41% Energy Reduction
Garden City, NY – [September 1, 2015]
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First American Education Finance and Ecosystem Energy Services join with Adelphi University to implement a nontraditional route to fund new energy efficiency upgrades that will save the school $1.6 million per year in energy.
Adelphi University announced that it is working with First American Education Finance and Ecosystem Energy Services to dramatically reduce its energy spend with the implementation of a new co-generation central heating plant. Adelphi will fund the project with First American using a cash-flow neutral funding strategy that will align the cost of payments to annual energy savings.
With its main campus located on Long Island, Adelphi’s annual energy spend for its 70-acre campus is significant. The University had been able to reduce its costs through various sustainability initiatives including LEED-certified buildings with geothermal heating and cooling, and solar panels on select campus buildings. However, the school still had pockets of inefficient technology, including post WWII-era boilers, with elevated maintenance costs and decadesold motors.
Adelphi considered a traditional energy savings performance contract for its next stage of sustainability work, but quickly found that it was not an optimal arrangement for the school. Although that energy service company (ESCo) would cover all upfront expenses to modernize the campus’ equipment, the ESCo would then go on to keep the savings generated for 15 years.
Tim Burton, Senior VP and Treasurer at Adelphi believed the University could find an alternative strategy that would generate savings for the school. "The Facilities Department came to me with what they considered to be a "no cost" solution. I was not comfortable with the proposal because turning over 15 years of measured energy savings meant we would get zero bottom line impact in our financial results. I knew that if we could find a company that would not take 100% of the energy savings, that would be an even lower cost solution,"; says Burton.
Burton chose an innovative approach that instead separated the technical and financial portions of the project, working with Ecosystem on engineering and implementation and First American for financing.
"Once this project is complete, Adelphi will be in the position to generate 2 megawatts of their own electricity," says Katherine Kluefer, Business Development Manager at Ecosystem, "saving 4,600 metric tons of GHC emissions every year and $1.6M on their annual energy spend."
In addition to the energy savings, the new financing structure will align the cost of the project to those annual savings. This solution dramatically cuts their energy costs, and also gives the additional money saved back to the school to use for other campus initiatives.