ENERGY SERVICES TODAY
CELEBRATING PUBLIC-PRIVATE PARTNERSHIPS:
2024 NAESCO Member Award Finalists
HVAC’S INVISIBLE ENERGY DRAINAND THE EASIEST WAY TO STOP IT
Georgia Delivers Local Building Infrastructure
Kristofor Anderson’s leadership powers GEFA’s mission to turn federal dollars into local impact
Make 2025 the year you become NAESCO accredited.
Why become NAESCO accredited?
There are hundreds of ESCOs across the US, but only 38 are accredited by NAESCO. Our Accreditation Program is more rigorous than the state and local government pre-qualification processes.
What are the benefits?
Many public agencies recognize the value by requiring ESCOs to submit their accreditation when responding to RFPs. Data from the program’s 5,500+ projects validates the performance of the ESCO industry and is used by policymakers to advocate for the wider use of performance contracting.
Who is eligible?
Energy service companies and energy efficiency contractors who maintain the highest quality standards.
Learn more & get started today: naesco.org/accreditation michelle.yoon@naesco.org Accreditation process begins in January 2025.
FROM THE EDITOR
Welcome to Energy Services Today,a quarterly publication dedicated to the latest advancements in the energy services industry, focusing on energy efficiency and infrastructure within the built environment.
I’d like to open by sparking some thought and curiosity. As we know, there are many ways to solve a problem. Each option presents an opportunity to deliver different degrees of outcomes. One can achieve the minimum goal that was set or push further to set a higher bar and magnify the realized outcome. Achieving the best results often requires outside-of-the-box thinking and may even require trailblazing a new approach.
When it comes to retrofitting existing infrastructure, the same mindset applies. Facilities owners usually have a specific problem and a goal in mind, typically focused on addressing the most immediate issue. Sure, that problem can be fixed easily enough—but the real question is, how can this retrofit project be taken further to maximize its value?
In this issue, we focus on how projects can become more comprehensive to drive greater results and long-term impact—whether it’s through integrating additional energy conservation measures using cutting-edge technology to enhance efficiency and operations, leveraging creative financing strategies to stretch capital dollars or taking advantage of available federal funding to scale projects.
We begin with an article highlighting a game-changing program from the U.S. General Services Administration (GSA), which is pioneering the testing of cuttingedge building technologies in federal buildings. Next is the featured article spotlighting the leadership of Kristofor Anderson, Director of Energy Resources at the Georgia Environmental Finance Authority (GEFA). Under his guidance, GEFA has developed robust energy programs that provide essential funding and support to public entities across Georgia for building and energy infrastructure projects.
Following this are six compelling project examples of how public-private partnerships combined with innovative financing strategies can amplify project outcomes, all of which are finalists for the National Association of Energy Service Companies (NAESCO) 2024 Member Award. Lastly, we have several examples of technologies that can be implemented in water infrastructure and building retrofit projects to boost operational efficiency and reduce costs.
We hope these stories motivate, inspire, and educate our readers to set a vision for innovation and growth.
Julie Chesna, Editor-in-Chief
Editor-in-Chief Julie Chesna
Writers Matthew Chester
Guest Writers
Marybeth Yannessa
Emily Norcross
Harry Rahman
April Frakes
Photography
Kaylinn Gilstrap
Charity Mainville
Georgia Delivers Local Building Infrastructure Projects: Krisotofor Anderson’s Leadership Powers GEFA’s Mission to Turn Federal Dollars into Local Impact
Celebrating Public-Private Partnerships: 2024 NAESCO Member Award Finalists
SHOWCASING INNOVATION:
GSA’S GREEN PROVING GROUND PROGRAM
PAVES THE WAY FOR BUILDING ENERGY
EFFICIENCY AND OPERATIONS TECHNOLOGY
BY MATTHEW CHESTER
The adoption of new technology in federal building retrofits is stunted by the fear that the technology is not proven— the risk of failure or underperformance is too high. Yet, at a time when the demand for advanced building technologies has never been greater, this caution could be counterproductive. To achieve ambitious carbon reduction targets, buildings must not only adopt but excel in energy efficiency. Recognizing this, the federal government has found it necessary to step up as a leader in fostering and promoting innovative American-made technology. Specifically, the Green Proving Ground (GPG) Program from the U.S. General Services Administration (GSA) has served as a shining example of how public sector initiatives can successfully drive advancements to the next generation of building performance.
THE IMPORTANCE AND VALUE OF THE GREEN PROVING GROUND PROGRAM
The GPG Program has already entrenched itself as an essential component of the federal government’s broader push to reduce energy consumption, improve sustainability, and lower operational costs in its vast network of buildings (GSA reports owning and leasing almost 8,400 buildings with a total of 363 million square feet across the country). Established to evaluate and deploy emerging building technologies, GPG serves as a first testing ground where new technologies are piloted in realworld settings, providing engineers and program implementers with critical data on the technologies’ performance in achieving their ultimate goals while also identifying weak spots or areas that risk user error. To date, the GPG has published the results of 54 different technologies they have tested, while 39 technology evaluations are currently ongoing at 51 test beds, all under the following categories:
• Building envelope;
• Energy management;
• Electric Vehicle Supply Equipment;
• Healthy Buildings;
• HVAC;
• Lighting;
• Materials;
• On-site power & renewables, and
• Water.
Implementation by the GPG aims to bridge the gap between innovation and practical application. Many cutting-edge technologies often face barriers to widespread adoption due to a lack of real-world performance data, with potential customers or even pilot programs feeling unwilling to invest in technology with unknown results. By implementing these technologies in federally owned buildings, the GPG helps to prove their effectiveness under real conditions, offering valuable insights that private sector companies can later adopt. This process not only accelerates the path to commercialization in a lower-risk setting but also strengthens the federal government’s commitment to reducing the carbon footprint of its building portfolio.
Further, with federal initiatives like the push toward net-zero emissions buildings by 2045 and the commitment to lower greenhouse gas emissions, GPG directly supports the broader federal government sustainability targets. By identifying technologies that may improve energy performance, the program helps ensure that federal buildings—some of the largest and most energy-intensive in the country—are at the forefront of innovation.
HIGHLIGHTING THE CLASS OF NEW TECHNOLOGIES CHOSEN BY THE GPG PROGRAM IN JULY 2024
The GSA announced in July 2024 a new cohort of cuttingedge technologies aimed at transforming the energy efficiency and sustainability of federal buildings. These technologies were chosen in partnership with the Department of Energy (DOE), reflecting the government’s commitment to pushing the boundaries of innovation and finding solutions that can contribute to the ambitious goal of achieving net-zero federal buildings.
These technologies, each potentially offering unique benefits in terms of energy savings, operational improvements, and environmental impact, will next undergo real-world testing in federal facilities across the country. This year’s selection focused on several key areas critical to improving building efficiency, including advancements in HVAC systems, lighting controls, building automation, and renewable energy integration. Each technology represents an opportunity to not only reduce energy consumption but also make federal buildings more resilient, adaptable, and cost-effective in the long term.
Here are each of the chosen technologies and their respective vendors, demonstrating how the federal government continues to lead by example by testing emerging solutions for a sustainable future:
BUILDING ENVELOPE
Building
Envelope
Remote Sensing Drones
GPG is evaluating a technology from Lamarr.ai that uses drones with infrared sensors to detect heat loss and thermal anomalies in buildings. This approach promises a more efficient, cost-effective alternative to manual energy audits, particularly for large or complex structures. The data collected by the drones is processed using an AI-powered platform to generate 3D models and provide precise retrofit recommendations.
HEALTHY BUILDINGS
Biotech IAQ Verification and Energy Assessment
GPG will test a technology provided by SafeTraces that uses DNA-tagged particles to simulate infectious aerosol movement, allowing for precise tracking of indoor air quality (IAQ) and HVAC performance. HVAC upgrades to enhance IAQ often lead to over-ventilation, excessive spending, and accelerated equipment degradation. Biotech IAQ verification and energy assessment can help meet regulatory guidelines while minimizing energy use and costs.
Integrated Germicidal UV-C (GUV) Air Cleaners
GPG will test integrated GUV air cleaners from Louvers International that use UV-C light from low-pressure mercury lamps to deactivate airborne pathogens like bacteria and viruses. The vendor estimates that integrated GUV air cleaners can provide four or more equivalent air exchanges and reduce HVAC runtime by 50–70%, offering a cost-effective and energy-efficient solution for pathogen control in occupied spaces.
IoT Light Exposure Sensors
With technology provided by Blue Iris Labs, GPG is investigating the use of light exposure sensors to inform lighting design and support healthier circadian rhythms. IoT light exposure sensors measure spectral power distribution, offering insights into both visible and non-visible effects of light. Sensors can evaluate existing circadian lighting systems or integrate into lighting control systems to provide real-time data. Optimized lighting can improve occupant health and benefit mood, sleep, and hormone regulation.
HVAC
Cold Climate Air-to-Liquid Heat Pumps
GPG is evaluating cold climate air-to-liquid heat pumps provided by Trane Technologies that are designed to provide reliable and efficient heating in temperatures as low as -18°F (compared with the 0°F cutoff of conventional heat pumps). An enhanced vapor injection technology uses an economizer to improve system capacity and allows for higher hot water temperatures in colder conditions. Cold climate heat pumps can be used as a primary heat source or to supplement existing systems, with the vendor estimating up to 60% energy savings compared to a standard electric boiler heating system.
Modular Ice Energy Storage
GPG is testing modular ice energy storage systems from Nostromo Energy, which provide cooling by using water capsules to store and release thermal energy. The systems charge during off-peak hours and discharge during high demand, reducing peak-
time cooling loads by up to 95% by vendor estimates. The offset is envisioned to lower energy costs, decrease grid pressure, and cut greenhouse gas emissions. Modular units can be stacked and allow for design flexibility.
Technical Specification for Very High-Efficiency HVAC
GPG is evaluating a technical spec for VHE HVAC systems provided by the Institute for Market Transformation. The spec calls for the separation of heating and cooling functions from ventilation and uses high-performance energy recovery ventilation to maximize efficiency. Airflow zones allow for precise system control and improve indoor air quality. Vendor case studies have shown an average 70% reduction in HVAC energy use. The spec supports building electrification without needing to upgrade existing electrical services.
MATERIALS
Low-Carbon Concrete
Low-carbon concrete is a sustainable alternative to traditional cement that matches or exceeds conventional concrete's strength and helps reduce CO2 emissions temperature kilns. The concrete can be used in any structural application and integrates seamlessly with existing industry standards and practices. GPG is evaluating two low-carbon concrete technologies: one by C-Crete Technologies, which uses an electric-powered pulverization process, and one provided by Sublime Systems, which uses an electrochemical process for manufacturing.
Phase Change Material (PCM) Ceiling Tile
GPG is testing phase change material (PCM) ceiling tiles provided by Armstrong World Industries. The tiles enhance building thermal mass by absorbing and releasing heat as the PCM shifts between solid and liquid states. Temperature stabilization improves occupant comfort and reduces HVAC loads, with the vendor estimating 15% in HVAC energy savings. The tiles improve acoustical performance and may be a cost-effective upgrade for buildings with significant daytime heat gains.
ON-SITE POWER AND RENEWABLES
Buildings Integrated Photovoltaic (BIPV) Sunshades
GPG will evaluate BIPV sunshades from Vitro Architectural Glass and OldCastle BuildingEnvelope. The technology combines solar panels with sun-shading to generate on-site power and reduce solar heat gain. The shades are intended to enhance energy generation, especially on south-facing sides in sunny climates, while also improving occupant comfort by reducing glare.
Modular Vertically Integrated Microgrid
GPG is testing modular vertically integrated microgrids from Gridscape Solutions for localized power generation and distribution. Modules consolidate all necessary components into a single box of hardware. The boxes are scalable and stackable, simplifying installation and hardware replacement. The vendor estimates 60-80% reduction in installation time and costs and around 70-80% independence from the utility grid.
Precise Geothermal Drilling
GPG will evaluate technology provided by Brightcore Energy, that enables the efficient installation of closed-loop geothermal heating and cooling systems in urban areas. This method reduces space requirements and minimizes noise and disruption during installation, making it more suitable for densely populated environments. Geothermal systems offer substantial energy savings, as demonstrated by a vendor case study of a historic building in New York City. The study reported a 60% reduction in energy consumption for heating, an 18% reduction for cooling, and a 41% decrease in greenhouse gas emissions.
Liquid Desiccant Dedicated Outdoor Air System
Coordinated with Blue Frontier, BTO will evaluate how the use of liquid desiccant technology to improve air conditioner efficiency. This technology aims to reduce cooling energy consumption by removing humidity from incoming air before it enters the HVAC system, which not only improves cooling efficiency but also enhances indoor air quality by controlling moisture levels. The system’s integration of energy storage capabilities also allows for peak load management.
Refrigerant Lifecycle Management Strategy
êffecterra’s approach to refrigerant management offers a comprehensive solution for reducing greenhouse gas emissions related to refrigerants. In the demonstration with BTO, these efforts will investigate how the life cycle management strategy for refrigerants can streamline their tracking, recovery, and recycling throughout their use in HVAC systems. This strategy can minimize refrigerant leaks and ensure proper disposal, reducing the environmental impact of refrigerant use while helping buildings meet sustainability goals.
MOVING FORWARD WITH PROVEN SOLUTIONS
DOE’s Building Technologies Office (BTO) will work with commercial building partners to test the following technologies:
IoT-Based Building Management Solution
BTO will work with the building management system provider, 75F, to evaluate how their solution leverages IoT sensors and cloud-based software to optimize building performance in real-time. This evaluation will determine how such a system can improve energy efficiency by continuously adjusting HVAC, lighting, and indoor air quality based on occupancy and external weather conditions. Such technology can help unlock benefits of predictive maintenance, reduced energy consumption, and enhanced occupant comfort.
The GPG Program is more than just a federal initiative—it's a powerful engine driving the future of building efficiency, sustainability, and technological innovation from manufacturers across America. By selecting, testing, and validating cutting-edge technologies in real-world federal building environments, GPG plays a pivotal role in reducing energy consumption and operational costs across some of the nation’s largest energy consumers.
The GPG Program should be seen as a strategic ally, with these advancements empowering federal building owners to achieve smarter and more efficient solutions while mitigating the risks associated with unproven technologies. As GSA continues to push the boundaries of what’s possible with energy management technologies, the GPG Program serves as a beacon of progress, proving that innovation is not just necessary—it’s achievable. The set of new technologies selected in 2024 is a testament to that vision, and their successful implementation in federal buildings promises to open new doors for energy efficiency across the broader market.
WHO LEADS THE GPG PROGRAM?
Kevin Powell is the Director of Emerging Building Technologies for the General Services Administration’s Public Buildings Service (PBS) and program director for the GSA Proving Ground (GPG). Powell focuses on identifying innovative technologies, practices, and processes that optimize how PBS designs, delivers and operates more than 185 million square feet of Federal real estate. He brings two decades of experience in building science, design research, and policy analysis. He has a longstanding commitment to smart asset management, deployment of next-generation building technologies, and indoor environmental quality. Powell received his master’s degree in architecture from the University of California at Berkeley.
GEORGIA DELIVERS LOCAL BUILDING INFRASTRUCTURE PROJECTS
KRISTOFOR ANDERSON’S LEADERSHIP POWERS GEFA’S MISSION TO TURN FEDERAL DOLLARS INTO LOCAL IMPACT
BY JULIE CHESNA
Many state energy offices serve as the conduit between federal funding and local energy projects. Acting as the bridge between Washington and local governments, these offices ensure that federal dollars flow smoothly into energy efficiency, infrastructure upgrades, and clean energy initiatives at the community level. By translating broad national goals into actionable local projects, state energy offices can be the catalyst that transforms federal funding into real, on-the-ground progress. Without their coordination, local governments might miss out on these important opportunities.
It’s typically up to the state energy office or other designated state department to take the initiative and drive this process forward, ensuring no funding is left on the table. They must actively engage local governments, streamline applications, and provide the technical support necessary to turn ideas into actionable projects—empowering local governments to capitalize on resources to modernize infrastructure and accelerate the clean energy transition.
The Georgia Environmental Finance Authority (GEFA) stands as a prime example of a state energy office taking decisive action. GEFA has proactively leveraged federal funding from the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) to empower local governments across the state. By simplifying the application process, offering technical guidance, and targeting disadvantaged communities, GEFA ensures that federal dollars are being strategically invested in projects that maximize energy efficiency, grid resiliency, and sustainability. Their hands-on approach, from outreach to execution, has positioned Georgia as a leader in using federal resources to drive real, measurable change at the local level.
At the helm of GEFA’s State Energy Office is a committed and dynamic team led by Executive Director Hunter Hill. Driving the state’s energy programs forward is Kristofor Anderson, the Director of Energy Resources. With 14 years of experience at GEFA, Anderson’s leadership has been instrumental in shaping and expanding the state’s energy initiatives. His strategic vision and dedication are key reasons why GEFA’s energy programs have thrived.
Most recently, GEFA was awarded $2.9M in funding from the Energy Efficiency Conservation Block Grant (EECBG), which will be used to support local governments in implementing energy efficiency projects, upgrading infrastructure, and reducing energy consumption in disadvantaged communities.
Energy Services Media (ESM) spoke with Anderson to gain perspective from his time at GEFA, exploring the lessons learned, future opportunities, and the significant impact of key initiatives like the Energy Efficiency Conservation Block Grant and Energy Performance Contracting (EPC) program.
ESM: Can you give a snapshot of the current state of the Georgia State Energy Office? Has there been growth recently, and what’s driving that?
Anderson: There has been growth, and we’re very busy. I’ve been with the Energy Office for 14 years, and the current environment reminds me of the period during the American Recovery and Reinvestment Act (ARRA) around 2009-2010. We’ve added a few positions and handled extra workload. The real drivers behind this growth are the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), which passed a few years ago. These laws have created or re-funded programs, many of which come through state energy offices via formula funding. We’ve been actively applying for these funds, chasing competitive opportunities, and bringing additional funds into Georgia. It’s been keeping us incredibly busy for the past two years as we’ve worked to secure and distribute the funds to ensure Georgia benefits.
Kristofor Anderson, Director of Energy Resources, Georgia Environmental Finance Authority | Photo by Kaylinn Gilstrap
ESM: Which energy programs have been added in the last few years as a result of BIL and IRA?
Anderson: There are several new programs. One of the big ones is the Home Energy Rebates Program, which was included in the IRA. That brings about $220 million to the state of Georgia through our office, split between two programs.
There is also significant funding for electric grid resiliency improvements in the state. One of those programs is the 40101(d) Program, a formula program for states to receive grid resiliency funds. We also applied for a competitive grant under the Grid Resilience and Innovation Partnerships Program (GRIP). Through GRIP, we received an award of $250 million, which is all for grid resiliency improvements.
The EECBG program, while not new, was actually created during the George W. Bush administration and first funded under ARRA. It wasn’t funded again until the BIL. Now, thanks to the BIL, Georgia has $2.9 million in new funding to distribute to local governments across the state.
In addition, we’re working on a new Energy Efficiency Revolving Loan Fund Capitalization Grant program.
These are just some of the programs we’re involved in. We’ve also gone after other competitive opportunities, and there’s significantly more funding available for our legacy programs, such as the Weatherization Assistance Program and the State Energy Program.
ESM:How has the state energy landscape evolved over the past 14 years you have been a part of the state energy office?
Anderson: There’s definitely been an evolution. When I first started, there was a lot of focus on new renewable technologies like solar and wind, which were just beginning to grow. Today, those technologies are well-established, so we don’t focus on them as much. However, electric vehicles (EVs) and infrastructure have seen massive growth. Ten years ago, we launched a pilot program to fund EV charging stations when very few existed in Georgia. Now, there is a lot of new attention on EVs, and the BIL provides more funding for their expansion.
We’re also talking more about electric grid resiliency. The BIL has a strong emphasis on upgrading our grid, which is crucial for meeting modern demands.
Workforce development is another major focus. As clean energy technologies grow, we need a skilled workforce to support that transition. We’re also dedicated to ensuring disadvantaged communities receive support, especially those that haven’t experienced economic growth in recent years.
ESM: Let’s talk about the Energy Efficiency and Conservation Block Grant (EECBG) program. How has GEFA approached building that program and distributing the funds?
Anderson: The EECBG funding for state energy offices is a formula grant opportunity, so we saw it as an easy decision to pursue. We knew we could secure the funding and use it to invest in good projects for local governments across the state, especially smaller ones.
Once the Department of Energy (DOE) released the guidance and opened the application period, we moved quickly. We assigned a project manager to lead the effort, analyzed our options, and reviewed the DOE blueprints. We also worked with partners to map disadvantaged communities using federal tools, identifying where we could make the most impact. We applied for the funding and were able to secure it pretty quickly.
In the background, we were also figuring out how to allocate the funds efficiently. Our portion of the funding is for small local governments, while larger cities and counties can apply directly to the DOE for their own EECBG funding. We saw this as an opportunity to boost smaller local governments, so we strategized about how to make the application process easy and accessible for them. Many small local governments don’t have the staff capacity to spend a lot of time on applications, so we didn’t want it to be a burden.
We partnered with a nonprofit, Southface, which is a leading organization in energy efficiency and sustainability nationwide. We made Southface available as a technical resource for local governments, helping them think through potential projects, such as building efficiency, vehicle electrification, or community solar. Southface helped a number of local communities put together and submit their applications.
We also worked with other partners, like the Georgia Municipal Association and the Association of County Commissioners of Georgia, to raise awareness and ensure no opportunity was overlooked. We used as many outreach channels as possible to spread the word about the funding opportunity. We wanted to make sure that we didn’t leave any stones unturned.
In the end, we received more applications than we had funding for, so we decided to cap grant sizes at $150,000, limiting the number of projects we could fund. We had a lot of interest, and local governments applied through our simple online application template. It was exciting to see the level of engagement and the number of projects that came in.
ESM: How did you communicate to the local governments that funding was available through GEFA?
Anderson: We used a combination of several communication channels, including email, social media, and webinars, to spread the word. We’ve built strong relationships with local governments through other programs, like the state’s revolving loan fund for water infrastructure; we leveraged those contacts to help us get the message out. Our project manager even made cold calls to local governments that qualified for the grant to ensure they were aware of the opportunity.
ESM: If a local government isn’t awarded funds, does GEFA provide alternative resources or follow-ups?
Anderson: We recognize the demand from small local governments, so we’re trying to make sure we can still support their projects, even if they weren’t funded through the EECBG program. We’re also always looking for new funding opportunities that could come up down the road.
ESM: What impact do you see these funds having on local governments?
Anderson: These funds enable local governments to tackle projects they otherwise wouldn’t have been able to afford, like energy efficiency improvements in government buildings. Beyond that, some projects have expanded into workforce development and EV fleet transitions. These initiatives are not only saving energy but also laying the groundwork for future clean energy work and planning within these communities.
ESM: What were some challenges or lessons learned from building the EECBG program?
Anderson: I think a key lesson we learned is the importance of making it easy for local governments to engage.
Our initial hypothesis was that if we wanted to receive enough applications, we needed to simplify the process. I know some states have struggled to get enough applications for various reasons, so we focused on outreach and making the application process as easy as possible. That approach has proven to be crucial.
In terms of challenges, we did face some difficulty reaching certain communities. Despite using multiple channels, including cold calling, there were a few communities we weren’t able to fully connect with
ESM: Why did you include the energy savings performance contracting (ESPC) blueprint as one of the blueprint options applicants could choose?
Anderson: We included that option because at GEFA, we manage the state’s energy performance contracting program, which was established by law in 2010. We were designated as the program manager for state agencies that want to pursue performance contracts. While we don’t have any direct authority over local government performance contracting, we’ve always aimed to be a resource for them.
We’ve offer technical assistance by providing template documents, a list of pre-qualified ESCOs, and other tools. Over the years, we’ve received calls from local governments interested in performance contracting but unsure where to start. Many of them have never done one before, and while they may have had an ESCO knocking on their door and know they have needs within their buildings, the process can feel overwhelming.
Even for more sophisticated state agencies, performance contracting can be a bit daunting, especially for smaller local governments. That’s why we’ve always wanted to be a resource for them. When we saw that the blueprint was available, we made sure to include it so local governments could evaluate if it was the right fit for them.
ESM: Have there been challenges with the ESPC program, and how have you addressed them?
Anderson: Yes, there have been a lot of lessons learned since the program was first created. Our first project kicked off back in 2014, and since then, we’ve had a good range of projects, which has provided us with valuable insights. We’ve gone through the entire project life cycle multiple times, particularly focusing on the procurement side, and as we’ve helped agencies navigate the process, we’ve gathered a long list of areas that could be improved and challenges to address. The procurement process is long and fairly complex. The way we initially set up the program made it a bit longer and more complicated
than necessary. So, around 2017 or 2018, we took a hard look at the process and made some changes. We streamlined both the RFP and investment-grade audit agreement processes, and I believe we achieved our goal.
Before the changes, the RFP phase required a lot of heavy engineering analysis and facility evaluation from the companies submitting proposals. We worked to reduce that burden, making the process quicker and easier, not just for the energy service companies (ESCOs) submitting proposals but also for the state agencies implementing the projects.
A key lesson we’ve learned is how to better navigate the state requirements—both the legal ones and the best practices we’ve developed over time.
We also learned how to better explain the program to state agencies. We don’t see ourselves as salespeople for performance contracting. Instead, we act as facilitators for agencies interested in the program. Our approach is to present the information and tools they need at events where facility managers and other relevant personnel are and then let them decide if it’s the right fit for them.
ESM: What advice would you give to other state energy offices building their performance contracting programs?
Anderson: I think it’s important to look across the country and see how performance contracting programs are set up in other states. That’s something we spent a lot of time on years ago. We evaluated many contract templates and procurement processes from other states to figure out what was working, what wasn’t, and what best practices we could adopt. Over the years, we’ve made revisions to our program based on this kind of analysis.
Of course, some aspects are dictated by legal requirements, and every state has its own structures that influence how these programs work. One thing Georgia did well when the program was created by law was assigning one agency as the program manager and gatekeeper. This allowed us to work closely with the ESCO community, the state Attorney General’s office, and others to develop what I believe are very sound contract templates and a strong financing structure. This structure also allows us to evaluate how projects are progressing, make adjustments to program policies when needed, and learn about potential risks and pitfalls. In some states, any agency can go out and procure performance contracts on their own, without much structure. In Georgia’s case, having a robust framework and a central agency in charge has been a real benefit, helping ensure that projects are executed in the best possible way.
ESM: What’s the overall impact of performance contracting on the state?
Anderson: I think it’s a good tool—one that’s useful to have in the toolbox. Our former executive director used to describe it as a ‘useful credit card,’ something you can rely on when you don’t have another way to fund a project. That’s how I’ve come to view it as well. It helps agencies complete projects they might not otherwise have been able to pursue if they
lacked the appropriations or maintenance funding. This gives them another option for financing these kinds of projects, and that’s certainly valuable in certain situations.
I also think it allows agencies to take a more holistic view of their facilities. Performance contracting offers the opportunity for a comprehensive energy audit, where a top-notch engineering team can spend months reviewing a facility and identifying ways to save energy, water, and money, while improving operational efficiencies. The audit cost can then be rolled into the overall project financing, which is a great opportunity.
It has also enabled some innovative projects in state agencies. For example, we’ve done work at one of our major universities addressing systems they might not have otherwise considered. It’s sparked creativity, and today, we have agencies exploring how they can incorporate elements like solar generation into their projects—not just to save money through efficiency but to potentially generate revenue through energy production.
This holistic approach to performance contracting is highly effective for certain facilities and agencies, and it’s exciting to see the kinds of projects that can emerge from it.
Right now, we actually have projects that received approval from our board and the Georgia State Finance and Investment Commission to move forward into procurement. One is at the University of Georgia, and the other is at the Georgia World Congress Center. Both are currently in the procurement phase.
ESM: Looking out five years, where do you see GEFA going? Where is the opportunity, and what challenges lie ahead?
Anderson: The major opportunities and challenges ahead revolve around implementing the BIL and IRA funding. Many of these new programs will last for the next four to five years, so our office is going to be heavily involved in ensuring we get the money out the door efficiently and create impactful programs.
We approach this with lessons learned from the ARRA era. Many energy offices remember the boom, but also the bust that followed. We’re mindful of that, and we’re considering how to leverage these programs to create long-term wins.
One of the key things we’re thinking about is how to manage these programs without growing our staff too much, only to have to scale back after the funding cycle ends. We’re focused on finding the right level of staffing and implementing these projects successfully.
This will keep us busy over the next four to five years. I hope the lasting legacy of this effort will be the success of these projects, whether it’s upgrading critical infrastructure like the electrical grid or improving the energy efficiency of homes we’ve weatherized. These are the kinds of lasting impacts we aim to achieve.
Additionally, we have the opportunity to think strategically about more flexible funding that we can tailor to state priorities. This includes focusing on clean energy workforce development, creating programs that can continue beyond the BIL and IRA funding period. We’re also considering how we can use this funding to continue improving and refining our performance contracting program, and possibly support local governments as well.
These are the kinds of things we’re focused on in our office. While there are certainly going to be challenges, we’re excited about the opportunities ahead.
In the years ahead, state energy offices like GEFA will continue to play a pivotal role in shaping the future of energy infrastructure and sustainability at the local level. By bridging the gap between federal funding and community-driven projects, they ensure that resources are effectively deployed, creating lasting impacts that extend far beyond the initial investment. As we witness the growing demands of energy efficiency, grid resiliency, and clean energy advancements, it is clear that the leadership and strategic vision within these offices will be essential in driving progress. GEFA’s proactive approach under Kristofor Anderson’s guidance exemplifies the power of collective action, proving that when state energy offices lead with purpose, communities thrive, infrastructure modernizes, and a sustainable energy future becomes more than just a goal—it becomes a reality.
CELEBRATING PUBLIC-PRIVATE PARTNERSHIPS:
2024 NAESCO MEMBER AWARD FINALISTS
PAST WINNERS INCLUDE:
CENTRICA BUSINESS SOLUTIONS (2023)
MCCLURE COMPANY (2023)
LIGHTING SERVICES (2023)
PERFORMANCE SERVICES (2022)
EXCEL ENERGY GROUP (2022)
ECM HOLDING GROUP (2022)
JOHNSON CONTROLS (2021)
Public-private partnerships between public entities and Energy Service Companies (ESCOs) are the cornerstone of transformative infrastructure modernization. Yet, they are complex and require commitment and trust. ESCOs that succeed in this space aren’t just service providers—they are strategic partners, bringing dedication, innovation, and passion to every project.
To thrive in the public sector market, ESCOs must demonstrate leadership and creativity, continually pushing the boundaries of what’s possible. They understand that modernizing public buildings is about reshaping infrastructure to meet today’s energy demands while anticipating tomorrow’s challenges. These companies blend cutting-edge technologies with innovative financing strategies to optimize building operations, energy performance, safety, and health of our most vital public infrastructure.
The National Association of Energy Service Companies (NAESCO) introduced the NAESCO Member Award in 2021 to recognize and honor the outstanding contributions of its members. This award shows the full potential of public-private partnerships. Efforts recognized by this award include significant or unique savings, innovative project approaches or technology uses, overcoming significant project obstacles, achieving environmental justice goals, and incorporating community development and outreach, among others.
U.S. GENERAL SERVICES ADMINISTRATION (GSA)
OKLAHOMA, OK
In 2020, Ameresco initiated an ambitious multi-year deep energy retrofit Utility Energy Services Contract project for the U.S. General Services Administration (GSA) in partnership with Oklahoma Gas & Electric Company (OG&E). This project targets five federal buildings in Oklahoma, including the 178,342 sq. ft. Oklahoma City Federal Building, with the goal of significantly reducing electricity consumption, enhancing energy efficiency, and strengthening energy
UNIVERSITY OF NORTHWESTERN OHIO (UNOH)
LIMA, OH
The University of Northwestern Ohio (UNOH) partnered with Centrica Business Solutions to modernize its campus infrastructure through energy and building efficiency upgrades. The project spans 28 buildings—residential, athletic, retail, and staff facilities—and is funded through Metrus Energy’s Energy-as-a-Service agreement, allowing UNOH to implement improvements with no upfront costs. Metrus invested $3.1 million in the project, covering LED lighting, HVAC replacements, and water conservation measures.
JERSEY CITY PUBLIC SCHOOLS (JCPS)
JERSEY CITY, NJ
In partnership with DCO Energy, the Jersey City Public Schools (JCPS) district executed a $122 million Energy Savings Improvement Program (ESIP) project, the largest of its kind in New Jersey. This project showcases JCPS’s commitment to sustainability and energy efficiency across its 44 schools and administrative buildings. By implementing measures like solar panel installations, LED lighting, HVAC upgrades, and building automation, the project is expected
resilience. The project is set to deliver $14.9 million in savings over the contract term, reducing annual energy use by 41% and cutting 3,100 metric tons of carbon emissions each year. In its first year alone, the savings were more than $417,000 in energy costs. Utilizing advanced grid-interactive efficient technologies (GEB) such as solar PV, battery energy storage, smart irrigation, and cuttingedge HVAC controls, the project stands as a model for modernizing federal infrastructure. Despite challenges such as meeting Buy American Act requirements and navigating the complexities of an urban site, Ameresco successfully delivered a comprehensive solution that aligns with the government’s long-term sustainability goals. This project serves as a benchmark for future energy-efficient transformations across the federal sector. The project was awarded $800,000 through the AFFECT Grant and received $158,919 in utility rebates from OG&E.
These upgrades are expected to yield significant benefits, including annual savings of 1,922,990 kWh of electricity, 3,054 therms of natural gas, and 7,343,000 gallons of water. They will also provide healthier and more comfortable facilities for students and staff while significantly reducing deferred maintenance. Additionally, the project will reduce carbon emissions by 957 metric tons each year. The financing model ensures that UNOH remains cashflow positive, with service charges from Metrus being lower than the verified energy savings.
EaaS is a pay-for-performance, off-balance sheet financing solution that allows customers to implement energy and water efficiency projects with no upfront capital expenditure. The EaaS provider pays for project development, construction, and ongoing maintenance costs. Once a project is operational, the customer makes service payments based on actual energy savings or other equipment performance metrics, resulting in reduced operating expenses.
to save millions annually, including 9,665,740 kWh of electricity, 308,947 therms of natural gas, and 201,895 gallons of fuel oil. These savings will be reinvested into the district, enhancing educational resources without impacting taxpayers. Innovative financing, including Green Refunding Bonds, ensures the project remains financially sustainable, with energy cost reductions offsetting expenses over time. The initiative also aligns with New Jersey’s broader goals of equitable environmental benefits for all residents, reducing CO2 emissions by 19,347,990 lbs, and improving air quality for underserved communities. DCO Energy has been committed to the development of the Jersey City community through the implementation of a community outreach component that includes a Live Classroom 12-week educational program, a Women in Engineering and Construction 12-week educational program, and a Train-to-Hire program. This project leveraged $64M in ESSER Funding from the American Rescue Plan (ARP) and received a total of $1.7M in rebates from PSE&G and NJ Clean Energy.
CITY OF MENLO PARK, BELLE HAVEN COMMUNITY CAMPUS (BHCC)
MENLO PARK, CA
ENGIE Services U.S. Inc. collaborated with the City of Menlo Park to modernize the Belle Haven Community Campus (BHCC). This state-of-the-art facility includes a microgrid for backup power, solar
HONOLULU DEPARTMENT OF PARKS & RECREATION (DPR)
OAHU, HI
NORESCO partnered with the Honolulu Department of Parks & Recreation (DPR) on a $39 million Energy Savings Performance Contract (ESPC), advancing Honolulu’s Climate Action Plan 20202025 (CAP). The project targets 49 priority locations across Oahu, representing nearly 70% of DPR’s annual utility costs, and is designed to deliver $94 million in guaranteed savings over the next 20 years, reducing annual water use by 42 million gallons The project is a cornerstone of the city’s sustainability efforts, simultaneously enhancing public facilities, improving environmental stewardship, and stimulating economic growth. It has generated
CHINLE UNIFIED SCHOOL DISTRICT (CHINLE USD)
CHINLE, AZ
Veregy’s partnership with Chinle Unified School District (Chinle USD) in Arizona has resulted in a transformative $33.8 million energy project, enhancing efficiency across the district’s facilities. The project includes LED lighting, HVAC upgrades, photovoltaic (PV) solar systems, water efficiency improvements, and advanced control systems seamlessly integrated with existing infrastructure. As the largest tribal energy project in Arizona’s history, the initiative
energy systems with storage, an all-electric pool heating system, a commercial-grade all-electric kitchen, and public electric vehicle charging stations. The project is designed to achieve net-zero energy consumption and aligns with Menlo Park’s 2030 Climate Action Plan. The building also serves as a Red Cross Emergency Center. BHCC aims for LEED platinum certification, reflecting its dedication to environmental leadership. Key innovations include integrated solar thermal for pool heating and a microgrid that reduces reliance on diesel generators, minimizing air pollution during power outages. The project is projected to save $6.87 million in energy costs over 30 years. Additionally, it offers community benefits such as a resident-focused rate structure, EV charging for underserved areas, and educational spaces to promote sustainable practices, making BHCC a model of sustainable development.
over 400 local jobs, with over 80% of the workforce being Hawaii residents, underscoring the project’s commitment to community support. NORESCO worked closely with DPR and environmental stakeholders to adjust construction schedules, ensuring the protection of the honu turtle (the endangered Hawaiian green sea turtle) during critical nesting periods. With its comprehensive upgrades, including dark-sky-compliant lighting, extensive piping replacements to address major leaks at beach showers, advanced irrigation systems to reduce water consumption and improve plant health, and pool pump upgrades, this project sets a new benchmark in sustainable park management. A key improvement for DPR was onsite chlorine generation equipment that eliminates the purchase of liquid chlorine, reduces the need for CO2 for pH control, is more resilient to supply chain disruptions, and maintains a safer environment for maintenance staff. The project also includes a modern, public-facing GIS mapping website with construction updates for transparent communication with Oahu’s 33 Neighborhood Boards, enhancing civic engagement.
supports Chinle USD’s sustainability goals, with expected annual savings of 8,422,172 kilowatt-hours. Financially backed by the Inflation Reduction Act (IRA), the project is set to deliver $73.5 million in lifetime savings, establishing a model of economic and environmental stewardship. Veregy’s commitment extends beyond energy solutions, demonstrated by their swift response to severe flooding in Chinle, personally delivering supplies to support the community. This project is poised to bring enduring benefits to the District and the Navajo Nation, exemplifying the power of innovative solutions and community-focused action. This project leveraged $4.9M in ESSER Funding from the American Rescue Plan (ARP) and an estimated $9M in IRA ITC refunds.
Lifetime savings is based on the expected life of the equipment of 40+ years for the solar panels, expected utility escalation rate, and also includes OM savings that is not included in the savings guarantee.
SEALING THE I&I THREAT
HOW THE CITY OF SPRINGTOWN AVOIDED PREMATURELY PAYING MILLIONS FOR WASTEWATER TREATMENT EXPANSION
BY JULIE CHESNA
Inflow and Infiltration (I&I) from leaking manholes is a serious and costly problem for wastewater treatment plants. Manholes can develop cracks or gaps over time, allowing rainwater and groundwater to seep into the sewer system. This infiltration dramatically increases during storms, overwhelming the wastewater infrastructure with large volumes of excess water that should not be treated. As a result, the plant’s capacity is strained, leading to higher treatment costs, potential overflows, and increased wear on equipment. In severe cases, the plant may reach regulatory capacity limits, forcing municipalities to prematurely invest in costly expansions.
DEPLOYING A SOLUTION
ECM Holding Group (ECM), a subsidiary of EMCOR Group, Inc., is a solutions-based provider for Energy Service Companies (ESCOs). They saw a rise in Environmental Protection Agency (EPA) consent decrees targeting utilities for inflow and infiltration
issues and quickly acted to identify a solution they could provide ESCOs. They began to evaluate options to repair manhole leaks, looking at everything from cement liners to epoxy-based solutions, but found that nothing held up. After thorough testing, they landed on a polyurethane-based product manufactured by OBIC. The spray-applied, flexible lining systems are designed to meet the demands of municipalities and industrial wastewater systems, addressing concerns such as hydrogen sulfide corrosion and structural deterioration—extending the life of the manhole by 50 years. In 2021, they began offering the solutions to clients. The manhole lining technology was adopted by several ESCOs because they were already engaged in wastewater treatment projects, and this technology coupled well with smart meter projects that had budgeted for infrastructure upgrades. ECM has seen success utilizing demo sites to allow municipalities to experience the installation process and see the product.
Photo provided by ECM Holding Group
Shawn Hunsberger, Vice President of Business Development of ECM, explains how the innovative manhole lining solution can be part of a more comprehensive infrastructure project for smaller municipalities; “We can combine manhole lining with other infrastructure solutions, such as cure-in-place piping (CIPP) to line sewer pipes. At treatment plants, we can also help reduce chlorine costs with on-site sodium hypochlorite generators, which reduce the need for store-bought chlorine. For smaller cities, ESCOs sometimes hesitate to take on projects because of their size, but we’ve seen success in adding manhole lining projects to enhance overall infrastructure upgrades.”
SPRINGTOWN, TX
Springtown, TX—a rural community of 4,700 residents just outside Fort Worth—was facing a looming $5-6 million expense to prematurely expand its wastewater treatment plant, as I&I issues were pushing the facility to its capacity limits. However, in 2023, the city took a proactive approach by selecting Ameresco through the TIPS Co-op, utilizing Texas Local Code 302, to rehabilitate their manholes as part of a comprehensive Energy Savings Performance Contract (ESPC). The project didn’t just stop at I&I repairs—it also included an Advanced Metering Infrastructure (AMI) system, meter replacements, and copper and lead surveying to meet stringent EPA requirements.
Ameresco enlisted ECM to provide the innovative manhole lining solution, addressing the city’s I&I problem and extending the life of its wastewater infrastructure. Chad Nobles, Sr. Account Executive at Ameresco, stated, “We were well aware of the timeline and construction schedule associated with the AMI system, meter replacements, and the lead and copper survey. We also knew the city had an inflow and infiltration issue in its wastewater system. That’s when we partnered with ECM to tackle the problem through manhole rehabilitation. The city had been addressing a few manholes here and there but had never taken a comprehensive
approach until this project.” This cost-effective and timely intervention prevented an otherwise unavoidable multimilliondollar expansion. Energy Services Media (ESM) spoke with David Miller, the City Administrator, and Christina Derr, the Assistant City Administrator, to dive deeper into the project’s impact and explore how they successfully financed the initiative.
ESM: What were the issues the city faced with the manholes and I&I problems?
Miller: We had a significant I&I issue at our wastewater treatment plant, primarily caused by rainwater and surface runoff entering our manholes. We had about 223 manholes identified as having a major impact on the plant due to leakage. The leakages were causing our capacity at the wastewater treatment center to spike, we were around 67% capacity. The Texas Commission on Environmental Quality (TCEQ) has regulations around wastewater treatment capacity; we could not exceed 70%, and if we did, we needed to expand the treatment plan quickly. We were approaching the point where we’d need to plan for an expansion, which would have cost us $5–6 million. With this project, we expect a reduction of about 17–23% due to the manhole repairs, which buy us more time.
ESM: What was the cities initial thoughts on the manhole lining solution presented by Ameresco?
Miller: We were impressed because the only other option would have been to rebuild 223 manholes, which would have cost millions. The lining provided a more affordable, long-term solution.
ESM: Why did you choose an energy savings performance contract to finance this project?
Miller: It’s a safeguard for the city. With performance contracting, if we don’t achieve the projected savings, the energy service company is responsible. It’s a win-win—improved efficiency in operations and guaranteed results.
Sewer manhole after rehabilitation
Photo provided by ECM Holding Group
Photo provided by ECM Holding Group
“With performance contracting, if we don’t achieve the projected savings, the energy service company is responsible. It’s a win-win—improved efficiency in operations and guaranteed results.”
—David Miller, City Administrator
“Take a hard look at the opportunity cost of not moving forward. There are plenty of creative funding mechanisms available, including grants and other options, especially for energy-saving projects.”
—Christina Derr, Assistant City Administrator
ESM: Did you face any challenges getting the performance contract approved?
Miller: Not at all. We did a lot of groundwork, educating the council well in advance, so they were on board from the start.
Derr: We started educating the council at least six years before the project began. As the need for upgrades grew more urgent, it became clear to them that this was the best option. The availability of ARPA (American Rescue Plan Act) funds also helped us move forward.
ESM: What recommendations would you give to other city administrators considering a performance contract for upgrading water infrastructure?
Miller: Do your homework. If you are considering an AMI system, ensure that it meets the overall needs of your community. Take the time to carefully study the cost savings and evaluate whether the investment is worth it by determining how long the return on investment (ROI) will take. It’s also crucial to work with a reputable company that understands the business thoroughly rather than choosing a company offering cut-rate services.
Make sure you educate both your council and your citizens. Christina, for example, has done an excellent job of communicating the changes to our residents about the meter replacements, and as a result, we’ve only had about six or seven complaints out of nearly 1,700 utility customers. That’s a small number, considering many are adjusting from outdated meters that were less accurate to new ones that provide precise readings, which may cause some to see higher bills.
Derr: If I were talking to another city official, I’d stress not to be intimidated by the price tag. Take a hard look at the opportunity cost of not moving forward. There are plenty of creative funding mechanisms available, including grants and other options, especially for energy-saving projects.
When we approached the project with openness, we found ways to make both the AMI and manhole rehab happen. So, don’t be shocked by the initial price—look at the long-term savings over 10, 15, or 20 years, and you’ll likely see that the investment pays off.
Yes, it’s expensive, especially for a small city like ours with limited excess revenue. But with federal dollars playing a key role and other opportunities such as grants or low-interest loans, it’s possible to make it work.
Springtown’s manhole rehabilitation project stands as a powerful example of how municipalities can tackle urgent infrastructure issues while safeguarding their financial future. By leveraging performance contracting and cutting-edge technology, the city extended the life of its manholes, improved water infrastructure, and avoided premature expansion costs. For other cities facing similar challenges, Springtown’s strategy offers a clear lesson: don’t wait for the crisis to force your hand. Instead, take control by combining smart technology, flexible financing, and long-term planning. With federal funds like ARPA and other grants available, even small municipalities can undertake ambitious infrastructure upgrades that deliver substantial cost savings and operational improvements.
THE MISSED OPPORTUNITY IN BUILDING RETROFITS
HOW COMMERCIAL REFRIGERATION TECHNOLOGY CAN INCREASE ENERGY SAVINGS AND PROJECT SIZE FOR PERFORMANCE CONTRACT PROJECTS
BY
MARYBETH YANNESSA, PROJECT ENGINEER, REFRIGERATION TECHNOLOGIES LLC
What do The Pentagon, School Districts, Fort Knox, Fort Campbell, The VA, Universities, Restaurants, Pharma, Hospitals, and Convenience Stores have in common? They all have commercial refrigeration, and they are all sucking the cash out of your client’s bottom lines. Look, I get it. It is not the shiny object that you may be looking for when performing audits, but it’s low-hanging fruit and a missed opportunity that can deliver substantial payback, helping to fund higher ROI projects.
WHAT TYPES OF SAVINGS ARE YOU MISSING OUT ON?
Depending on the electric rates (some areas are higher, and some are lower per kHw), the average savings just to change a Shaded Pole Motor in an Evaporator Box to an ECM Motor is 68%; the reduction in the defrost is 68% and the compressor run time is 31% offering an overall average saving of 45% for walk-in boxes. Plus, if the facility has reach-in refrigeration, the savings for a reach-in cooler—80% and freezer—65% energy! That is the hard savings. What about the soft savings? Carbon Reduction—Checked! Refrigerant Reduction—Checked! Predictive versus Reactive Analytics— Checked! Less overall Maintenance—Checked! The list goes on and on about the soft savings that our end-user clients are seeing.
SO, WHAT IS THE ROI?
Installed, again, based on kHw rate—less than 7 years! Do we have your attention yet? Not only are you missing out on all of the new projects that you may be looking at today, but open up the filing cabinets and start mining all of the past clients who you missed this money-saving opportunity.
In short, Refrigeration Technologies, through ArtikControl™, is able to help our customers ably shoulder the burdens of energy costs and environmental pressures by taking a customized and comprehensive approach to achieving optimal energy management.
Inevitably, each customer comes to Refrigeration Technologies with different refrigeration configurations, equipment, needs and objectives, but all share the common requirement of reducing their energy consumption and cutting their utility costs. No company is better able to help commercial refrigeration customers achieve these goals.
If you would like more information on how to best save energy and, more importantly, money in your refrigeration operations, please contact us at 888-286-3091 or by email at myannessa@refrigerationtechnologiesllc.com.
Refrigeration Technologies ArtikControl™ consistently monitors your walk-in coolers/freezers and sends out alarms via text and email alerts when problems arise so that any failure is discovered and addressed as quickly as possible.
INDUSTRIES IN HOT WATER:
INNOVATIVE TECHNOLOGIES TO ADDRESS RISING ENERGY COSTS THROUGH RENEWABLE COMBINED HEAT AND POWER
Hot water is a fundamental component of operations for a diverse set of industries, such as food and beverage processing, commercial laundry, hospitality, healthcare, and manufacturing. In these sectors, hot water is used for cleaning, sanitization, and can be a fundamental component of the production process, making it a non-negotiable part of daily business. Despite its critical role, most companies are unaware of the exact cost of generating and using hot water. According to the U.S. Department of Energy, commercial and industrial facilities use more than 50 billion gallons of hot water annually. Some industries, such as food processing and healthcare, can attribute as much as 25% to 30% of their total energy consumption directly to hot water generation and heating. The U.S. Environmental Protection Agency (EPA) reports that up to 70% of the total water consumption in a food processing facility is heated, driving significant energy use.
Despite its importance, companies rarely have a clear understanding of their hot water costs because these expenses are spread across various utility bills and cost centers. Electricity and gas bills lump the energy used for water heating with other consumption, water bills show total usage without indicating how much was heated, and steam systems mix costs for heating and production. Additionally, hidden heat losses from inefficient equipment and distribution lines further blur the true cost, making it difficult for companies to pinpoint inefficiencies and optimize usage.
The Business Impact of Hidden Hot Water Costs
The U.S. Energy Information Administration (EIA) reported a 15% increase in average industrial electricity rates over the past three years, and projections suggest that this trend will continue, particularly in states like California, New York, and Texas.
For businesses in energy-intensive industries, these increases can translate into millions of dollars in additional operating costs. For example, in California, industrial electricity prices are among the highest in the country, averaging $0.15 per kWh compared to a national average of $0.075 per kWh. Natural gas prices have similarly surged, making it more expensive to run gas-fired water heaters and boilers.
Natural gas prices in the U.S. are projected to increase throughout 2024 and 2025 due to increased demand and supply issues, with the average price expected to approach $3.00 per million BTUs (MMBtu). This trend includes an 11% rise in natural gas consumption for electricity generation, while industrial usage is expected to see only slight decreases.
If these trends persist, commercial and industrial companies will face growing pressure to find cost-effective ways to manage and optimize their energy usage, particularly for hot water and heating needs.
RENEWABLE COMBINED HEAT AND POWER: A STRATEGY FOR OPTIMIZATION
When it comes to optimizing hot water and heating, new technologies are paving the way for significant advancements. Among the most promising is Photovoltaic-Thermal (PVT) technology, which combines traditional photovoltaic (PV) and thermal systems into a single, high-efficiency panel.
Traditional Combined Heat and Power (CHP) systems, also known as cogeneration systems, have long been used to generate both electricity and heat from a single energy source like natural gas, diesel, or coal. These systems work by producing electricity and capturing the waste heat from the generation process for heating purposes. While this approach is more efficient than generating power and heat separately, it has several downsides. Most traditional CHP systems rely on fossil fuels, leading to carbon emissions that conflict with sustainability goals. They also come with high upfront costs due to the need for specialized equipment like gas turbines and extensive piping. Additionally, the moving parts and complex components of these systems mean higher maintenance requirements and operational complexities.
“Traditional CHP systems struggle to capture the full value of the heat they generate, especially when demand fluctuates.”
In contrast, Renewable CHP systems using integrated Photovoltaic-Thermal (PVT) technology represent a cleaner, more efficient alternative. Instead of using fossil fuels, PVT panels harness sunlight to simultaneously generate electricity and capture thermal energy, offering the same dual benefits as traditional CHP but with zero emissions. This results in lower maintenance costs and reduced complexity, as PVT systems have no moving parts. Moreover, they are modular and scalable, making it easy to adapt them to changing energy needs, whether installed on rooftops or integrated into larger industrial setups. Traditional CHP systems struggle to capture the full value of the heat they generate, especially when demand fluctuates. PVT panels ensure nearly all the captured thermal energy is either used or stored efficiently, maximizing the overall energy yield.
PVT as Part of a Comprehensive Decarbonization Strategy Incorporating PVT panels into a broader energy strategy is not just about improving efficiency—it’s about laying the foundation for a zero-emission future. By pairing PVT technology with other advanced systems such as energy storage, heat pumps, and smart controls, companies can build a holistic energy solution that maximizes renewable energy use and minimizes fossil fuel dependence.
The current Investment Tax Credit (ITC) and Production Tax Credit (PTC) under sections 48 and 45 of the tax code are set to expire for projects that do not commence construction before December 31, 2024. This deadline is crucial for companies planning to leverage these credits as part of their energy strategies. After this date, the existing credits will be replaced by the new Clean Electricity Production Credit (section 45Y) and the Clean Electricity Investment Credit (section 48E) established by the Inflation Reduction Act. These new credits will apply to projects placed in service from 2025 onwards and are more technologyneutral, providing incentives for facilities that achieve net-zero emissions. But the future is uncertain.
For companies looking to invest in PVT systems, acting now to secure the full 30% ITC could significantly enhance the financial viability of their projects. Waiting until 2025 may result in reduced incentives and a longer payback period, as the eligibility criteria and value of the new credits might differ. Thus, initiating construction before the end of 2024 is critical to capture the most favorable tax benefits
“The integration of PVT technology into renewable CHP systems represents a revolutionary shift in how companies approach energy management. By capturing both power and heat in a single, high-efficiency solution, PVT panels provide an elegant and sustainable alternative to traditional CHP.”
2025 NATIONAL HOT WATER STUDY
To address the lack of visibility and understanding of hot water costs by industry, Green CHP has partnered with Columbia University’s Climate School on a groundbreaking National Hot Water Study, which aims to benchmark hot water costs by industry in the United States.
The study will include a comprehensive quantitative and qualitative analysis, including detailed evaluations of utility bills, operational data, and best practices. By focusing on sectors such as food and beverage, dairy processing, corrections, nursing homes, manufacturing, and healthcare, the study will deliver industry-specific benchmarks, actionable insights, and sustainable management practices aimed at reducing hot water costs and enhancing overall efficiency.
The study will commence in January 2025 with a detailed report expected to publish by Fall 2025.
A CALL TO ACTION FOR ESCOS AND INDUSTRIAL LEADERS
The integration of PVT technology into renewable CHP systems represents a revolutionary shift in how companies approach energy management. By capturing both power and heat in a single, high-efficiency solution, PVT panels provide an elegant and sustainable alternative to traditional CHP. For companies looking to optimize their energy use, reduce costs, and meet ambitious sustainability goals, PVT systems are poised to play a transformative role in the U.S. energy landscape.
Historically, ESCOs have focused on delivering energy savings through lighting retrofits, HVAC optimizations, and building automation. However, there is a significant opportunity for ESCOs to expand their services by addressing inefficiencies in hot water and heat usage—areas that are often overlooked but can represent up to 40% of a facility’s total energy consumption.
By taking a more holistic approach, ESCOs can help clients design and implement integrated solutions that optimize the use of hot water, reduce waste heat, and leverage renewable energy technologies. This could involve conducting detailed energy audits to identify the specific hot water usage patterns and inefficiencies within a facility, deploying monitoring systems for real-time tracking, and recommending technologies that can maximize overall system efficiency.
EMILY NORCROSS
Emily Norcross is founder and CEO of Green CHP, a renewable energy and data company that integrates advanced combined heat and power systems with real-time data services, enabling businesses and communities that depend on hot water to reduce energy costs, meet sustainability goals, and drive AI and machine learning applications for optimized performance and efficiency.
To learn more about Green CHP, visit usgchp.com
ADDRESSING THE “ELEPHANT” IN THE BUILDING ENVELOPE
BY HARRY RAHMAN, DIRECTOR, XPEL
Windows are the weakest part of the building envelope from a heat gain, heat loss, and safety/security perspective, yet they are neglected in most ESCO projects.
Per the National Fenestration Rating Council (NFRC), inefficient windows can cost the U.S. $50 billion annually in energy waste. Some of the ways to address inefficient windows are replacing them with high-performance ones, using PV, using a shading device, or applying an all-season window film. Each has its pros and cons.
Replacement windows
Great performance
PV Renewable
Interior shades Helps reduce glare
Low cost
Low cost
Great ROI
All Season window films
Multiple benefits (see below)
Very high cost; ROI can be 30 plus years
Can disrupt business
ROI is long and high capital expenditure
Durability still needs improvement
Ineffective for heat reduction, as heat is already inside
Reduces natural light
Better results if used on windows ten years or older
Window film technologies have come a long way and are now able to keep heat where it belongs: outside in the summer and inside in the winter.
Vision™ All Season Intelligence 65 by XPEL can lower the solar summer heat gain of an existing double pane window up to 60% while increasing wintertime insulation by over 32%. Adding window film technologies to existing windows provides a sustainable and cost-effective solution to reducing the energy bills in a building. On single pane, the numbers are even more impressive, lowering solar heat gain by up to 75% and increasing wintertime insulation by up to 45%.
To fit into the Energy Service Company (ESCO) business model, XPEL offers all its services “at risk” including:
• turnkey solution
• project identification
• energy modeling
• commercial warranties up to 15 years covering product and labor costs
• help with rebates/tax incentives
• samples and sample installations
• measurements
• window frame sealing
• baseline window testing
XPEL’s portfolio of over 54 products also addresses safety/security, anti-graffiti, bird strike, decorative and upgrading the exterior look of the windows. To learn more, please contact Harry Rahman at hrahman@xpel.com.
Harry Rahman has had many roles in the window film industry over the last 24 years, from marketing to product development. He has also served on the Board of the industry association in many positions and now heads XPEL’s global architectural division.
XPEL (ticker: XPEL) is a global supplier of films for the architectural and automotive markets. All of XPEL’s architectural products are manufactured in the United States. Based out of San Antonio, XPEL has offices in Mexico, Europe, Asia and Australia. www.xpel.com
HVAC’S INVISIBLE ENERGY DRAIN— AND THE EASIEST WAY TO STOP IT
BY APRIL FRAKES, DIRECTOR, AEROSEAL
With the increasing demand for better performance and energy efficiency in commercial buildings, and higher standards being implemented in more places with greater frequency, meeting efficiency requirements is becoming more and more challenging. One large, but traditionally difficult to address challenge is HVAC inefficiency, and the unseen waste due to duct leakage. Aeroseal’s duct sealing technology addresses this issue with a scientifically driven approach that not only reduces energy wastage but also improves the overall performance of HVAC systems and occupant comfort—all with little to no disruption to the building or the people in it. This article delves into the technical mechanisms behind Aeroseal’s duct-sealing technology, the methodology used to achieve energy savings, and its application in Energy Service Company (ESCO) projects.
THE TECHNICAL CHALLENGE: DUCT LEAKAGE IN HVAC SYSTEMS
In commercial buildings, HVAC systems typically account for nearly half of the total energy consumption. A significant portion of this energy is lost due to duct leakage, where conditioned air escapes through gaps, cracks, and holes in the ductwork before it reaches the intended spaces. According to studies, up to 75% of duct systems exhibit leakage levels of 10-25%, with some systems losing up to 40% of their heating and cooling energy. This not only reduces the efficiency of the system but also increases the operational load on HVAC components, particularly fans and compressors, which work harder to maintain the desired airflow and temperature.
Duct leakage also impacts indoor air quality (IAQ), allowing unconditioned air to infiltrate the system, which can introduce pollutants, humidity, and temperature inconsistencies. This creates a dual problem: energy waste and compromised air quality. Addressing this leakage is critical for improving both energy efficiency and occupant comfort in commercial settings.
THE AEROSEAL PROCESS: SEALING DUCTS FROM THE INSIDE OUT
Aeroseal’s duct-sealing technology takes a novel approach to solving the issue of duct leakage. Rather than relying on traditional external sealing methods that are labor-intensive and often ineffective in hard-to-reach areas, Aeroseal employs a method that seals leaks remotely from the inside of the ducts.
We start by pressurizing the duct system, and then our patented technology and software assesses duct air loss, determining the quantity of sealant required before the sealing process. Then the automated system remotely injects aerosolized sealant into the ductwork and monitors the process in real-time through a computer-controlled system that continuously measures airflow and leakage. Because the ductwork is pressurized, the particles rush to escape through any cracks or holes, accumulating at these leaks and forming a tenacious but pliable air-tight seal. This process effectively seals any leaks up to 5/8” without compromising other areas in the ductwork. The sealant itself is safe and non-toxic, with no danger posed to building occupants.
This internal sealing process is non-invasive, meaning it does not require extensive access to the ducts themselves, making it particularly advantageous in retrofit applications where ducts may be embedded in walls or ceilings. The sealing is tracked in real-time, allowing technicians to monitor the reduction in leakage and ensure that the system achieves the desired level of airtightness
Aeroseal Duct being implemented in an RTU application
AN ADVANTAGE IN RETROFIT PROJECTS
As big as the problem of duct leakage and HVAC inefficiency is for energy optimization, in most buildings, it is difficult or impossible to address the problem. Traditional HVAC sealing methods call for manual sealing by hand – using either duct tape or mastic or a combination of both, that requires full access to the ductwork. However, in most existing buildings, the ductwork is behind walls and ceilings. Therefore, to reduce duct leakage, improve the performance of the HVAC system, and reduce energy consumption, traditionally requires demolition of walls and ceilings to reach the ductwork, and may require disrupting or dismantling the ductwork or HVAC system itself.
Because Aeroseal is designed to quickly and efficiently seal leaks remotely from the inside of the ductwork, it can:
• Seal leaks throughout the entire duct system, including those in hard-to-reach areas or hidden behind walls—avoiding the costs and labor of demolition and construction.
• Vastly improve the performance of the HVAC system without requiring extensive disassembly or replacement.
• Avoid the human pitfalls of manual air sealing—which may not effectively seal all leaks or accurately assess the extent of leakage.
• Reach tiny cracks and gaps that may be difficult to detect and seal with traditional methods
ENERGY SAVINGS: THE TECHNICAL MECHANISMS BEHIND EFFICIENCY GAINS
The energy savings achieved through Aeroseal’s duct-sealing process are primarily driven by two key factors: improved airflow management and reduced fan power consumption.
1. RESTORING AIRFLOW EFFICIENCY
In a typical duct system with leakage, a portion of the air supplied by the HVAC system never reaches the occupied spaces. For example, in a duct system handling 26,000 cubic feet per minute (CFM) of air, up to 6,000 CFM could be lost through leaks, meaning that only 20,000 CFM reaches the conditioned space. This requires the HVAC system to compensate for the lost air by increasing the airflow from the supply fan, which in turn increases energy consumption.
By sealing the ducts, Aeroseal restores the system’s ability to deliver the intended volume of air to the occupied spaces. This improvement in airflow efficiency translates directly to energy savings because the HVAC system no longer needs to overwork to compensate for leakage. After sealing, a 90% reduction in leakage can be achieved, which restores the airflow and reduces the need for additional fan power.
2. REDUCING FAN POWER CONSUMPTION
The second major source of energy savings comes from reducing the power required by the supply and exhaust fans. The relationship between fan speed and energy consumption follows the fan affinity laws, which state that fan power is proportional to the cube of the airflow. In other words, small reductions in airflow result in disproportionately large reductions in fan power.
How Aeroseal technology works. For demonstration purposes only. Actual application may vary based on the type of HVAC system and ductwork
For instance, after sealing leaks in a system handling 26,000 CFM of air, the leakage is reduced from 6,000 CFM to 600 CFM, allowing the system to meet its airflow requirements at a significantly lower fan speed. This reduction in fan speed can lead to a 30% or more decrease in fan power consumption, depending on the size of the system and the severity of the initial leakage.
In addition to direct energy savings from reduced fan power, sealing duct leaks also reduces the energy required for heating or cooling the air. In systems with significant leakage, unconditioned air can infiltrate the ducts, increasing the load on the HVAC system to maintain temperature and humidity levels. By eliminating this leakage, the system requires less energy to condition the air, further enhancing overall efficiency.
MEASUREMENT AND VERIFICATION OF ENERGY SAVINGS
Aeroseal’s approach to energy savings is not only effective but also measurable. The process begins with an initial audit to quantify the extent of duct leakage and the potential energy savings. After the sealing process is complete, the system is reevaluated to verify the reduction in leakage and the corresponding improvements in airflow and energy efficiency. Aeroseal provides clients with detailed reports that document the preand post-sealing performance, including fan power reductions, airflow improvements, and estimated energy savings. This level of transparency is particularly valuable in ESCO projects, where performance-based contracts often require measurable and verifiable energy savings.
CONCLUSION: A TECHNICAL SOLUTION FOR A WIDESPREAD PROBLEM
Aeroseal’s duct-sealing technology offers a scientifically grounded solution to the persistent problem of duct leakage in HVAC systems. By sealing ducts from the inside, the technology restores airflow efficiency, reduces fan power consumption, and improves indoor environmental quality. For ESCO projects, the ability to quantify and verify energy savings makes Aeroseal an ideal partner for achieving performance-based energy goals. As the demand for energy efficiency continues to grow, technologies like Aeroseal will play a critical role in helping commercial buildings reduce their energy footprints and improve their overall sustainability.
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