Green Revolving Funds Support Campus Efficiency Upgrades
Many colleges and universities strive to reduce energy waste, become more energy efficient and effectively reduce their environmental impact, but find it difficult to do so without access to a sufficient amount of initial financial capital. The relatively new concept of a green revolving fund (GRF) seeks to solve this problem.
According to Green Revolving Funds: An Introductory Guide to Implementation and Management, a GRF, “is an internal fund that provides financing to parties within an organization to implement energy efficiency, renewable energy and other sustainability projects that generate cost-savings. These savings are tracked and used to replenish the fund for the next round of green investments.” The end result is a self-sustaining fund that can cut costs and reduce environmental impact.
Sustainable Endowments Institute, one of the publishers of the Guide, also sponsors The Billion Dollar Green Challenge. The Challenge, launched in 2011, supports colleges and non-profits in reaching $1 billion of investments in self-managed GRFs to finance efficiency improvements. There are three distinct ways an institution can join the Challenge, the primary one being the establishment of a fund of $1 million or 1 percent of the endowment of the institution within four years.
According to the Campus Sustainability Revolving Loan Funds database, which is run by The Association for the Advancement of Sustainability in Higher Education — the other publisher of Green Revolving Funds — there are a total of 84 loan funds in 80 different institutions throughout the United States, totaling $118,737,518. Of these 80 institutions, 40 are part of the Billion Dollar Challenge, with funds reaching $73,375,000.
The two largest funds are the University of Vermont’s Energy Revolving Fund, totaling $13 million, and the Harvard Green Loan Fund, totaling $12 million. Harvard’s Green Revolving Fund has supported almost 200 projects, including the installation of LED lights in the Bright-Landry Hockey Center, and has yielded more than $4 million in savings per year. The Fund provides the initial capital to a particular department, which must repay the initial loan via the energy savings within 11 years. The end result for the participating department is an efficiency upgrade without any financial cost.
From lighting upgrades to occupancy sensors, there are hundreds of projects available for institutions to take on. With colleges’ “green” statuses having a greater influence on students’ decisions on which to attend, more institutions will undoubtedly begin to use green revolving funds in coming years. Green revolving funds provide a non-traditional avenue for higher educational institutions to commit to increasing energy efficiency with minimal cost.