSIRE

database, as well as through the United States Small Business Administration.

Bridgeway Capital

Bridgeway Capital is a non-profit organization in the Pittsburgh area, which is committed to

stimulating economic development through providing loans for small businesses. Bridgeway

also provides green loans for energy efficiency and green building projects34

. Bridgeway Capital

can be found at: www.bridgewaycapital.org

DSIRE:

DSIRE is a comprehensive database for finding funding. DSIRE allows the user to

search for funding, state-by-state and even by specific cities. It provides information on grants,

loans, rebates, tax incentives, and energy credits both private and government funded. This

database also provides an extensive library on renewables and information on applying for

funding. DSIRE can be found at: http://www.dsireusa.org/.35

34

"Bridgeway Capital: Green Loans." Bridgeway Capital. 2013.Web. <http://www.bridgewaycapital.org/pages/green-loans>. 35 "DSIRE: Database of Energy Incentives for Renewables and Efficiency." 1/1 2013.Web. <http://www.dsireusa.org/>.

Funding Your Green Project - 13 -

Duquesne Light Duquesne Light provides a wide variety of sources for both businesses and residents of

Western Pennsylvania to fund green projects. The utility provides rebates for energy efficiency

equipment and directs businesses towards other sources of funding including loans and grants.

Many other regional utilities provide similar resources. Duquesne Power funding information

can be found at:

https://www.duquesnelight.com/wattchoices/default.cfm?tab=2&win=main36

Pennsylvania Department of Community and Economic Development

The Pennsylvania Department of Community and Economic Development provides a wide

variety of resources for small businesses, including loans and other sources of funding.

Specifically for green projects, The Pennsylvania Department of Economic Development has

their Pollution Prevention Assistance Account Program (PPAA). This account provides funding

for energy efficiency and pollution prevention projects and will provide loans for up to 75% of

the costs of the project up to $100,000 for small businesses of 1ess than 100 employees37

. The

Pennsylvania Department of Economic Development can be found at: www.newpa.com

Pennsylvania Department of Environmental Protection

For businesses within the state of Pennsylvania, The Pennsylvania Department of Environmental

Protection provides businesses access to project funding from both state and federal government.

This source provides access to grants, loans, as well as financial planning tools for projects. This

can be found at:

http://www.portal.state.pa.us/portal/server.pt/community/funding_opportunities/10488.38

Several other states also have web pages for their departments of environmental protection which

direct businesses to sources of fund.

Small Business Administration

The United States Small Business Administration (SBA) is also a source for businesses to find

funding for their green projects. While SBA is not a direct lender to businesses, this

administration does assist small businesses with gaining access to grants and loans. Links to this

36 "Watt Choices For Your Business." Duquesne Power and Light. 12/30 2012.Web.

<https://www.duquesnelight.com/wattchoices/default.cfm?tab=2&win=main>. 37

"Pollution Prevention Assistance Account Program (PPAA)." The Pennsylvania Department of Community and Economic

Development. 1/1 2013.Web. <http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/pollution-

prevention-assistance-account-program-ppaa 38 "Pennsylvania Department of Environmental Protection: Funding Opportunities." 2013.Web.

<http://www.portal.state.pa.us/portal/server.pt/community/funding_opportunities/10488>.

Funding Your Green Project - 14 -

data can be found at: http://www.sba.gov/category/navigation-structure/loans-grants.39

The SBA

also has state offices to assist businesses with receiving SBA funding.40

Small Business Innovation Research (SBIR):

The United States Environmental Protection Agency connects small businesses interested in

conducting research with several sources of funding including investors, grants and loans, mostly

for the funding of research. SBIR can be accessed at http: //www.sbir.gov/41

The Sustainable Energy Fund The Sustainable Energy Fund exists to provide financial aid to small businesses and other

organizations seeking to reduce their energy consumption. This funding is provided primarily in

the form of loans. The Sustainable Energy Fund also provides education to organizations on

methods for reducing energy consumption. The Sustainable Energy Fund can be found at:

http://www.thesef.org. 42

Urban Redevelopment Authority

The Urban Redevelopment Authority is a resource for Pittsburgh businesses to gain resources

necessary for success. Specifically for green projects, the Urban Redevelopment Authority

offers small grants for energy audits as well as financing for energy efficiency projects. The

Urban Redevelopment Authority can be found at: www.ura.org/43

39 "SBA.gov: Loans and Grants." 1/1 2013.Web. <http://www.sba.gov/category/navigation-structure/loans-grants>. 40 "SBA.gov: Philladelphia District Office." The United States Small Business Administration. 1/1 2013.Web.

<http://www.sba.gov/about-offices-content/2/3141>.

41 "SBIR/STTR: Small Business Innovation Research, Small Business Technology Transfer." 2012.Web.

<http://www.sbir.gov/applicants>. 42 "About SEF." Sustainable Energy Fund. 2013.Web.

<http://www.thesef.org/CMS/Programs/AboutSEF/tabid/59/Default.aspx>.

43 "URA- The Urban Redevelopment Authority of Pittsburgh." 2013.Web. <http://www.ura.org>.

Funding Your Green Project - 15 -

Success Story: McGinnis Special Foods Store in Pittsburgh

Pennsylvania

Ms. Noreen Campbell and her two sisters own and operate McGinnis Special Food Stores, a

family owned business since 1946. In 1981 the three sisters, Bonnie, Sharon, and Noreen

assumed full ownership of the company with three locations in two counties just outside the City

of Pittsburgh. McGinnis Sisters is a well known grocery store providing high standards for

quality, competitive pricing and excellent service.

In 2008 Noreen attended an energy workshop sponsored by the DEP. She met Lee Ann Briggs,

environmental consultant with the University of Pittsburgh Small Business Development

Center’s (SBDC) Environmental Management Assistance Program (EMAP). Ms. Campbell was

interested in upgrading the then existing T-12 fluorescent lighting fixtures with magnetic ballasts

and incandescent lighting fixtures to high efficiency T-8 fluorescents with electronic ballasts and

CFL throughout their 20,000 SF Monroeville facility.

The SBDC was instrumental in informing Ms. Campbell of the potential opportunity available to

her through the Department of Environmental Protection’s Small Business Advantage Grant

(SBAG). The environmental consultant assisted Ms. Campbell with completing the grant

application. In October 2008, DEP awarded McGinnis Sisters their requested full eligible

amount of $7,500.

Installation activities were completed in the fall of 2008. The total project cost was $20,124.

McGinnis Sisters committed to pay $12,624.

Upgrading the T-12 fixtures and incandescent to T-8 fixtures and CFL, respectively will result in

an annual savings of approximately 88,585 kWh of electricity or $7,643. These savings along

with the grant will provide a payback in 1.6 years. In addition to the savings on kWh and

associated economics, the upgrade will result in emissions reductions of 70.17 tons annually.

Monies received from the grant provided the McGinnis Sisters the opportunity to put additional

capital into other important upgrades, such as new high efficiency Energy Star® qualified

HVAC units illustrating that energy savings do in fact have a multiplier effect.

Lighting upgrades will save the McGinnis sisters $7,643 annually. 44

44 "McGinnis Special Foods Store." Pennsylvania SBDC: Success Stories. 2012.Web. <http://www.pasbdc.org/success-

stories/2013/03/11/solar-energy-for-self-storage>.

Funding Your Green Project - 16 -

10 Tips for Funding Your Green Project:

In the journal GreenBiz.com, Shari Shapiro writes the following ten tips for receiving funding

for your green project:

1. Find a bank or financial institution committed to green projects. Many banks now have

financial arms that are dedicated to financing renewable projects.

2. Pick a model. It's easier to tweak an existing project finance model than to create a new one

from scratch. Construction? Equipment?

3. Recognize the need for tweaks. Whatever the model (see No. 2), it will need to be tweaked

for the unique features of green building and renewable projects.

4. Set out the deal terms in advance, particularly the obligations of the parties in the event of

default.

5. Identify and address the roles of the lender and borrower with respect to any incentives or

other government financing that is part of the project. Each incentive has its own requirements

regarding transferability and assignment, and ownership status is often an important factor.

6. Make sure your green project pencils out. Seems simple and obvious, but when seeking

financing, it is important that the project actually be a wise investment.

7. Provide as much data about the beneficial financial features of the green project as

possible. The growing body of data about the financial benefits of green buildings and the

balance sheets of renewable energy projects should enable borrowers and lenders to better

evaluate the risks and benefits of green projects.

8. Where available, use green specific financing tools, like energy efficient loans.

9. Be prepared to cross-collateralize. There is so much risk aversion that many financial

institutions seek cross-collateralization of non-green projects to alleviate the fear, real or

imagined, associated with financing green projects.

10. Acknowledge a longer financing timeline. Getting all parties on the same page regarding

the financing deal and the documentation may take longer than traditional projects. But, as

lenders and borrowers get more projects under their belts, this timeline will shorten.

Funding Your Green Project - 17 -

Shapiro also writes that banks and other lending institutions often do not yet have

structures in place for funding green projects. For this reason, businesses requesting loans for

green projects often have to go into much greater detail when writing a business proposal for

funding. Oftentimes, businesses searching for funding for a green project will have to seek a

variety of different types of funding, for example rather than paying for a project only using loan

funds, a business may need to add grant funds and rebates as well in order to fund the project. 45

45 Shapiro, Shari. GreenBiz.com. 1/20 2011.Web. <http://www.greenbiz.com/blog/2011/01/20/top-10-rules-green-project-

finance>.

Funding Your Green Project - 18 -

Success Story: Geochemical Testing in Loretto, Pennsylvania

In the summer of 2008, Tim Bergstresser bought Geochemical Testing, along with all the

buildings and ancillary equipment associated with the business. Eager to continue the

company’s success, Tim was interested in making energy improvements to his office space and

laboratory. In particular, he was looking to convert to one large walk-in from his less efficient

multiple double-door bottle coolers and small walk-in cooler by consolidating his analytical

sampling cooling capacity.

Upon a recommendation from his business consultant at the Saint Francis University Small

Business Development Center (SBDC), Tim went to SBDC’s EMAP program, for advice.

After conducting an on-site energy assessment, the consultant suggested he make other upgrades

in addition to cooler consolidation, including the installation of high efficiency lighting fixtures,

occupancy sensors, LED exit signs, and programmable thermostats.

In addition to providing valuable input, the program was also instrumental in informing

Bergstresser about opportunities that were available to him through the Department of

Environmental Protection’s (DEPs) Small Business Energy Efficiency Grant (SBEEG), a

program that provides 25 percent matching grants of up to $25,000 for eligible projects.

Through SDO’s assistance, Bergstresser submitted the SBEEG grant application, focusing solely

on the purchase and installation of a new larger walk-in cooler. Bergstresser’s SBEEG grant

application request for $18,247 was approved in the fall of 2009, with the total project costing

$72,986.

The upgrade to the more efficient and larger walk-in cooler results in annual savings of over

18,120 kWh of electricity and over $1,800 savings in annual costs. In addition to the

conservation of electricity and business costs, the upgrade also reduces emissions by over 14

tons over the course of a year.46

46 "Geochemical Testing." Pennsylvania SBDC: Success Stories. 2012.Web. <http://www.pasbdc.org/success-

stories/2013/03/11/solar-energy-for-self-storage>.

Funding Your Green Project - 19 -

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