Federal agencies spent more than $1.7 billion last year on energy-efficiency projects, increasing their environmental spend by more than an 80 percent from 2008, reports Federal Times.
About two-thirds of the investments were paid for with appropriated dollars, primarily from the American Recovery and Reinvestment Act, with the remainder financed by private-sector financing arrangements, such as Energy Savings Performance Contracts (ESPCs) and Utility Energy Services Contracts (UESCs), reports Federal Times. Under these programs, contractors pay for renovations upfront and are paid back over time with cost savings that result from reduced energy consumption, according to the article.
Government officials told Federal Times these programs have their drawbacks, such as projects funded through ESPCs, which cost nearly 2 1/2 times what they would cost if funded through direct appropriations.
Officials also said in the article that the ESPCs and UESCs don’t allow for testing of cutting-edge technologies that could have a greater potential to reduce energy because they rely on proven technologies such as energy-efficient lighting to guarantee a return on investment to contractors.
For projects such as generating on-site renewable energy, the Defense Department relies on enhanced-use leases and power purchase agreements, reports Federal Times.
As an example, in October last year, the Army Corps of Engineers signed an agreement to develop a 500-megawatt solar power plant at Fort Irwin in California’s Mojave Desert. The $1.5 billion project will be funded through an enhanced-use lease in which Fort Irwin will purchase power generated by the solar plant at a reduced rate, reports Federal Times.
The U.S. military has been implementing several green initiatives over the past few years including the use of alternative energy such as solar and wind that officials estimate could save millions.