Michigan Law allows and encourages the board of a school district, intermediate school district, or local school district to contract for energy conservation improvements to school facilities. These improvements may be paid from operating funds of the school district or from proceeds of bonds or notes issued for energy conservation improvements, or the board or intermediate school board may enter into one or more energy saving performance contracts. These contracts may contain a written financial guarantee providing that the improvements will be paid only if the energy savings are sufficient to cover them.
Energy conservation improvements may include, but are not limited to, HVAC upgrades; lighting retrofits; installing or upgrading an energy management system; motor, pump or fan replacements; building envelope improvements; domestic water use reductions; and upgrading other energy consuming equipment or appliances. (Mich. Comp. Laws 380.1274a) In addition, in 2014 the Michigan Energy Office joined a U.S. Department of Energy challenge for state and local governments to increase public investment in building energy efficiency through energy performance contracting. These highly monitored strategies, along with verified energy savings, allow for a decrease in energy waste and costs for schools and municipalities. With this program, if the annual energy savings are not reached, the selected contractor will reimburse the building owner the difference.