Imagine you’re the facilities director or a business official for a Michigan school district and someone tells you there is a way to put money back into the general fund, lower maintenance costs, reduce the district’s energy footprint and, most importantly, improve the learning environment for students. Sound too good to be true?
Maybe not anymore. With Charles Stewart Mott Foundation funding, the Ecology Center, Michigan Saves and Michigan School Business Officials (MSBO) are piloting a new program—the Energy Efficiency Pilot Initiative of the 2016 Michigan Renewable Schools Program—to help schools prioritize their energy-efficiency needs and find grants, incentives and low-interest loans to address them.
“One of our goals in 2016 is to increase outreach and program offerings to the public sector, particularly to schools,” says Michigan Saves executive director Mary Templeton. “This program fits perfectly with that goal.”
This isn’t the first time Michigan Saves has teamed up with the Ecology Center and MSBO. From 2009 to 2011, the three organizations worked together on a similar, but more comprehensive, project with grant funding from the Michigan Public Service Commission. Sixty-seven school facilities participated in the two-year project and they currently save over $400,000 annually as a result. Data from the project suggests those same Michigan schools will save more than $3 million over ten years, and about $10 million over the life of the installed equipment. These successes open the door for projects like the Energy Efficiency Pilot Initiative.
“I’m so excited about working with these great partners again,” says Templeton. “We’re always looking for new ways to reach and serve our audience.”
To start the new project, the Ecology Center worked with MSBO to survey Michigan school facilities directors and business officials to determine their interest in making energy-efficiency improvements and identify the obstacles to implementing them. With regard to interest, it seems that now is a good time to launch the pilot initiative.
“Ninety percent of the people we surveyed said that energy efficiency is very important for schools and districts,” says Jason Bing, healthy buildings director at the Ecology Center. “There seems to be growing awareness about the value and importance of making energy improvements, maybe even more so than in 2009.”
In fact, the center already has 33 commitment letters from 25 different school districts across the state indicating their interest in obtaining services through the pilot program, including benchmarking current energy usage, prioritizing energy-efficiency projects, using the partners’ technical expertise and exploring grant and financing options.
“That represents 160 individual school buildings and 15 million square feet of facility space,” says Bing. “That’s a pretty good start.”
Despite the positive prospects, however, there are several obstacles that many schools face, the most important of which—according to the survey—is a lack of resources. The other barriers mentioned most often include a lack of financing and a lack of general staff, but particularly staff with energy-efficiency experience.
That’s where the project partners come in. The Ecology Center has a network of people with the necessary energy-efficiency expertise to help schools make sound decisions and develop action plans, and Michigan Saves has a network of lenders with attractive financing options to support their efforts. Once the Ecology Center helps facilities directors identify their top priorities, they can tie business officials in with Michigan Saves’ financing and, in some utility service areas, interest rate buydowns.
“We have participating lenders in every county in the state and they’re already offering very low interest rates for public sector improvement projects,” explains Templeton. “When you couple that with interest rate buydowns funded by utilities like DTE Energy and Consumers Energy, that could be a real game changer for schools.”
Interest rate buydowns are achieved when Michigan Saves’ utility partners pay for a portion of the interest due on financing, thereby lowering or eliminating the interest altogether. In 2015, interest rate buydowns for the Michigan Saves Business Energy Financing program resulted in rates as low as 0% APR for commercial businesses. The utilities have now opened up similar incentives, as well as rebates, to the public sector.
Measures that schools can finance through Michigan Saves include improvements to lighting systems, upgrades to heating and air conditioning, building operation enhancements, envelope improvements (such as new windows, siding, insulation and air sealing) and more. Financing amounts are available up to $1 million with terms from 24–60 months.
“In the end, I think this is a great value proposition,” Templeton says. “There are little to no upfront costs, very reasonable interest rates and, after schools cover the cost of their investment, all the energy savings will come directly to them.”
Michigan Saves’ role in the project is particularly important because when the Ecology Center asked survey respondents which financing options were most desirable to schools, they said energy-efficiency loans and bonds.
“When we were involved in this kind of work before, we learned that there are many cost-effective energy-efficiency improvements that schools can make in the $100,000 to $200,000 range,” explains Bing.
These amounts are too expensive for districts to finance through the general fund, but too little to go after a bond proposal, which is why schools need the Center to connect them with favorable loan options, like those provided through Michigan Saves.
Alongside these combined efforts, the MSBO brings considerable benefits to the table, as well.
“Our organization has a long history of supporting energy efficiency,” says MSBO associate executive director Scott Little. “In fact, we used to have our own program called Energy Essentials where we worked to modify behaviors associated with higher energy consumption.”
In this new pilot project, MSBO helped get the word out through the survey and restarted the energy-efficiency conversation with its members.
“Our members are keenly aware of the impact they can have on kids by effectively managing available resources in their districts,” Little says. “For example, they know that more comfortable classrooms and better lighting can lead to better learning.”
And, as Little notes, his members are determined to make it happen—not only because it makes good economic and environmental sense, but because it benefits teachers and students.
If you have questions about or are interested in participating in the pilot initiative, please contact Jason Bing at 724-369-9271 or [email protected].
