Energy savings performance contracts and onsite generation technologies offer K-12 school districts a strategy to combat escalating energy costs, said Louis Maltezos, co-president of energy infrastructure company Ameresco.
K-12 school districts spend nearly $8 billion annually on energy costs, the second largest expense after teacher salaries, according to the U.S. Department of Energy’s Better Buildings and Better Plants initiative. Those costs are poised to increase, with the average residential electricity price jumping 10.2% year over year to 18.8 cents/kWh in March, according to the U.S. Energy Information Administration.
Meanwhile, more than 30% of schools’ energy use is wasted, according to Energy Star. With the installation of efficiency measures, though, schools can save on average 10% of their costs, according to the federal program. An energy-efficient school district with 4,000 students can aim to save $160,000 in annual costs, DOE’s Building Technologies Program said in February.
Even in parts of the country less impacted by rising energy costs, like the Pacific Northwest, where a large percentage of energy is from renewable resources, higher costs are likely coming, Maltezos said in an interview. “They’re all going to see it over the next couple of years,” he said. Maltezos leads Ameresco’s smart energy and building infrastructure strategies. He also oversees the company’s unified non-federal U.S. project organization, smart building solutions and Ameresco Canada.
“With what’s going on with data centers and … capacity shortfalls and failure to invest in infrastructure around the country … we’re paying the price,” Maltezos said. “Some of the places that we do business have seen back-to-back, significant double-digit rate increases. If you haven’t seen it yet, you’re going to see it.”
Electricity use is “projected to grow in unprecedented ways,” according to the National Electrical Manufacturers Association. It’s projecting a 300% jump in data center energy consumption over the next 10 years and a 2,000% increase from the electric transportation sector through 2050.
Georgia Power has imposed six rate hikes in three years, driven heavily by data center load, according to Ameresco. Similar pressure is building in Oregon, Wisconsin, Virginia and Texas, the company said. School districts will be hard hit because they’re among the largest non-residential electricity customers in most communities, according to the company.
And because rate hikes directly hit K-12 district operating budgets, rising energy prices will likely force tradeoffs between teacher pay, transportation and classroom resources, Maltezos said. But districts that invest in onsite solar, storage and energy performance contracts can lessen the impact, he said.
In New York, Ameresco helped the Mount Sinai School District lower its energy costs by replacing aging building systems, according to a press release.
The $10 million project included LED lighting replacements, upgrades to energy management systems, new high-efficiency transformers and rooftop solar arrays at each school in the district. The project, based on an energy performance contract the district entered into with Ameresco, began in May and is scheduled for completion at the end of 2027.
School officials differ greatly on how familiar they are with the contracts, Maltezos said.
“There are … markets where you knock on the door to talk about performance contracts” and school officials need to be brought up to speed about them, he said. “You have to start by showing them … here’s the benefit to you,” he said. “So it’s a bit of a mixed bag, depending on where you are.”
Maltezos said that, by guaranteeing savings, energy service companies like Ameresco can help bridge a funding gap that can otherwise prevent district officials from making upgrades.
“If you go in and talk to most school superintendents, or if it’s a big district, a chief financial officer, they’ll accept that the lights will save money,” Maltezos said. “What they’re not so confident about is, what is the dollar amount going to be and can I count on it? That’s what they really need to have certainty about, because they’re going to take money that they might use for a program, or for hiring an instructor, or something else that’s mission critical, to put into a building system.”
By bundling upgrades into a turnkey solution, the energy service project can also cut through red tape that can delay implementation, he said.
“They need to hire an architect, come up with a plan, get an estimate for what that might cost, go out and get it approved, often from the voters, to borrow that money,” he said. “Then they go out for bid, hope the bids come in under that estimate, etc. With performance contracting, they can really streamline that. They can often hire us or another performance contractor on a more negotiated procurement basis.”
And because the performance contractor can guarantee its price and put together a team that knows the process, projects can get completed much quicker, he said.
“So it’s an expedited process, with the risk guaranteed,” he said.
