Boulder County businesses slow to apply for $12M in ClimateSmart loans

As the ClimateSmart Loan Program opens its coffers to the commercial sector for the first time, Boulder County staffers are finding that it may be harder for business owners to green their properties than it is for homeowners.

Businesses have to overcome lengthier internal financial and planning reviews than homeowners do, and for those businesses that rent, appealing to their property owners to make energy-efficiency upgrades can be difficult.

In 2008, Boulder County voters passed a ballot measure that allowed the county to grant loans to residents for energy-efficiency improvements and renewable energy. Of the $40 million in bonds that the county can sell to finance the project, $12 million is set aside for commercial projects.

As of Thursday, no businesses had submitted applications for the program. County officials said they're expecting most submissions closer to the March 29 deadline.

The county waited to launch the commercial program until after two rounds of residential loans were given out last year.

"We wanted to focus on getting each portion of the project right," said Ann Livingston, sustainability coordinator for the county. "No one had ever run a program of this type in the country when we started, so getting the education, financial and legal aspects figured out was important."

Organizers said they have seen businesses coming up against some challenges that the residential program didn't.

For one, only property owners are eligible to apply. Business owners that rent their spaces may have to convince the property owners, who don't pay the energy bills and may have less immediate incentive to improve the energy-efficiency of their buildings.

In the city of Boulder, four property owners own most of the rental real estate, said Colin Tomb, business sustainability specialist for the county.

"We have reached out to them, but they haven't shown interest, meaning we haven't gotten a response," Tomb said. "But we are going to commit to reaching out to them (again) in the next couple of weeks."

Many business owners have expressed interest in using loan money to make improvements to lighting, roofs and insulation since the return on investment can be as soon as a couple of years. There are more than 70 eligible upgrades, including solar thermal space heating and installing photovoltaic systems.

Even if commercial property owners aren't driven to make investments because of energy-cost savings, appealing to tenants who care about conserving energy can be another incentive for making upgrades. Energy-efficient spaces can still be marketable even if they cost more.

"Green buildings sell and rent better -- there are studies that prove this," said Julie Herman, executive director of the Boulder Green Building Guild trade group.

In most cases, before a ClimateSmart application is submitted, businesses have to arrange for an energy audit, get internal approval, compare contractors' estimates and assess their finances. The county launched the program with workshops at the end of January.

"The ClimateSmart program has a short time span and businesses don't move as quickly, so it has been difficult for businesses to make those financial decisions quickly," Tomb said. "So many businesses might need to wait until the next round because they are still vetting the decision process."

The Boulder Mennonite Church on Table Mesa Drive is considering applying for a loan, but it's facing some of the common challenges. Regardless of whether the church decides to participate in the program, discussing possible improvements -- such as upgrades to its insulation, boiler system, lighting and replacing doors and windows -- has been useful, said Phil Metzler, a church trustee.

"Having the program out there has been a great incentive to push forward to get an estimate," Metzler said. "That alone has been greatly valued, and the city has been helpful in keeping us going in the right direction."