Energy Fund 

Overview

The Municipal Energy Fund was established in 1998 to be a self-sustaining source of funds for investment in energy-efficient retrofits at city facilities, so the City could continually reduce its operating costs over time. The City operates 60 facilities and spends $4.5 million per year on energy (out of an annual budget of $288 million in 2005). The Fund is administered by the City’s Energy Office under the supervision of a three-person board, which must approve all projects. The Fund has invested in street light improvements, parking garage lighting, a boiler, two electric vehicles, and photovoltaic cells.

The Energy Fund demonstrates that energy efficiency can pay for itself in the long term. By providing the difficult up-front costs and then capturing 80% of the resulting savings, the Fund not only motivates facility managers to move forward with energy efficient projects, but has the ability to become sustainable in 3-5 years requiring no additional annual appropriations. The Energy Fund projects not only save facilities/departments operating dollars, but also improve the comfort and appearance of City facilities.

Frequently Asked Questions

Why did Ann Arbor identify the need for an Energy Fund? What were the challenges in implementing it?

What was the role of the mayor and city government in creating the Energy Fund?

How is the program financed?

How has the program improved the quality of life in Ann Arbor?

What are the major lessons that would be helpful to other mayors and cities who want to set up an Energy Fund?