Financial Energy Conservation Projects at Independent Colleges and Universities.

Factors affecting financial decisions for energy conservation projects at independent colleges and universities and methods that may be used when making a financial investment decision are examined, along with sources of funding for the projects. Projects that result in the conservation of energy resources might, in a time of extreme shortages, enable an institution to keep operating. Another factor in considering implementation of energy conservation projects concerns the recognition that there is a limited supply of resources, and investments that promote the most efficient use of those resources result in their retention. Two methods may be used when making a financial investment decision: constant dollar pricing or anticipated pricing. An illustration of an investment proposal is presented that shows the many variables that influence the cost of investment in energy-saving programs. The ideal situation for encouraging investment is a rising fuel price and a decreasing rate of return (interest). The investment decision becomes more complex when competing alternatives exist. Different energy-saving possibilities provide varying fuel savings, requiring larger or smaller investment amounts. Varying degrees of flexibility are associated with different projects. Once computations have been made to determine the feasibility of various alternatives, sources of funding, internal or external, must be found. Internally, savings resulting from energy conservation programs may be channeled back into new items of equipment or energy-saving systems. A bank loan, federal programs, and fund-raising are other alternatives. (SW)