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In Focus: Creative Funding to Enable Sustainability

Organizations that are attempting to reduce their energy use or carbon footprint are finding there are affordable to ways to do so.

Q3 2021
The financing, operations, and maintenance of a two-megawatt solar garden for HACP was made possible through Energy Performance Contracting and public-private partnerships.
The financing, operations, and maintenance of a two-megawatt solar garden for HACP was made possible through Energy Performance Contracting and public-private partnerships.
Many building managers have realized that — in the same way that they have a responsibility to keep their occupants safe and healthy — they also have a responsibility to keep the planet safe and healthy. In fact, Johnson Controls found in its 2020 Energy Efficiency Indicator Survey that 65 percent of participating organizations have an internal or public goal for energy or carbon reduction.

A global leader for smart, healthy, and sustainable buildings, Johnson Controls has delivered more than 3,000 energy-savings projects globally that reduced carbon emissions by more than 30.6 million metric tons and achieved $6.6 billion in energy savings and operating costs. A common challenge that organizations faced was how to implement the necessary building upgrades to achieve these goals when budgets are stretched thin. With a good strategy and infrastructure partner, however, it is possible to get the best of both worlds: reducing carbon footprint while keeping operational costs low.

Creating Funding Opportunities
Modern funding options are available to building managers through a variety of procurement methods, including public-private partnerships (P3), Buildings as a Service (BaaS), and Performance Contracting (PC). As a real-world example, the financing, operations, and maintenance of a two-megawatt community solar garden for the Housing Authority for the City of Pueblo (HACP), Colorado, was made possible through Energy Performance Contracting and P3. HACP designed the community solar project to reduce energy costs for low-income individuals and multi-family affordable housing properties. The solar installation will generate enough renewable energy to power 200 households and provide employment training and clean jobs for the local community.

The BaaS approach allows a third-party vendor to absorb the risks of the project and pay for infrastructure updates for a specified period of time, identifying new opportunities for cost-efficiency and bolstering energy saving capabilities. Children’s Hospital of Alabama signed a 25-year contract with a buildings industry leader who would design, build, operate, and assume the risk for a new central utility plant for the hospital so they could maximize energy savings. This plant resulted in nearly $250,000 in annual savings while also allowing the hospital to reduce the use of gas by 69 percent and maximize efficiency of operations.

BaaS offerings continue to evolve to provide customized and expert partnership that delivers on the outcomes that matter most. For example, Net Zero Buildings as a Service provides the decarbonization solutions and full-service risk management models to power organizations’ environmental, social, and governance (ESG) goals. With sustainability wholly managed by a partner, organizational leaders are free to focus on their primary business missions.

Making building improvements is one of the most important steps building managers can take toward reducing the building’s carbon footprint. Maximize Funding to Maximize Impact
Once funding is secured, building managers can hit the ground running to immediately begin reducing their organization’s carbon footprint. This starts with building technologies, such as LED lighting, efficient HVAC systems, and advanced water metering, as well as upgrades and efficiency-focused audits of existing assets, such as the central utility plant. As projects get under way, organizations can deepen their commitment to a healthy building through larger scale, longer-term projects, such as constructing solar photovoltaic (PV) arrays to reduce reliance on fossil fuels and increase savings in operating expenses.

When considering the budget for building sustainability, investments in connected technologies should be a priority for every organization. By moving away from siloed, one-use equipment and integrating building technologies to work together and connect to a single platform, building managers and owners can achieve greater outcomes, not only for the planet but also for security, occupant health, and occupant experience. Integrating advanced security technology such as location-based monitoring with advanced HVAC assets, heating, cooling, and ventilation systems can allow for automatic adjustments to the number of occupants in a threshold, allowing for energy savings and the creation of a smart, data-driven environment.

Making building improvements is one of the most important steps building managers can take toward reducing the building’s carbon footprint. These improvements do not have to be capital-intensive, thanks to modern funding mechanisms. As businesses commit to keeping their people healthy and keeping their buildings efficient, these innovations will also contribute to a healthy planet.

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