U.S. Government Saving Money with Energy Retrofit Projects

You know that there are some great savings to be found in energy retrofit projects, but exactly how much can you save? The U.S. Government has been implementing more and more energy retrofit projects, some of which have been wildly successful. In today’s post, we’re going to take a good look at a couple successful energy retrofit projects, including where it went well, where there were concerns and examples of how much savings were realized at the end of the project.

How Government Energy Savings Performance Contracts Save Taxpayer Dollars

One of the hottest topics when it comes to government energy use and energy efficiency programs are energy savings performance contracts (ESPC), which have been effectively used by government agencies who are facing steep water, carbon and energy reduction goals while faced with limited funding and taxpayer accountability for spending on the local, state and federal level. As an alternative to traditional financing or up-front investment, ESPCs, in their most basic form, represent a partnership between a government agency and an energy efficiency company. Essentially, the project saves the government agency money on their water, energy and related utility costs, which is then used to pay for the improvement.

For an ESPC to be viable for both parties, it needs to deliver significant monetary savings over past usage, as low savings would not be able to pay the cost of the retrofit. It needs to deliver significant energy and water savings to meet the high goals the government agency is trying to meet. In addition, the payback needs to exceed the current interest rates so that the energy efficiency company is making money on the deal. The project also needs to have a fast financial payback that will quickly return the cost to the energy efficiency company so that it doesn’t develop a cash flow issue. 

An Example: Navy Saves $6 Million on One Air Station

The 15-year, four phase energy retrofit project at Naval Air Station Oceana is one of the largest energy retrofits attempted to date, but has had amazing results. Located in beautiful Virginia Beach, Virginia, Oceana’s retrofit included decentralization of the steam and chiller plants to improve efficiency, upgrading or replacing older climate control systems with high-efficiency HVAC equipment, adding over 18,000 digital control measurement points, having over 40,000 lighting fixtures retrofit with more energy-efficient options, upgrading over 10,000 water fixtures to improve water usage and adding renewable climate control systems which included solar thermal heating and ground-source heat pumps that included effluent heat rejection to optimize the energy savings realized by the project.

With 13 years of the project started in 2002 behind them and only two remaining as the 2017 completion date rolls nearer, the lofty goal of 40% energy savings over 110 buildings equaling 5.38 million square feet and an annual savings of $6.07 million of the taxpayers’ money is becoming a reality. The second phase of the project earned several awards, including the 2011 VSBN Green Innovation Award, the 2009 Platts Green Energy Award and the 2009 Presidential Award for Leadership in Federal Energy Management. Though the initial cost was $89.6 million, the project has already begun to pay for itself and should be fully paid off within 15 years at full operation, though much of the savings are already being realized at the Air Station.

You may not have a budget like the U.S. government to work with, but investing in an energy-efficient retrofit project pays for itself quickly, often lowering your overhead and increasing your profits. For information on energy-efficient LED lighting retrofits for your business, please contact the professionals at Retro-Tech Systems today.