EMPEQ Multi-City Pilot Investment Program for Energy Efficiency Installations
EMPEQ (Empower Equity) is launching a multi-city pilot investment campaign in order to educate the marketplace and to increase the scalability of energy efficiency installations in the United States.
Background: Changes to Accounting Standards
Recently, the Federal Accounting Standards Board (FASB) has determined that—starting in 2018 for publicly traded corporations—all business entities will be required to report all operating lease liabilities on their balance sheet.
We strongly believe this rule change will have devastating consequences for the energy efficiency industry.
Why do we believe this? Because—before FASB’s ruling—an operating lease allowed companies to make energy efficient upgrades off without having to record a liability on their balance sheet.
Reporting greater liabilities can have a negative impact on an organization in multiple ways including limitations in lending opportunities, decreased attractiveness to investors, and even increases to their cost of capital.
You may have heard terms for off-balance sheet financing in the energy industry, such as Energy-as-a-Service (EaaS), Infrastructure-as-a-Service (IaaS), or Lighting-as-a-Service (LaaS). However, the majority of these energy companies were utilizing operating leases to create a branded off-balance sheet financing mechanism to finance the energy efficiency project.
Many climate-change minded companies—and even those purely motivated by monetary considerations—used operating leases to finance energy efficient upgrades to their buildings…off their balance sheet.
It was a win-win for everyone.
Fast Forward to Today
Despite the new challenges created by FASB’s changes…
We at EMPEQ are stepping up our efforts to keep up with the momentum of commercial energy efficiency upgrades in the U.S. with a groundbreaking financial solution advocated by the Harvard Business Review earlier this summer.
Using our proprietary UnFinancing℠ process, based on our Simple Energy Subscription℠ (SES), EMPEQ is targeting specific cities—and local resources within those cities—for partnership in order to deploy a $20 million pilot investment per city.
What Does the UnFinancing Process Entail?
By partnering with local cities and resources, we will be hiring local contractors to upgrade local buildings to make these buildings much more energy efficient—all at no upfront cost to the building owner.
PLUS, we hire back the same contractor to provide ongoing maintenance over the life of the SES℠ service contract, providing residual revenue to local companies.
The best part is we can do all of this while still saving the building owner money on their utility bills—starting DAY 1.
This may sound too good to be true—in part due to the reduction in prices of ever-improving energy efficient technologies—but this opportunity is as real as it gets, as shown in the chart below:
Please Join Us in This Goal
We are looking for reputable energy efficiency contractors and regional economic development minded people to take part in these pilots.
EMPEQ will commit to investing $20m in SES service contracts in each market we are targeting.
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