Incentives – The Catalyst to 100% Energy Independence

By Gino Bernardi

PV Solar

PV Solar

 

There is no doubt that government subsidies increase the adoption rate of sustainable construction.  Everyone is attracted to “free money.” Some subsidies can significantly affect the financial outlook on projects such as photovoltaic (PV) solar installation. For example, there are some reports of PV solar projects achieving internal rate of returns greater than 20%, which would not have been possible without the subsidy. The most exemplary government subsidy in this regard is Germany’s Feed in Tariff program. Germany’s policies became the status quo of the PV industry. They were so powerful that many financial analysts and economists believe that the financial collapse of the PV manufacturing industry was triggered after Germany began scaling back their Feed in Tariff program in 2010. That is an extreme example of a government subsidy which had such a profound effect on adoption that it created an artificial and unsustainable glut of global PV modules.

From data collected up to 2010, the volume of PV solar capacity in Germany was 17 gigawatts (GW), while Spain’s volume was 3.7 GW (2010 Solar Technologies Market Report). Most surprising, is that Germany’s total level of solar radiation is comparable to that of Alaska. Surely, Germany would not have achieved such a huge level of PV capacity without their popular Feed in Tariff program. All of these facts are important because they clearly demonstrate the power that regulatory action has over adopters of clean technology.

This particular example has shown how incentives do speed up the adoption rate of sustainable technology, but would a slower adoption rate be fast enough without incentives? The answer to that question requires a step back in history at least 10 to 20 years ago.  Sustainability is not a new concept. We have had an understanding of sustainability for quite a long time now. It was once referred to as socio-environmental-economic impact. Furthermore, we have been well aware of the global warming trend (a likely derivative of unsustainable construction) for the last 20 years or so. Yet, 10 – 20 years ago solar panels were more like tech toys for scientists, while the US was spending a huge amount of time, money, and focus on securing unsustainable foreign energy. Developing energy “at home” was not on the priority list.

The result of this lack of regulatory incentives demonstrably led to slower adoption of clean technology relative to today’s adoption rate. Whether it be considered too slow is likely still up to debate by critics on both sides. Personally, I find the improved quality of sustainable technology a major improvement over the past alternatives. I would like to see a future of 100% energy independence and until that day happens, the adoption rate will never be fast enough.

Alabama Crimson Tide

By Joe Pepitone

Aerial View of the University of Alabama’s Newly Designed Track & Field and Practice Facility

Alabama just won a national championship, not only was it back-to-back with last year’s, but it was their 15th championship! Thousands just gathered over the weekend to celebrate with a parade. http://progress.montgomeryadvertiser.com/article/20130120/SPORTS0401/301200031/Alabama-football-Tide-celebrates-title-parade

With an outstanding college football team who is at the top of their game, having the best practice field possible is one of the keys to help them be successful.

Enter in GRAEF…

GRAEF was part of a collaborative design team, along with Davis Architects, Inc., responsible for the design and engineering for the replacement of the natural turf football practice fields at the home of the 2011 NCAA Collegiate football champions, the Alabama Crimson Tide.

University of Alabama’s New Practice Field

The project consisted of the replacement of three practice fields with two full size Bermuda grass practice fields along with offensive and defensive blocking areas, lighting, irrigation and a building addition to the existing training facility.

View of the University of Alabama’s Newly Designed Practice Field

GRAEF provided civil engineering, landscape architecture and irrigation design for the replacement fields. The project construction documents were completed in less than two weeks in order for the project to be constructed prior to football practice sessions which began in late summer. The project was completed in July of 2012.

GRAEF was also a part of a collaborative design team, along with Davis Architects, Inc., responsible for the design and engineering of the University of Alabama’s new NCAA Division I collegiate track and field renovation.

View of the University of Alabama’s Newly Designed Track & Field

The project consisted of replacing and reconfiguring the existing nine lane track, field event areas and infield with a new track and field complex within the Sam Bailey Track and Field Stadium.

University of Alabama Track & Field

 

TIF 101

Understanding TIFs Better

By Ron Van Straten

What is Tax Increment Finance and how can it help my business?

Tax increment finance (TIF) is a popular finance tool used by communities across Wisconsin.  There are over 1,000 communities that have used this method to help finance economic development.  At the same time, it is probably the most misunderstood and confusing term at the municipal level.

In a nutshell, tax increment finance uses future property tax revenue generated from proposed development to finance infrastructure projects that will improve a given geographic area (tax increment district).  For example, a community might identify an area near a highway interchange that has potential for new development but the cost of extending sewer and water service to the area simply outweighs the profit a developer might generate from the project, as well as the additional property tax that the community would get from the new development.  Keep in mind that a local city or village might have a property tax rate of $2-$6 per $1,000 of new property value.

If the community in the above example were to form a tax increment district for the project they would be allowed to capture all the new property taxes generated from the project until the cost of the infrastructure improvements are paid (with some limitations).  Instead of the $2-$6 per $1,000 of new property tax value, the community would be allowed to keep the whole amount of property tax paid by the new development of $20-$30 per $1,000 of new property value.  In short, this would make it feasible for a community to spend say $1 million to extend services if the project were to generate $6 million of new taxable development.  After the infrastructure costs are paid back the community dissolves the tax increment district and all the taxing jurisdictions share the additional property tax just as they do with any other taxable property.

From the perspective of a businessperson, tax increment finance can provide incentives that otherwise would not be available.  The Wisconsin tax increment finance law allows a tremendous amount of flexibility regarding what a community can offer a business for incentives.  While it is not legal for a community to offer lower property taxes to one business or group of businesses, tax increment finance allows the community to provide direct or indirect incentives to the business or businesses.  These incentives can take the form of actual cash payments or they can be in the form of improved roads, sewer or water service, or other site improvements.

In short, this entry is intended to help simplify a concept that can be confusing.  We hope that this helps you understand tax increment finance and how it can benefit you as a businessperson.  If you would like to discuss the topic further, please contact Ron Van Straten at (920) 405-3828.

Grant Opportunities for Harbor/Boat Launch Projects

By Ron Van Straten

Q: What is the recent news regarding grant opportunities for harbor/boat launch projects?

A:  We are proud to announce that the Wisconsin Department of Natural Resources has awarded roughly $52,000 to the Village of Howard, Wisconsin.  This money will help the village upgrade two boat launch facilities on Duck Creek.

Q:  How did GRAEF make this happen?

A:  GRAEF worked with the Village to prepare the applications and convince the Wisconsin Waterways Commission (agency supervising the grant program) that the two Howard projects were worthy of funding.  The two projects will allow the Village of Howard to lower the boat launch facilities to accommodate lower water levels in Duck Creek and the lower portion of Green Bay.  This will make the boat launches which are currently “high and dry” to be useful again even with the low water levels.

Q:  How does this grant funding program work?

A:  Each year the Wisconsin Recreational Boating Facilities Grant Program provides roughly $2.5 million for local projects that enhance and expand recreational boating opportunities in Wisconsin.  This is a match funding program.  This year the program provided funding for 45% of eligible project costs for 15 projects across the state.  Project funds can be used for either development of boating opportunities or aquatic weed harvesting equipment.  Technically, dredging is an eligible grant funded activity, but from a practical standpoint, it makes it more difficult to secure funding if dredging is included with the project.  In the Howard situation, we used the term “ramp excavation” to explain the removal of sediments required to facilitate the boat launch projects.

Q:  Where there any interesting twists to the Village of Howard projects?

A:  GRAEF worked with Howard Village Staff to develop cost estimates and information required for the grant applications.  We needed to convince the selection panel that these projects represented wise investments.  Because the Village of Howard does not currently charge for use of the boat launch facilities, the Wisconsin Waterways Commission could reduce the amount of the grant awards for each project by $5,000.   The Wisconsin Waterways Commission feels that boat launch facilities should generate some user fee income to offset the cost of these projects.  The Village of Howard is considering this situation to decide whether to charge for boat launch use or accept lower amount of grant funding.

Q:  When are applications due?

A:  Applications are due June 1st of each year and the awards were made last week (August 2, 2012).  It is anticipated that the projects will be constructed within one year of project award.

Q:  What are the key requirements for a Recreational Boating Facilities grant application?

A:   One of the key requirements for a complete Recreational Boating Facilities grant application is a Chapter 30 permit issued from the Wisconsin Department of Natural Resources.  The chapter 30 permit application is fairly extensive for a project that involves removal of sediments and alterations to the lake bed, and generally can take several months to acquire.  For this reason it is recommended that any applicant start the planning process early if they intend to apply for Recreational Boating Facilities grant funding.  One other key requirement for Recreational Boating Facilities grant funding is that the facility needs to be available to power boats.  Because much of the funding for this grant program is derived from taxes levies on the sale of large power boats, they require that the boat launch facility be designed to accommodate more than just kayaks and small canoes.