Fun and Financing: A Sustainable Match

May 5, 2010

by Jim Simpson, Director of Higher Education Energy Solutions, Johnson Controls, Inc.
(This article appears in the May, 2010 issue of The ACUPCC Implementer)

When it comes to sustainability on campus, people can get excited about the technology (solar panels and wind turbines) and the visible efforts (new recycling containers or Earth Day events).  What’s just as exciting – but perhaps not as sexy – is that college and university administrators now have several options to choose from when it comes to financing. They’re using savings from behind the walls to fund technology and visibility projects that attract more attention.

For instance, one of the first campuses to sign the American College & University President’s Climate Commitment (ACUPCC) is the University of Maryland - College Park (UMCP). With an energy bill of more than $50 million per year, climbing utility rates, and growing concerns about effects of greenhouse gas emissions on the environment, UMCP needed a way to combine infrastructure upgrades with energy efficiency and education.

UMCP administrators found millions of dollars in deferred maintenance, and increased electrical and cooling demands exceeded the original design of aging facilities. They were especially concerned about the role of buildings in obtaining accreditation for research facilities and grants. And students had made it clear that sustainability was a priority for them.

Working with Johnson Controls, a global leader in delivering products, services and solutions that increase energy efficiency in buildings, UMCP is addressing large-scale infrastructure improvements and emissions reductions through a variety of financing methods. The project is designed to save the university nearly $30 million in energy costs over 13 years through energy and water efficiency along with renewable energy technologies.

Climate Action Plan
In 2009, the university finalized a climate action plan with 40 strategies aimed at carbon neutrality by 2050. Later that year, UMCP and Johnson Controls began implementing a $20 million energy savings performance contract. These financing mechanisms allow universities to undertake comprehensive energy efficiency retrofits with minimal risk and financial exposure.  It allows the building owner to pay or secure financing for the installation of efficiency upgrades through the savings in utility bills generated by the retrofits, rather than through upfront payments from capital budgets or increases in operating budgets.[1]

The project involves retrofitting lighting in nine campus buildings and upgrading HVAC systems, water conservation and building automation controls. The results were quick: Just three weeks after completing some of the first measures, UMCP realized more than $28,000 in savings and almost 60,000 lbs of CO2 reduction. In addition, solar technology is being installed to preheat hot water for Ellicott Dining Hall and produce electricity for the Driskell Center.

Innovative Financing Pays the Way
A master lease administered through the Maryland State Treasurer’s Office uses an indefinite delivery contract system to develop and implement projects. Additionally, a no-interest loan from the Maryland Energy Administration provided another $500,000. Through the performance contract with Johnson Controls, energy and operational savings will offset the loans.  Also, as a result of Johnson Controls’ efforts in applying for and securing local utility rebates UMCP will also receive over $420,000 in local utility rebates for the installation of qualifying technologies through the project.

“These energy reductions will not only save money and in effect pay for the upfront costs, but they’ll reduce the university’s carbon footprint and help cut greenhouse gas emissions – part of the university’s long-term sustainability commitment,” says Susan Corry, UMCP facilities management conservation manager.

“This is green, smart technology that will cut energy costs in these buildings, conserve water and replace old equipment that’s reached the end of its life. This is the first time we’ve had the resources from the state to do something on this scale,” according to Scott Lupin, UMCP Office of Sustainability Director.

The project’s 22 percent reduction goals complement EmPOWER Maryland targets, the State of Maryland’s energy reduction initiative to reduce energy consumption 15 percent by 2015.  Johnson Controls has benchmarked the buildings’ energy use through the ENERGY STAR program and will verify energy improvements over time.

Student Involvement
Student engagement is critical to the success of the project, and campus planners were sure to include items that attract their attention. For instance, an interactive touch screen connected to the solar array at the Driskell Center will show students and visitors how much energy is being produced and its equivalent in carbon reduction.

Students not only benefit through better indoor air and brighter lighting, but some are getting hands-on experience in sustainability. The university’s Department of Mechanical Engineering offered a special class on energy audits, and students were able to perform walk-through and energy survey analyses in one building, then develop a list of recommendations to reduce energy usage.

The innovative project also is helping the community by providing work for more than 300 people[2]and offering training in green careers, showing staff how to operate equipment and the facility more efficiently more efficiently.

[1] See for an explanation of performance contracts, which was developed in partnership with the Clinton Climate Initiative.

[2] Bureau of Economic Analysis, Department of Commerce, RIMS II Multipliers

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