Nashua nonprofit looks to do energy upgrades for businesses
The recession and rock-bottom prices for natural gas have weakened the short-term financial case for switching to alternative energy, and an unusual Nashua program is finding that the two factors have had another effect: Making businesses reluctant to invest in energy efficiency, even when a large portion of the cost is covered.
“It has been hard getting commercial products going, so we have upped the incentives,” said Bob Eldredge, Nashua community manager for BetterBuildings, a nonprofit created by federal stimulus to spur energy efficiency in specific cities around the country by providing expertise and guidance, partnering with local firms and banks to provide services.
In New Hampshire, it operates in Nashua, Plymouth and Berlin.
“Companies are looking to shed their debt, not looking for cash outlays or changing things, even if there is long-term savings. They get into survival mode,” said Eldredge.
BetterBuildings has just increased the amount of rebates that it provides businesses which, when combined with grants from National Grid and Retail Merchants Association, can cover about half the cost for a mid-sized operation.
Also, Nashua Bank has announced a loan fund with up to $5.5 million available to cover energy improvements to commercial and residential buildings in the BetterBuildings program.
As an example of what can happen, Eldredge points to the historic downtown Landmark Building, also called the Odd Fellows Building, on the corner of Main and Temple streets in Nashua.
It underwent an $80,000 efficiency conversion, including switching from oil to natural gas heat and installing lots of insulation. The cost of the energy audit was covered as well as 50 percent of the installation costs.
When combined with low-cost business loans, made lower because BetterBuildings can “buy down” the interest rate by up to half, payback in terms of lower energy costs can happen in relatively few years, he said.
That argument has gotten more difficult in Nashua, where many homes and most businesses use natural gas, because the price of that fuel has plummeted as supplies have grown – U.S. production is at an all-time high – and the mild winter has lowered usage. Natural gas hit a decade-low price this week, and at $2.51 per 1,000 cubic feet is less than a third the price of five years ago.
For a firm using natural gas, cutting energy usage saves less money, making it harder to justify the up-front cost in tight times.
“Most businesses have a long-term understanding of the importance of reducing energy cost, minimizing the risk of changing energy costs in the future. But if they’re struggling to stay in business another year, it’s a harder sell,” said Eldredge.
Combined with that is concern that the benefits may be oversold.
“You get the concern: Just how accurate are these savings? Particularly in this mild winter – people say, I’ve got a lot of savings already. They don’t think that the weather will change and those savings will disappear,” he said.
Homeowners, facing an uncertain job market and falling home values, have also been tentative. BetterBuildings has participated in projects for about 30 homes.
“Some of them have had savings that are three times higher than the loan payments,” he said.
BetterBuildings was created out of a $10 million stimulus grant funneled through the New Hampshire Office of Energy and Planning. It seeks to increase energy efficiency by focusing on specific communities.
It doesn’t sell any services or products, but acts as a clearinghouse for information – among other things, it maintains a list of recommended contractors, some of whom have been dropped because of “shoddy work,” Eldredge said – and provides guidance and expertise to help homeowners and businesses decide whether and how to proceed.
Part of that expertise includes technical analysis of proposed changes, and guidance through a maze of financial incentives.
The Nashua office sticks to projects inside the city.
“I’ve heard from a few people that live in Merrimack and Hudson, frustrated they can’t participate,” said Eldredge.
It is possible that the program’s commercial offerings may be expanded to other parts of New Hampshire, officials said.
BetterBuildings started last summer and will wind up in 2013, regardless of whether all the money has been spent. That’s part of the reason incentives have been increased: “At the rate we were spending, we would not use all the funds.”
David Brooks can be reached at 594-6531 or email@example.com.