Can My Organization Afford To Go Green? – A case of putting the cart before the horse!

Although LittleFoot Energy began as a solar energy developer, they soon discovered that they could provide the greatest value to customers by helping them navigate the options and complexity within the new energy landscape of renewable incentives policy, carbon credits and technology risk. Allowing technology to lead the discussion is a clear case of ready, fire, aim.

Somerville, MA – Although LittleFoot Energy began as a solar energy developer, they soon discovered that they could provide the greatest value to customers by helping them navigate the options and complexity within the new energy landscape of renewable incentives policy, carbon credits and technology risk.  Allowing technology to lead the discussion is a clear case of ready, fire, aim. 

“The reality of the renewable energy landscape is that project economics rely extensively on a building owner’s ability to take advantage of available incentives.  Without incentives, economics are significantly jeopardized – game changing really.  Prioritizing which energy investments make the most sense is therefore significantly driven by the ability to monetize and benefit by available incentives.  As a result, specializing in structuring energy improvement projects that help customers maximize lucrative incentives has become LittleFoot’s core competency,” says Kevin Poulsen, CEO of LittleFoot Energy Corporation 

In 2008, LittleFoot expanded its offering, and now helps organizations prioritize, fund, implement and verify a broad range of energy improvement projects that save energy, increase the bottom line, and position for a strengthened competitive future.   

One of their earliest success stories was The Longfellow Clubs, a premier racquet and fitness facility in the Boston area. In 2007, LittleFoot was tasked with creating a business case for implementing solar energy.  But in what Poulsen refers to as “eleventh hour jitters”, it turned out that agreement on the strength of the deal economics between the customer and the customer’s tax council was not fully established – ultimately delaying the process. 

“We often found that the dialogue would stall at the point when it became time to establish the value of the renewable energy incentives, and the impact those incentives have on the overall investment opportunity,” says Poulsen. 

But with challenge came the opportunity to streamline. The solar system put in place at The Longfellow Clubs replaces 50 percent of the annual fossil fuel to meet the facility’s energy demand for heating their pool, Jacuzzi, and showers, while reducing the unit cost of energy by 57%.   

But learning from what works, as follow-on to the solar implementation, LittleFoot signed the club chain to a no-risk energy performance guarantee called the LittleFoot Energy Guaranteed Business Case™, an approach that sets ups clear investment targets for projects up-front, and before any work starts. Projects are sought that meet or exceed those targets, or there is no cost to the customer. Projects can be funded through an energy savings program that pays for the improvements through the resulting energy savings, providing positive cash flow from day one, with no or little money out of pocket. LittleFoot is able to guarantee its projected savings with a performance bond, resulting in a project that reliably delivers on customer investment targets. 

Key to LittleFoot’s approach is structuring projects that maximize lucrative renewable energy incentives by integrating renewables with traditional efficiency measures – creating hybrid systems that result in superior financial benefit and lower total cost of energy.   

In 2008, LittleFoot developed a business case for a university in Cambridge. The resulting solution integrated solar with energy recovery from a nearby steam tunnel. The cost savings were enormous: the energy recovery portion now provides 65% of the total energy contribution for one-third of the capital cost, providing improved capital recovery, and the solar system’s 25-year system life provides long-term cash flow benefits and energy expense predictability. The integrated system also benefits by sharing costs for controls, engineering, project management, and finance while also allowing application of renewable energy incentives to portions that would otherwise be considered part of the heat recovery system.  

Other key benefits of the solution included a no-money up-front power purchase agreement (PPA) procurement that allows a non-profit to indirectly benefit from tax based incentives. This allowed an entity with nonprofit status to realize all the benefits of a solar project, i.e. predictable long term energy expense, CO2 reduction, green bragging rights, improved operating profit and building asset value, while securing the option to purchase the system anytime at a 47% discount.