Energy Efficiency: A way for colleges to save and make money?

The Obama administration – and every parent with a child in college – is concerned about the ever-escalating cost of higher education. And for good reason. Tuition, room and board rose 37 percent for undergraduates at public colleges and 25 percent at private colleges (adjusted for inflation) from 2000 to 2010, according to the National Center for Education Statistics.

 

Colleges are enormous energy users. National Grid says that in the Northeast, a US higher education hub, a typical 50,000-square foot college building uses more than $200,000 of energy annually. So one way for colleges to reduce costs is through greater energy efficiency, especially if it is financed adeptly.

 

The Green Revolving Fund offers an interesting model. Basically, the college sets aside money in a fund to make energy efficiency improvements, and then uses the money saved on energy bills to replenish the fund and make more improvements to further drive down energy bills.

 

About 50 colleges have established GRFs, and they are achieving a median annual return on investment of 30 percent, according to Mark Orlowski, executive director of Sustainable Endowments Institute, who presented a recent webinar on the funds through the Yale Center for Business and the Environment.

 

A GRF removes energy efficiency from competition for college resources. Energy improvements cease to be a burden on the operating budgets, and conversation about efficiency transforms into one about investment and re-investment. Colleges find seed money for GRFs from a variety of sources, including reserve funds, alumni donations, endowments and utilities.

 

The Sustainable Endowments Institute and several partners have launched a challenge to raise college GRF funds to a cumulative $1 billion, up from the current $65 million. Existing funds vary in size from $5,000 at the College of Wooster in Ohio to $25.45 million at Standard University. The average fund is $1.4 million, according to SEI.  The funds can be found in 25 states, and at colleges as big as University of Illinois at Urbana-Champaign with 42,000 students and as small as Kalamazoo College with an enrollment of 1,381. Students, themselves, started the programs at 17 of the schools.

 

A recent blog by Joe Indvik posted by the Association for Advancement of Sustainability in Higher Education offers several good reasons for colleges to pursue GRFs over other ways to invest in efficiency. For example, he points to the “sizzle” factor.  “A GRF is a unified, purposeful investment vehicle that is easy to market and generates a more positive public image than traditional investments. It demonstrates concrete commitment to sustainability in a way that one-time investments cannot,” he says.

 

This is not a new concept. Harvard has had a GRF for  more than a decade. But the idea has taken off in recent years, with about three quarters of GRFs formed since 2008.  Energy efficiency companies would be wise to track their creation, since they clearly open the door to new business opportunities. More details can be found at www.greenbillion.org andhttp://www.endowmentinstitute.org/.

 

Elisa Wood is a long-time energy writer. See more of her work at RealEnergyWriters.com.

Views: 61

Comment

You need to be a member of Home Energy Pros to add comments!

Join Home Energy Pros

Home Energy Pros

Home Energy Pros was founded by the developers of Home Energy Saver Pro (sponsored by the U.S. Department of Energy,) and brought to you in partnership with Home Energy magazine.

Latest Activity

Michael Dunseith posted a status
2 hours ago
Profile IconMark Bloomfield, Effective Basement Solutions, Ricardo and 4 more joined Home Energy Pros
7 hours ago
Paul Raymer posted a blog post

Rocket Science?

The old expression when something is supposed to be simple is to say that, “This is not rocket…See More
14 hours ago
Sean Lintow Sr replied to Jim Gunshinan's discussion Tax Time Blues
"Well if I had to guess your credit will be 0 as it used to be up to $1500 & wasn't as hard…"
14 hours ago
Hannah Miller commented on Adam Flowers's blog post Comfort as a Selling Point
"Hello Adam! I hope you are still messages from this site. I just was forwarded your post and it…"
23 hours ago
Michael Dunseith replied to robert jones's discussion Should your local weatherization company be required to have someone BPI certified on their staff?
"Why the concern with airflow around heating and domestic pipes? Most are inside the envelope. What…"
yesterday
Tom White posted a video

Weatherization to Home Performance -- Tools & Tips for Developing For-profit Services

Are you a low income weatherization contractor looking to add home performance work you your services? The Home Performance Resource Center, Efficiency First, and NCAF present resources developed through expert industry engagement. While many of the…
yesterday
Jim Gunshinan posted a discussion

Tax Time Blues

There is a tax credit available to homeowners who have walls insulated. The credits were continued…See More
yesterday

© 2015   Created by Lawrence Berkeley National Laboratory.

Badges  |  Report an Issue  |  Terms of Service