Good Performers
Sep 1, 2009 12:00 PM, By Bob Bennett
Budget-neutral solutions can create greener, more healthful schools.
Part of Lake Land College’s, Mattoon, Ill., energy-saving efforts included efficient lighting installed in the gymnasium.
Soaring energy prices and tightening school budgets don't mix well. In fact, millions of children across the United States are being educated in energy-leaking, unhealthful facilities in dire need of physical upgrade and systems modernization.
But how can an education institution pay for the work — especially in today's trying economic times? A related question: Do schools in aged facilities have cost-effective options to heighten energy efficiency and make environmentally friendly decisions?
Increasing numbers of K-12 districts and institutions of higher learning are turning to performance-based contracting to address these issues effectively. It's a “budget-neutral” method of contracting that enables a building owner to pay for facility upgrades via the cost savings that are guaranteed to be achieved by making those improvements.
It's also an investment in academic performance because renovations often create a more healthful and comfortable classroom setting. Fewer teachers and students are out sick because of asthma and other illnesses aggravated by poor indoor air quality and inconsistent temperatures.
Within reach
Performance-based contracting is a perfect fit for projects designed to cut energy use or modernize building systems. Prime examples include mechanical-system upgrades, building automation, lighting retrofits, sealing a building's envelope and water/sewer system replacements. It eliminates the need for major upfront capital investment by financing improvements over a number of years. Because the energy or operating cost savings attained each year equals or exceeds the annual financing cost, the project becomes self-funding.
School administrators are drawn to this funding strategy especially on projects that combine installing Web-based building-automation systems and sealing the building envelope.
Advanced automation enables a facility's service infrastructure, such as mechanical and lighting systems, to be monitored and controlled off-site via the Internet. The systems can adjust lighting levels, air temperature and circulation to unerringly achieve the optimal balance between energy use and comfort.
Building automation systems can schedule regular maintenance and automatically diagnose a problem, then generate a work order to repair the glitch. The technology also can integrate other essential systems, such as security, access control and real-time utility-metering, into the system. Meanwhile, the comparatively mundane process of sealing energy leaks by installing energy-efficient windows, insulation, weather stripping and roofing enables these sophisticated systems to optimize energy-use results.
Performance-based contracting also is a pragmatic way to pay for the design and installation of Earth-friendly “green” technologies. Geothermal, wind and solar systems collect clean, renewable energy from the Earth, wind and sun, and produce significant energy savings while reducing carbon footprints.
Even in a credit-constricted economy, projects premised on a performance-based contract are comparatively easy to finance. The reason: Because it is possible to accurately project future reductions in energy use, the accompanying cost savings can be forecast conservatively. And, those savings flow directly to the bottom line. In essence, money already in a school's operating budget pays for the future improvements. Financing sources are abundant. Typically, contractors can refer administrators to financial institutions willing to underwrite such projects. Experienced contractors also can help institutions prepare grant applications or build the factual case in support of efforts to pass a bond issue.
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