Build Sustainably — for Business Success and a Livable Future

Editor’s Note: This report was prepared before the IPCC released part 1 of the Sixth Assessment Report on August 9. That report confirms the urgency of the interns’ recommendations!

This is one of three reports prepared by the team; it is complemented by ‘Implementing Bethlehem’s CAP‘ and ‘Climate Change Education‘. All 3 reports are also available in complete PDF versions:

Introduction

Developers have the potential to guide some of the most influential changes to reduce climate change. LEED-certified buildings create an 8–10% increase in asset value and increase occupancy rates, so not only are these projects good for communities and the planet, they have a higher return on investment as well.

Buildings account for 50% of city greenhouse gas emissions in Bethlehem. With the upkeep and management of buildings representing such a large share of emissions, it means t in here is great potential for innovative approaches and technologies. In the coming decades, green building will become the norm and standards will keep progressing, as seen with the growth of LEED and Living Building Challenge. The Bethlehem Climate Action Plan (CAP) calls for a 33% reduction in emissions by 2025 and 60% by 2030. Our research shows many opportunities for development and contracting to become more efficient and sustainable.

In this fact sheet, we want to help bridge the gap to the future of development. We provide resources for special financing for clean energy projects, as well as information on ways companies around the globe have made their processes and projects more sustainable.

Sustainability & Higher Return on Investment (ROI)

Qualities like lower energy bills, better air quality, daylighting, and safe, toxin-free materials are marketable. While upfront costs are sometimes higher, lower operating costs save money in the long run. And incentive programs such as C-PACE and federal tax incentives make sustainable building even more affordable.

For the best returns, go for LEED Gold or better, or Living Building Challenge; basic LEED certification is a minimum.

Direct the architect to select building materials with low embodied carbon, including the materials and processes that go into making and delivering them.

Use green roofs and pervious pavement to reduce stormwater runoff. While this does not reduce GHG emissions, they help reduce flooding, which is a predictable result of climate change.

Consider the building’s “afterlife” by trying to build for a long time, while also looking ahead for greener, more efficient technology that will not be obsolete in future years. Consider using mass (massive) timber instead of concrete or steel, as these buildings have the potential to reduce emissions by over 25%.

Many corporations are starting to focus on “corporate responsibility” — meaning that they also will be looking for greener buildings.

Construction

Require sustainable practices in all construction contracts. Some key practices are:

Order temporary power hook-ups early, to reduce or eliminate the need for generators
Enforce a No-Idling policy for all vehicles & equipment on site
Use LED lights for all job-site lighting
Track all construction and other waste
Meter on-site emissions — and use the data to lower emissions
Create an environmentally-conscious culture on the site, starting with small things, like recycling.
Require all subcontractors to follow sustainable practices and review practices with them.
Educate all employees and subcontractors on why sustainability in the workplace is important; for environmental and economic reasons.
Switch large and small equipment to electric-powered (when available)

The following pages provide current information on C-PACE (Commercial Property Assessed Clean Energy) financing and Federal tax credits for renewable energy.

C-PACE

C-PACE (Commercial Property Assessed Clean Energy) is a financing solution for long-term investments in a commercial property. With C-PACE, building owners enjoy the advantages of energy upgrades immediately and pay for them over time through a voluntary assessment loan that is repaid annually along with property taxes. C-PACE is an active program in several counties in PA, including Lehigh and Northampton, providing long-term and low-cost financing for clean energy and water efficiency projects.

New construction projects that utilize the following building standards and/or equipment are eligible for C-PACE financing for 100% of the cost for these energy conservation measures (ECMs).

Net Zero Building: DOE and National Institute of Building Sciences (NIBS)
Green Building Initiative: Green Globes for New Construction
LEED: New Commercial Construction (LEED-NC) and Commercial Interiors (LEED-CI) projects
LEED: Core and Shell (LEED-CS) projects that exceed current building code requirements
Living Building Challenge projects
EPA Energy Star
PHIUS Passive House Commercial Requirements (rigorous energy efficiency based on climate)

Soft costs that are necessary to install the C-PACE project or for the C-PACE Capital Provider to perform their due diligence/underwriting are also eligible. Eligible soft costs may include fees for energy or water surveys, design and engineering, project development, permits, surveys, legal fees, other third-party reports, inspections, financing, any required reserves or deposits, recordation, capitalized interest, and commissioning; the applicant may also request consideration of additional soft costs.

Loan Specifications

Interest rates for CPACE financing are fixed and typically run 5–7% — but the financing term of up to 30 years results in smaller payments compared to other types of loans. Unlike a traditional bank loan, no down payment is required for CPACE financing, and tax returns, financials, FICO or business credit scores are not required for approval.

C-PACE loans can be made to any property owner in good standing located in a participating county. with funding from “any public or private financing note, mortgage, loan, deed of trust, instrument, refunding note, or other evidence of indebtedness or obligation used to finance a qualified project.” They are typically underwritten using a Savings to Investment ratio, calculated by dividing the savings (all savings you can reasonably achieve) by the cost to amortize the loan over time.

Can Mixed-Use Properties utilize C-PACE?

If you have a mixed-use property, you may use C-PACE for clean energy investments in the commercial part of the property, as long as that part of the property has its own property assessment (so the C-PACE financing applies only to the commercial property). Owners may also be able to use C-PACE to finance a solar installation oran energy-conserving roof, including roof replacement, green roof, or new insulation, even if the commercial entity is separated from the roof by residential floors. To be eligible for C-PACE financing, the commercial portion of the building must generally be separately titled from the residential portion of the building. Consult the C-PACE Administrator at the Sustainable Energy Fund for more information.

Federal Tax Credits

Renewable Energy Tax Credits –

[Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems. (26% for systems placed in service after 12/31/2019 and before 01/01/2023, and 22% for systems placed in service after 12/31/2022 and before 01/01/2024). The tax credit covers the following types of systems (including installation costs)]

UPDATE: The 30% residential clean energy credit has been extended, although the percentage will start to decline. it covers:

Geothermal Energy
Residential Small Wind Turbines
Solar Energy Systems & Solar Panels
Fuel Cells
Biomass Fuel Stoves

(Check current information if you plan to install any of these systems.)

Commercial Building Tax Deductions – Up to $1.80 per square foot available to owners or designers of commercial buildings or systems that demonstrate a 50% reduction in energy usage accomplished solely through improvements to the heating, cooling, ventilation, hot water, and interior lighting systems. Partial deductions of up to $.60 per square foot can be taken in some cases.

For additional information, see IRS guidance:

Energy-efficient commercial buildings –
IRS Notice 2006-52 and 2008-40.

Further Information on ITC

Commercial Guide | Homeowner guide

Annual solar installations have grown by over 6,500 percent since 2006, a compound annual growth rate of 48%. The solar industry has grown from 17,000 employees in 2005 to nearly 174,000 today, while the cost of solar energy has gone down by more than 73%.

(Download PDF for more information)

Prepared by Devon Jewell, Alexandra Ludman, Margaux Petruska, and Isaac Weber.

Acknowledgments

We appreciate the opportunity to meet with several local and national developers and contractors who shared their insights and experience. In addition, many community members provided great insight into what is possible in the area of climate action and sustainable development.

Katie Bartolotta – Green Builders United
Larry Eighmy – The Stone House Group
Sigi Koko – Architect, Build Naturally
Breena Holland – Lehigh University
J. William Reynolds – City Council Member, City of Bethlehem
Kelly Sanders – C-PACE program, Sustainable Energy Fund
Anna Smith – former director of CADC B
Dan Sobrinski – VP Energy and Sustainability, WSP Consulting

About the Alliance and the 2021 Summer Internship Project on Climate Action Planning

The Alliance for Sustainable Communities–Lehigh Valley is a nonprofit organization that focuses on a wide variety of environmental and social justice issues that contribute to more-sustainable communities. Based in Bethlehem, PA, the Alliance has been active since 2003 and offers summer, fall, and spring internships to college students in the area to work on projects with the aim of creating a more sustainable Lehigh Valley.

Previous projects have tackled topics such as Campus Sustainability, Sustainability in Healthcare, Interdisciplinary Teaching on Climate and Sustainability, Brewing Sustainability [PDF] (sustainability for the craft brewing industry), and Sustainability for Independent Cafés and Restaurants.

Climate Action Interns, summer 2021 – researching and developing priorities for implementing the Bethlehem Climate Action Plan.

Devon Jewell (Moravian Academy ‘23)
Harrison Kim (Parkland HS ‘22)
Alexandra Ludman, (University of Delaware ’21)
Margaux Petruska (Lehigh University ’21), and
Isaac Weber (Dartmouth College ‘22)

This report would not have been possible without the thoughtful help and generous guidance that we received from many individuals in our community and in the climate action community.

Accompanying reports: