The American Council for an Energy-Efficient Economy (ACEEE) recently released its 2014 State Energy Efficiency Scorecard and states in the southern U.S. again fall near the bottom of the list. Despite this ranking, Schneider Electric is seeing an increase in energy projects with municipalities and schools throughout the south.
So why is an area of the country with some of the lowest energy efficiency rankings suddenly jumping on this bandwagon? The answer is two-fold: increased sustainability pressures coupled with the daunting reality of maintaining aging infrastructure with growing financial constraints.
For many communities, the days of big bond measures are over as tax-weary voters tighten their purse strings, forcing civic leaders to find new ways to fund improvement projects. As a result, Schneider Electric has seen an acceleration of southern communities leveraging energy savings performance contracts (ESPCs) to help fund critical infrastructure renovations that they could not otherwise afford. This financial vehicle allows cities and schools to pay for capital improvements over time without increasing taxes or their debt load, which is critical since many communities have no financial alternative.
Make no mistake, government leaders in the south are feeling the heat to improve their energy efficiency and sustainability performance, but relatively low energy costs and growing populations give them little natural incentive to be as aggressive as ACEEE-scorecard leaders Massachusetts and California.
Instead, growing populations have put an added burden on these communities to provide more services and higher-quality services. Local leaders are looking for ways to make their communities more attractive through improved schools, parks, libraries, and emergency services.
So how does this link back to energy? Community leaders are becoming more aware of the need to align their operations with their core mission and vision. They are realizing the ability to drive key initiatives through the vehicles of revenue-generating savings and the overall message of sustainability. Leaders are beginning to connect-the-dots with how energy infrastructure and sustainability projects can boost public image and community engagement. Bottom line: Reducing costs while improving community buildings is good news to constituents, which in turn boosts public awareness of these proactive communities and their leaders.
The other unique trend in the south is that energy projects tend to be significantly larger. Schneider Electric data shows that southern projects are averaging about 400% larger than other parts of the country. Innovative community leaders are expanding the scope of traditional energy efficiency projects. Not only are savings being used for traditional building renovations, such as new HVAC and lighting, but also for technology upgrades, including city-wide fiber optic networks and enhanced security systems. In just the last few years, Schneider Electric has helped municipal and education clients in five southern states save nearly $300 million in utility costs that is now being reinvested for the betterment of the community.
These projects are also helping southern communities improve their sustainability performance. Innovative energy projects now include water conservation measures such as rainwater harvesting and renewable energy sources such as solar and wind alternatives. Over the life of these projects, they will have the cumulative effect of removing 1.6 million tons of CO2 from the local environment.
What’s more, these same projects are yielding significant economic benefits for communities. Just 24 energy projects in the south will have a total economic impact of more than $600 million over the life of the contracts, including new jobs, new business revenue and additional taxes. In fact, a recent research project by the Southeast Energy Efficiency Alliance (SEEA) has shown that energy projects have a 387% ROI and are better job creators than construction, manufacturing and renewables.
Learn More: See How Five Communities Used Their Energy Savings
Public-private energy projects are proving to be a win-win for communities large and small in the Southern US. To learn more, watch our new video about how five very different communities used their energy savings to improve their communities.