Company cuts energy bills, installs solar using San Francisco’s PACE financing program
Pier 1 is a prized destination for commercial office space in San Francisco because of its breathtaking waterfront views and prominent location. In 2000, Prologis renovated a former sugar warehouse at Pier 1 and converted it into Class A office space. Dating from 1932, Pier 1 is in the National Register of Historic Places. Prologis Inc., which received recognition for the sustainable features of its 2001 renovation, decided in 2011 that it was time to enhance the sustainability of Pier 1, and set goals to improve energy efficiency, reduce utility bills, and improve building comfort. Prologis sought to install a solar array to further reduce grid energy purchases and showcase renewable energy at its global headquarters. Furthermore, Prologis set out to implement these improvements in a way that resulted in immediate energy and cost savings to the occupants at Pier 1.
PACE financing to the rescue
To achieve these objectives, Prologis saw an opportunity to leverage an innovative financing program offered by the City of San Francisco. With the assistance of Johnson Controls, the global leader in delivering solutions that increase energy efficiency in buildings, Prologis became the first energy efficiency upgrade in San Francisco funded by the City’s Property-Assessed Clean Energy (PACE) bond financing. PACE financing is a tax assessment bond that enables building owners to raise capital for energy upgrades. San Francisco is one of the first U.S. cities to launch a PACE program, called GreenFinanceSF, making $100 million in bonding capacity available to the city’s property owners.
Johnson Controls engineered the following improvements at the Pier 1 facility:
- Designed a 200 kW rooftop solar array
- Upgraded 1,500 lighting fixtures to more efficiency technology including LEDs
- Added daylight harvesting and occupancy sensors to turn off lights when not needed
- Re-commissioned the building’s heating, ventilation and air conditioning systems to provide better comfort and use less energy
Together, these improvements were designed to reduce grid energy purchases by 32 percent and generate energy savings of $98,000 per year for Prologis
and other building occupants. By using PACE financing, Prologis minimized upfront capital expenditures needed to implement the $1.56 million building-wide energy efficiency and solar project. Under PACE, project financing is repaid through a tax assessment on the property tax bill. A low-interest bond is used to fund improvements and will be paid for over 20 years. This aligns costs and savings for building occupants and provides a solution to transfer the value of the improvements to any future building occupants or owners. Bay Area area companies, including Johnson Controls, are expected to complete the retrofit and construction work.
The Pier 1 project demonstrates Prologis’ support for the City of San Francisco’s efforts to promote an innovative new solution for financing sustainable building improvements. Prologis expects this project to serve as a catalyst for energy efficient and sustainable improvements among other commercial building owners.