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Performance contracts help Michigan schools, local governments finance energy efficiency upgrades without up-front costs

Solar panels at Flushing schools

Five building projects in Michigan that used performance contracts to reduce energy waste were honored at the Energy Services Coalition -- Michigan Chapter's annual awards ceremony in Lansing recently.

Performance contracts enable building owners to leverage future energy savings to finance energy-saving projects, eliminating the need to dip into capital budgets.

In the Flushing Community Schools district, a combination of performance contracts and solar power reduced demand for conventional energy by 80%. Other awardees included Baraga County and the school districts of Ecorse, Eastpointe and Mason County.

This arrangement is particularly suited to large buildings or a group of buildings including city, county, and state buildings; schools; hospitals; commercial office buildings; and multifamily buildings.

Interest in using performance contracts to finance energy-saving projects is growing in Michigan, according to Jake Wilkinson, an engineer at the Michigan Department of Environment, Great Lakes, and Energy (EGLE), a sponsor of the event.

Since 2011, local governments, state government, counties, K-12 schools, universities, hospitals, and others have invested more than $240 million through performance contracts, resulting in annual energy cost savings of over $16 million.

The five winners of this year's Leadership in Energy Efficiency event invested more than $13.3 million in building system upgrades and are projected to save over $900,000 in energy costs per year over the lifespan of the improvements.

Flushing Community Schools, for example, took a unique approach by combining its performance contract with a solar power purchase agreement. The result was an 80% reduction in its conventional power use. These energy savings were used to fund $3.2 million in facility improvements at zero net cost to the school district. Improvements include over 4,000 new LED lighting fixtures, new stadium LED lighting, a new Web-based building automation system, air cleaner systems, steam trap upgrades, and water efficiency.

At the same time, student comfort in this learning environment was enhanced, and carbon dioxide emissions were cut by over 1,859 tons annually.

Flushing Community Schools and the other winners are shining examples of what can be accomplished through performance contracts, and they are helping Michigan achieve its energy waste reduction goals

Contact EGLE’s Jake Wilkinson for more information on performance contracts at


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