What is the savings-to-investment ratio (SIR)?

The SIR tells all stakeholders whether a project will be cash-flow-positive. It is calculated by dividing the projected energy cost savings over the finance term by the total installed cost of the project, including the cost of equipment, installation, and financing.

While the Arlington C-PACE ordinance does not require any SIR criteria, the program strongly encourages projects with an SIR>1 for the following reasons:

  • Building owners are more likely to commit to projects that are cash-flow positive
  • Mortgage holders are more likely to provide consent for projects that show positive cash flow
  • Capital providers look favorably on projects that show positive cash flow
  • In general, the higher the SIR, the greater the demonstrated environmental benefits of the project, helping to promote the goals for the Arlington C-PACE program and the Community Energy Plan.