New Market Opportunity: The SEED Sprouts
In today's world energy prices are high and getting higher. Unfortunately for schools, their operational funds are dwindling and they are grappling with how to handle these increasing energy costs, as state and federal funds are being cut.
Howard Hager, President of Renewable Energy Design.
Schools still have the same power needs regardless of what energy costs. In many cases, new technology drives power consumption even higher. To help navigate these challenges, most schools have hired consultants or are working with power providers and utility companies to reduce energy requirements, cost, carbon footprint, or a combination. New programs are being created so schools can employ energy-efficient technologies at lower costs.
Sacramento Municipal Utility District (SMUD) is one of the first public utilities to offer this type of incentive to schools. SMUD's Supplier Education and Economic Development Program (SEED) offers local contractors an incentive to provide schools competitive bids for energy-saving technology.
Nearly 80 percent of schools in the Los Angeles Unified School District are 50 years or older. The money generated from energy-efficiency upgrades could be used to pay for retrofitting roughly half of California's 10,000 public K-12 schools. Energy-efficiency upgrades should considered the "low-hanging fruit" of alternative energy programs because they provide the greatest bang for the buck.
A New Market Opportunity
In the deregulated energy market, there are many more opportunities for school districts to manage and control their energy investments, creating a new market opportunity for utilities and energy service companies who can provide the services necessary to navigate complex energy markets, and to procure and use energy more cost effectively.
In the deregulated energy market, there are many more opportunities for school districts to manage and control their energy investments, creating a new market opportunity for utilities and energy service companies.
While wind and solar technologies have been successfully implemented in some situations, the return on investment can be long and the upfront cost too high for schools. In some cases, government incentives can help reduce equipment cost, but in the end it can take years -- up to a decade -- to get the desired payback.
Conversely, SEED programs can provide a long-term revenue stream that can span up to 15 years by harvesting the energy savings data from installed energy-efficiency technology, such as thermostats, windows, roofs, lighting, insulation, and boilers, or from clean energy systems like solar or geothermal systems.
The energy saved by installing such technology can lead to significant cash revenue and bridge the revenue gap created by budget cuts. Most schools hold bake sales or other fundraisers to buy sports equipment, not knowing that their local SEED program can bring six and seven figures just by capitalizing on current installed technology. Ypsilanti Public Schools in Michigan, for example, leveraged this program to the tune of a projected $6 million dollars and still has another 10 years to go. The SEED program captures the energy savings delivered from a school's existing clean energy projects and delivers the energy credits as Clean Skies for Education Certificates to be sold in the voluntary energy market.
SEED programs present a new market opportunity to utilities and provide schools an effective way to fund operations and generate revenues, bridging budget gaps. Many schools do not have the wherewithal to drive these projects to fruition but utilities can provide compelling models where large up-front investments are unnecessary. Schools can reap the cash rewards of energy-efficiency and clean energy while utilities benefit from load reductions to an already strained grid.
About the Author
Howard Hager is President of Renewable Energy Design, Inc., a green energy power provider and established integrator in Puerto Rico and the Northeastern United States. Hager is as a renewable energy technologist, implementer, and consultant working closely with government agencies, K-12 schools, retail organizations, and corporations.