The commercial buildings sector has seen an increase in retrofit projects as building owners and managers have determined that energy-efficient upgrades result in substantial cost savings and improved property performance. However, small businesses, houses of worship and low-income housing in underserved communities—buildings in dire need of energy upgrades—face many obstacles to securing financing for retrofit projects. BlocPower, funded through the U.S. Department of Energy (DOE), is revolutionizing how buildings within these communities obtain and allocate funding for energy upgrades, and has even garnered praise from former President Bill Clinton.
Aggregating to get things moving
BlocPower’s CEO and co-founder, Donnel Baird, and his partners determined that the best way to facilitate financing opportunities for distressed properties in low-income communities was to approach lenders and investors with large projects composed of bundles of smaller projects. The unique mechanism allows for an increase in size, improved performance resulting from a diverse pool of projects and decreased risk, and ultimately makes the aggregated “bloc” a more viable funding opportunity.
Often, part of the reason behind denial of a loan is that single projects in these communities are too small and carry too much risk. BlocPower's team rigorously evaluates each project's financial history and energy consumption prior to inclusion in an aggregate. The financial analysis provides insight into the level of fiscal responsibility of each project, as well as the likelihood of loan repayment.
BlocPower also engineers conduct a comprehensive energy audit of each property. Both the financial and engineering analysis help to decrease risk across the aggregate by addressing two important components: opportunities to offset potential default by some borrowers with timely payments from others and a plan for allocation of funding. Aggregating also allows BlocPower’s team to strengthen their pitches to more diverse investors, with those interested in providing capital able to get involved through an online platform.
Retrofitting for energy efficiency and community engagement
- BlocPower has a number of projects in the works, the most recent of which was highlighted by Mayor Kasim Reed of Atlanta and the Clinton Global Initiative as a part of the City of Atlanta’s Commitments to Action. The Historic Ebenezer Baptist Church will work with BlocPower, the Southeast Energy Alliance, the Center for Sustainable Communities and Green Faith to conduct a comprehensive energy audit of Ebenezer’s worship, educational and community buildings to recommend energy savings and solar generation methods. The program will also educate Ebenezer’s congregants on how to implement energy efficiency at home.
- After an energy audit, BlocPower determined that the St. Simon Stock School’s lighting fixtures and products were severely inefficient and resulted in high energy bills, and successfully completed a project in collaboration with the school’s facilities staff. St. Simon was able to reduce its electricity consumption by over 6,000 kWh, allowing for reallocation of savings to fund children of the Bronx with exceptional resources and educational experience.
- In Brooklyn, New York, BlocPower is working to restructure a 60-building public housing project. The project is located in the lowest-income neighborhood in Brooklyn—Brownsville—and is at risk of rolling blackouts. Although solar array systems are notoriously challenging to install in New York due to the roof-to-building ratio size, this particular project will boast specially designed solar panels and large batteries to store electricity. The community will be trained on how to operate the solar array and battery systems themselves.
Buildings in underserved communities face more challenges because of their age and initial construction style, and the problem is severely compounded by years of foregoing necessary repairs, improvements and investments in clean energy technologies. These issues contribute to financial strain on property owners, with energy bills representing as much as 30 percent of the overall budget. The BlocPower team is working to ensure that the opportunity represented by these communities is leveraged as both a means to decrease energy consumption and to educate local communities on the impact of clean energy.