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Financing Options for Schools
School districts constructing energy efficient facilities and/or making energy improvements to existing buildings have several financing options available. These options are listed below.
Energy Savings
The monthly energy bill savings can be significant when energy efficiencies are adopted in school facilities. The Oregon Department of Energy has developed a spreadsheet (Excel format) to assist school staff in determining the amount of savings to expect from installing energy-efficient equipment. You may download the spreadsheet in the right-hand column. You must enter your loan amount and energy costs. The spreadsheet tab 1 will calculate the loan costs and benefits; tab 2 will net present value analysis for 10 years; and tab 3 will show the school district's annual net cash flow for the term of the loan. Energy savings can be used to repay energy loans or performance contracts or to purchase school supplies.
Energy Loan Program
The Department of Energy adminsters the Energy Loan Program that provides low-interest, fixed-rate loans for projects that promote energy conservation and renewable energy resource
development. School districts receive special rates. Department of Energy staff are prepared to discuss your school's project. Application forms are on-line, too.
SB1149 Public Purpose Funds
As part of Senate Bill 1149, Portland General Electric (PGE) and
PacifiCorp must collect a public purpose charge from consumers
within their service areas that is equal to 3 percent of the total
revenues from electricity services. A portion of these revenues (10 percent) must go towards energy efficiency efforts in the
public schools within their service areas. The administration of the school public purpose funds is being facilitated by the Oregon Department of Energy in cooperation with the Education Service Districts (ESD) and individual school districts. Contact your local ESD for more information.
To access these funds, schools must follow specific steps as outlined in the flowchart. The Department of Energy has developed an Action Plan for schools that offers step-by-step actions.
Performance Contracting
Performance contracting is an agreement between an energy services company (ESCO) and a building owner to perform a variety of services that will save energy. The ESCO provides an array of services:
  • Conducts a facility energy study
  • Identifies cost-effective projects
  • Designs all aspects of the chosen projects
  • Hires subcontractors
  • Manages the project installation
  • Finances the project
The owner uses the energy cost savings to reimburse the ESCO and to pay off the loan that financed the energy conservation projects. Agreements with ESCOs are typically five to seven-year agreements. For additional information, visit our performance contracting Web page.
Business Energy Tax Credit Program
The Oregon Department of Energy adminsters the Business Energy Tax Credit Program that now allows public entities, including schools, to benefit even though they do not have an Oregon tax liability. A school applies for the tax credit, but includes an Oregon business or individual with tax liability in the process. The school can then pass-through the tax credit to the business or individual for a lump-sum payment equal to the net present value of the tax credit (currently set at 27 percent for projects with eligible costs over $20,000). This new pass-through option offers schools a significant savings to their energy project. Schools must recruit their own pass-through partners. For more information on the pass-through process, see Pass-through Option.

The Oregon Department of Energy is available to assist.
School Program Specialists
Oregon Department of Energy
625 Marion St. N.E.
Salem, OR 97301-3737
(503) 378-4040; (800) 221-8035 (in Oregon)
How much will we save? Spreadsheet in Excel format
Public Purpose Funds for Schools
Energy Loan Program
Business Energy Tax Credit Program
Performance contracting