The New Energy Market: The S.E.E.D. Sprouts!
By Howard Hager, President of Renewable Energy Design, Inc.
In today’s world energy prices are high and getting higher. Unfortunately for schools, their funding to operate is dwindling and they are grappling with how to handle these increasing energy costs. It truly has become a dilemma as states and federal funds are being cut. Schools still have the same power needs. In many cases they are experiencing increasingly higher power consumption to run lighting, heating, computers, machines and anything that consumes energy. To help navigate these challenges, most schools have hired consultants or are working with the power providers and utility companies to reduce either energy requirements, cost and carbon foot print. States and cities are creating programs to help schools get cost savings on technology and services that are bringing energy savings to them.
Sacramento energy provider, Sacramento Municipal Utility District, is really one of the first public utilities to act and offer incentives for local small businesses and supplier education and economic development program (SEED) for incentives that allow small businesses to be competitive in bids to schools.. Almost 80 percent of schools in the Los Angeles Unified School District are 50 years old or older and the money generated from the efficiency could be used to pay for upgrading roughly half of California's 10,000 public K-12 schools. Energy-efficiency upgrades should considered the "low-hanging fruit" when it comes to investing in alternative energy programs because they provide the greatest bang for the buck.
Rising energy costs have fueled the growth of an emerging sector in which organizations are now refocusing their business, products and services to achieve energy cost savings. For instance, Unified Energy, a Tullet Prebon Company, can be identified as such one of the energy cost saving companies that has been flying under the radar. First providing sourcing, procurement and sustainable management of retail power, they are now helping schools achieve maximum value for their energy dollar and minimize their exposure to price volatility using a newly developed playbook in deregulated states. Today the deregulation of energy presents opportunities for many school organizations to manage and control their energy investment inclusively for the first time – thus creating a new emerging market and new companies that are helping them. Several companies have begun to provide the services essential to navigate complex energy markets and to procure and use energy on a more cost effective basis.
We all have seen the new lighting technology, solar and wind industry make forays into schools to bring their energy costs down. While these technologies have been successfully implemented, the ROI can be long and often the upfront high cost in the technology equipment can create obstacles for schools. In some cases, there are government incentives that can help reduce the equipment cost but in the end, it can take years or a decade to get the expected payback. For instance,Dragonfly Solutions takes a different approach, aiding school districts in leveraging a School Energy Efficiency Development (SEED) Program . and developg a nice long-term revenue stream that can span a total of 15 years. This is doneby harvesting the energy data of what has been saved through the installation of any energy saving products from thermostats, windows, new roof, lights, insulation, doors to boilers, or from clean producing energy like solar or geothermal systems. The energy saved by installing suchenergy saving products can lead to significant cash revenue and bridge the revenue gap for schools due to budget cuts. Most schools do bake sales to buy sports equipment, or have events unknowing thattheir SEED program can bring six and seven figure revenue amounts to schools using their existing energy saving installed technology or hardware. The program captures the energy savings delivered from a school’s existing clean energy projects and delivers the energy credits to be sold in the voluntary energy market as Clean Skies™ for Education Certificates (See www.ECXmarkets.com).
Ypsilanti Public Schools in Michigan for example leveraged this program to the tune of a projected $6 million dollars. It will aid in the debt elimination for the school. Also since the program will run at least another decade, it will give them additional revenue for years to come. This emerging new way for schools to help the environment and reap cash rewards that could to be used to purchase more efficiency technology as well as pay for other school programs is a new twist for schools to bridge the budget gap.
Renewable energy technology and small business help programs are the only hope that schools have to effectively fund operations and generate revenues. Many schools don’t have the expertise to do the projects and the general perception is that someone cannot be hired to help. The good news is that Renewable Energy Design and similar companies are coming to understand the obstacles schools have and have develop compelling models where the schools do not have to allot any big investments up-front while they recoup new revenues they didn’t have before.
http://www.unifiedenergy.com/about_us.aspx Unified Energy web page
http://www.dragonflysolutions.co/about-us Dragonfly solutions web page
www.ECXmarkets.com ECX market web page
https://docs.google.com/file/d/0BwzC_pKL053XYlFhWm8wcjBpWlU/edit?pli=1 Press release for Ypsilanti schools
https://docs.google.com/file/d/0BwzC_pKL053XNlgzRjE1QS1mU0U/edit?pli=1 Cleantech Alumni Award
www.renewable-energy-design.com REDI renewable energy design web page
https://www.smud.org/en/do-business-with-smud/small-business-incentive-program/ Sacramento program for schools