5 Reasons Schools Should Pursue Performance Contracting

Raise your hand if your school has a long list of capital needs and deferred maintenance.

Unfortunately, you’re not alone. Many schools have significant infrastructure requirements and too few funds to address them. Fortunately, one method of addressing them is through Energy Performance Contracting (ESPC) – which in Pennsylvania is also known as Guaranteed Energy Saving Act (GESA) projects.

According to the Department of Energy*, ESPC projects are a recommended approach for schools to pursue facility modernization for five reasons:

Overcome the Barrier of Limited Budgets

Limited capital budgets present a barrier to funding energy efficiency projects. ESPC can remove the financial barrier by using savings to pay for upgrades today instead of waiting for a capital budget allocation. If you wait for funding to become available in the future instead of financing today, it will actually end up being more expensive, because the cost of continuing to pay high utility bills during the waiting period exceeds the interest cost of financing the improvements today.

Improve Facilities and Systems

ESPC’s comprehensive approach may upgrade some or all of an owner’s systems or facilities at once, capturing synergies and economies of scale. It modernizes infrastructure, improves the work environment, and streamlines maintenance practices to sustain savings and effective operations.

Demonstrate Environmental Stewardship

Reducing long-term energy use through efficiency and renewable energy conserves natural resources, reduces air and water pollution, and reduces our dependence on fossil fuels. Many governments have climate and energy savings goals or long-term sustainability plans. ESPC provides the financial means and technical expertise to achieve those goals, comply with environmental standards, replace antiquated systems, improve processes and operations, and reduce waste.

Use Capital Budget Dollars Wisely

Capital budgets are limited and often stretched across many priorities. With ESPC, utility and O&M dollars that are no longer needed for their original purpose are invested in infrastructure improvements. Reducing energy and water use helps stabilize the utility budget, reducing the risk of future volatility in energy prices and reducing the associated taxpayer burden.

Support Economic Development

ESPC projects create jobs, and some ESCOs report anecdotally that as much as 70% of the project cost remains in the community. ESCOs often use local contractors that are familiar with the facility and already have a good working relationship. Many owners have challenged ESCOs to buy locally and contract with local companies as much as feasible—an objective stated in the ESCO solicitation.

Summer is the perfect time to start your GESA project. Site assessments won’t disrupt students, and you can target next summer for construction.

Let us help get you on the path to facility modernization and energy efficiency. Please reach out for more information.

*U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy. May 2021 “ESPC for Small Projects.”