Energy Efficiency – A Programmatic Approach
By David Adamian, President and CEO, GreenerU
Every college and university has undertaken some energy efficiency work in recent years. However, few institutions have taken optimal advantage of the opportunity to leverage energy efficiency as an investment in their own campuses. Taking optimal advantage of the opportunities to invest in our campuses requires a significant shift in perspective, an intentional effort to capture opportunities that provide a reasonable return on investment and some good strategic thinking about how to get there.
The benefits of pursuing an aggressive energy efficiency program are significant.
- Addressing Deferred Maintenance - For starters, energy efficiency programs provide opportunities to take a bite out of growing deferred maintenance backlogs. I’ve seen several approaches to leveraging energy efficiency programs to address deferred maintenance:
- Life Cycle Cost Evaluations – Getting past traditional payback metrics and using a true life cycle cost evaluation will help pull important deferred maintenance projects into your program.
- Hybrid Deferred Maintenance / Energy Efficiency Programs - Leveraging quick payback projects to help pay for longer payback deferred maintenance projects can be an effective way to gain approval for those projects.
- Improving the User Experience - Many energy efficiency projects improve the user experience of the building as well. LED lighting upgrades can enhance the visual environment. HVAC controls improvements can target improved temperature control. Laboratory ventilation projects can improve the safety of the laboratory environment.
- Investing vs. Divesting - A strong case can be made that investing in reducing your campus’s greenhouse gas emissions is more impactful than divesting from fossil fuels. Williams College recently took this very approach in announcing a new greenhouse gas reduction initiative stating: “We will invest, not divest” in an announcement that acknowledged that this investment decision grew out of a process prompted by student activism.
- Financial Return - Energy efficiency makes basic financial sense. With most energy efficiency programs providing high single digit to low double digit returns while investing in your campus. Why wouldn’t you aggressively pursue those opportunities?
Barriers and Solutions
There are no shortage of obstacles to implementing an effective energy efficiency program.
- Funding – With numerous urgent priorities laying claim to capital and operating budgets, energy efficiency programs are typically left with scraps from the table. Fortunately there are a number of funding/financing options available to most schools:
- Endowment Funding - There are ways for endowments to invest in their associated campuses, providing very attractive returns, without running afoul of rules, regulations and good practice.
- Debt - Borrowing funds at low single digit interest rates and using the proceeds from the much higher ROI energy efficiency investments is a winning proposition for schools that have the debt capacity. This is the approach Brown University used to fund its $20+ million program.
- Carbon “Tax” –A recent white paper considers the prospect of a carbon charge at the college designed to approximate the “social cost of carbon”. Such a “tax” can help fund greenhouse gas mitigation projects while aligning funding priorities with the institutions mission.
- Bandwidth - Many directors of facilities faced with ambitious energy efficiency goals believe they have the capabilities to achieve those goals within their departments. The simple reality is that facilities departments are not staffed to run significant energy efficiency programs. Without an honest assessment of internal capabilities and work load and a solid plan for how to address the gaps, the grand energy program will fall behind, devolving to one-off projects done on an ad hoc basis.
- Focus - Related to bandwidth, maintaining focus on your program is another significant challenge. Whether it’s an individual from your staff or an outside resource, having someone whose primary focus is the advancement and success of your energy program is critical to the success of any significant program.
- Expertise - There are a few areas of expertise that become important in executing an effective energy efficiency program. These include expertise in energy engineering, utility incentive programs and managing construction projects in occupied buildings.
- Process - The most effective energy programs are planned out with processes designed for success.
- First, the opportunity needs to be scoped out.
- How much money are we going to spend and when?
- What are our interim metrics and milestones?
- What are the approval processes?
- What steps of the process are sequential vs. parallel?
- And how will the program performance be measured and judged?
Without addressing these types of questions, work will stall at every step along the way as the team pauses to figure out what comes next.
The benefits of an effective energy efficiency program are manifold. However, so are the barriers. Successfully navigating those barriers requires understanding them well and thinking strategically about how to overcome them. Finding the right partner(s) and clearly delineating their roles will help. With right resources in place (financial and others) and a well-thought out process for execution, you should be well on your way to a successful energy program that will generate dividends for your institutions for many years to come.
 Williams College, “Williams College to Address Climate Change Through Comprehensive Action and Investment of up to $50 Million”, September 10, 2015. http://communications.williams.edu/news-releases/9_10_2015_climatechange/
  Chris Powell, “Energy as an Asset, not an Expense: Undeveloped Investment Opportunities”, webinar September 15, 2015. www.greeneru.com/resources/#verticalTab2
 Hall, Bedecarre, Falino, Miller, Garafola, Norell, Cunningham and Ho, “Internal Carbon Accounting at a Small Liberal Arts College”, September 2015. http://sustainability.vassar.edu/docs/9-15InternalCarbonAccountingataSLAC.pdf