Making the Case for Energy Efficiency

Can Texas schools afford to be more energy efficient? A cost-benefit analysis examines a tiered approach to energy investments that can save schools big money on annual operation expenses.

Discussion about more sustainable schools often begins and ends with one statement: It’s too expensive. The realities of funding school construction make it difficult for districts to weigh the short- and long-term benefits of moving their campuses to cleaner, healthier, more energy-efficient environments.

But are energy-efficient strategies cost prohibitive? LPA’s Sustainability and Applied Research team recently worked with in-house designers and engineers, and frequent partner Joeris General Contractors, to explore the cost-benefit analysis of energy-efficient systems in Texas schools, considering the state’s unique financial and energy situation.

“The goal was to really understand what it would take to get to energy independence,” says Ellen Mitchell, LPA’s Director of Sustainability and Applied Research. “We want to be able to have a smart, informed conversation with our clients about up-front costs, return-on-investment and potential savings in annual operational costs.”

Discussion about more sustainable schools often begins and ends with one statement: It’s too expensive. The realities of funding school construction make it difficult for districts to weigh the short- and long-term benefits of moving their campuses to cleaner, healthier, more energy-efficient environments.

But are energy-efficient strategies cost prohibitive? LPA’s Sustainability and Applied Research team recently worked with in-house designers and engineers, and frequent partner Joeris General Contractors, to explore the cost-benefit analysis of energy-efficient systems in Texas schools, considering the state’s unique financial and energy situation.

“The goal was to really understand what it would take to get to energy independence,” says Ellen Mitchell, LPA’s Director of Sustainability and Applied Research. “We want to be able to have a smart, informed conversation with our clients about up-front costs, return-on-investment and potential savings in annual operational costs.”

The study looked at the energy systems for a recent LPA project — the new Sheffield Elementary School in Dallas — and used a tiered approach to examine different levels of investment and associated efficiencies. The first stage focused on passive strategies, such as demand-control ventilation and increased roof insulation, which can dramatically reduce energy demand. Next, the team looked at system alternatives, selecting a variable refrigerant flow (VRF) and a heat pump option, both of which eliminate the need for natural gas infrastructure. The final stage focused on on-site energy generation and evaluating different photovoltaic (PV) options, including what it would take to achieve net zero.

“We were looking at the steps necessary to go from an LPA-designed building that was already exceeding code minimum to a really high-performance facility and up to a true net-zero energy building,” Mitchell says.

The Results

The results illustrate the significant operational savings available from creating more-energy-efficient buildings. From an estimated annual energy cost of around $65,000, an optimized design with a more-efficient HVAC system would cost an additional $250,000 up front but would yield an annual energy savings of $25,600, an almost 40% reduction. Going a step further, adding PV on the roof would cost an additional $570,000 but would reduce the energy costs to less than $10,000 a year, a whopping 85% savings. To eliminate the electricity bills altogether, the school would need a total cost premium investment of around $1 million but would get a 30% rebate to the tune of $245,000 from the IRA for the PV panels. (Instead of a tax reduction, schools can set up an account with the Internal Revenue Service and receive a direct payment.)

Each of these three scenarios would result in a simple payback of 10 to 12 years — potentially much less if energy prices increase, as expected.

“As you work through the numbers, you start to see that there are a variety of ways we could address energy efficiency, starting from reevaluating what we consider best practices all the way to aggressive energy-independence goals,” says LPA Dallas studio director Craig Drone. “It is not a one-size-fits-all solution.”

The calculations also include new incentives available through the Inflation Reduction Act, passed in 2022, which returns money to schools for the installation of energy-efficient and renewable energy systems — benefits never before available to public entities. Researchers also included the reduction in construction costs for an all-electric building when the natural gas infrastructure is eliminated.

“The data gives ISDs an opportunity to make more informed decisions when choosing higher-efficiency systems versus one that has a lesser up-front cost,” says Jorden M. Dial, Director, Client Services, Joeris General Contractors. “ISDs have less maintenance and operation dollars to spread around, especially when so much of those dollars are used on salaries, in a tough recruiting and retention time.”

The research also highlights the challenges to any energy-efficiency calculation in Texas, driven by one basic reality: Energy is still relatively cheap in the state. The average retail price of electricity in Texas is 30% lower than the national average, and 63% less expensive than California, for example, according to data compiled by the U.S. Energy Information Administration (EIA). As a result, the payback period for investing in energy efficiency is longer than with other states, at least at current rates.

“The return might take 10 years, but the life spans of our buildings are typically 50 to 100 years,” says LPA Director of K-12 Kate Mraw.

Beyond operational savings, the analysis didn’t include the intangible benefits found in energy-independent facilities. Energy strategies can play an important role in developing more resilient campuses, able to function no matter what happens to the grid. Texas energy and electricity customers experience the third-highest rate of power outages in the country, with almost 20 hours of outages in 2021, according to the most recent US EIA data.

“If we can make schools less dependent on the grid and keep them operating in all conditions, that’s good for students and the community,” Drone says.

More-sustainable schools are also, by nature, healthier schools. Campuses with natural daylight, reduced energy demand and no fossil fuel combustion save energy and promote a district’s well-being goals. They also serve as teaching tools, putting science and conservation on display on a daily basis.

The data reinforces the importance of including sustainability in the initial planning process, when energy efficiency can be integrated into the design process and tied to the district’s larger goals. In a recent $370 million bond measure, Alamo Heights ISD included a bucket of funds for “efficiency and sustainability,” earmarking dollars to address more-efficient energy-saving systems.

By taking a tiered approach to the initial analysis, districts can find a comfort level that fits their budget and the priorities of their community.

“Districts can test the waters, see the savings and incorporate more strategies into future projects,” says LPA San Antonio studio director Sara Flowers.

On first review, the systems may seem cost prohibitive, but the real world data illustrates there is an attractive return on investment that will save money operationally for years to come.

“So many of our districts are cash poor on the maintenance and operations side and not getting the proper funding,” Flowers says. “Investing in energy efficiency at the earliest stages will free up money for teacher salaries and the other pressing operation needs facing schools.”