Do you remember your school building growing up? The dim gymnasium lighting? The classrooms that were alternatively too hot or too cold? Maybe a leaking roof in one of your classrooms? There’s a good chance your old school building is still standing. And, unfortunately, some of those environmental problems are the same.
This is because the average age of a public-school building in the U.S. is 42 years. With close to 100,000 public K-12 schools in the U.S., most are in need of maintenance, and many are in need of a solid retrofit.
If these were commercial properties, restaurants, banks or other private buildings, the property owner might obtain a building loan to make the necessary upgrades and then pass this along to the tenants through higher rents. However, most public-school buildings are owned by the municipality or county where they are located and obtaining a loan isn’t a straightforward process. In fact, it’s often hard to get capital infrastructure money.
Instead, school districts that operate and maintain the school buildings and other facilities within their district operate under a strict budget that often requires a public referendum to increase. School districts are often the largest single line item on homeowner property taxes and when school districts ask to “float a bond” for maintenance or expansion projects—often into the millions of dollars—taxpayers aren’t always happy to comply. Instead, property owners view the school districts as a tax burden. This can especially be the case when the necessary retrofits aren’t typically seen by the public—like improved LED lighting, districtwide digital temperature control systems, replacement boilers and new roofs. Although all these items clearly improve the educational learning environment for the students, they aren’t the “sexiest” upgrades in the eyes of the paying public.
Energy Performance Contracts for the Win
This is exactly why many schools have opted to engage in an Energy Performance Contract (EPC) that enables them to lever- age their trapped energy costs to finance much-needed retrofits in their facilities. The EPC process can be complex, but it results in healthier buildings, energy savings and reduced operating costs—with the strategic financial benefit of no upfront investment. In fact, EPCs don’t require additional taxes or a public vote.
At its core, an EPC is an agreement the school district makes with an energy services company (ESCO) to perform energy-efficient building upgrades and retrofits using guaranteed energy savings as the funding source. In effect, future energy savings pay for the present day retrofit.
EPCs help school districts make capital improvements that address air quality, lighting, heating, cooling and energy-production improvements, like rooftop and parking lot solar photovoltaic (PV) and power co-generation that further reduce energy consumption, without requiring out-of-pocket expenses. All of this results in healthier learning environments with lower operation and maintenance costs, more centralized building systems and a smaller carbon footprint.
Repairing the Sins of the Past
Energia, for example, drives successful school EPC projects using a seven-step process that includes the following:
- Site discovery
- Financial assessment
- A project proposal competition (making different ESCOs bid for project work rather than the traditional “lowest bidder wins” model)
- Final scope and savings agreement
- No-risk funding
- District physical transformation
- Actual savings proven