Energy

The New Economics of Campus Sustainability

How Energy Efficiency and Demand Management Can Unlock Operational Savings

Higher education institutions are under growing pressure to reduce emissions while managing tighter budgets. As capital becomes harder to secure and operational costs continue to rise, the traditional approach to campus sustainability—relying on major capital projects or donor-funded initiatives—is no longer enough. To stay resilient, colleges and universities must rethink their energy strategies through a financial lens.

Energy efficiency and demand management are emerging as powerful levers in this shift. These solutions offer a faster path to savings, often without the need for major upfront investment. By optimizing how buildings consume energy and when they use it, schools can cut costs, lower emissions, and improve operational performance across the board.

Energy Efficiency: The Unsung Budget Hero

While energy efficiency doesn’t always make headlines, it remains one of the most effective—and financially accessible—tools for universities looking to cut operational costs and reduce emissions. On many campuses, especially those with aging infrastructure, buildings often operate with inefficient HVAC systems, outdated lighting, and poorly managed controls. Over time, these issues add up—not just in wasted energy, but in inflated utility bills and deferred maintenance backlogs.

The good news? Even modest efficiency improvements can deliver meaningful returns. Simple measures like aligning HVAC schedules with actual building occupancy, tightening temperature setpoints, or using outside air for “free cooling” during shoulder seasons can lead to immediate savings. And while deeper retrofits—such as upgrading motors, replacing legacy BAS components, or tightening building envelopes—require more planning, they often pay for themselves within a few years.

These projects are especially compelling for universities, where energy costs can represent one of the largest controllable operating expenses. A mid-size research university might spend $10–20 million per year on utilities. A 10–15% reduction in consumption through targeted energy efficiency initiatives could free up millions annually—resources that can be redirected toward academic priorities, student programs, or deferred maintenance.

Importantly, energy efficiency upgrades also often qualify for utility incentives, rebates, or third-party financing options like energy performance contracts (EPCs), which allow campuses to implement improvements with little or no upfront cost. In today’s funding-constrained environment, these mechanisms make energy efficiency one of the rare budget-neutral strategies that simultaneously improve resilience, cut emissions, and unlock operational savings.

Practical Measures That Deliver Real Results

Across campuses of all sizes, a handful of targeted efficiency measures consistently deliver strong returns:

HVAC Scheduling Optimization

Adjusting heating and cooling systems to match building occupancy can cut HVAC energy use by 10–30%, depending on the building type and usage patterns. More advanced campuses are incorporating occupancy sensors and zone-level control logic to drive even deeper savings. The key challenge is often behavioral—ensuring that academic and administrative units are aligned with proposed schedule changes.

Building Automation System (BAS) Upgrades

Recommissioning or upgrading BAS controls allows teams to better monitor and adjust energy use. Savings of 15–25% are typical when systems are properly tuned. However, integrating legacy BAS platforms with newer technologies can be complex. More institutions are layering advanced analytics or middleware on top of legacy systems to avoid full system overhauls

Energy Management Systems

Deploying a centralized EMS allows facilities teams to monitor, analyze, and optimize energy use across the campus. These systems provide visibility into real-time and historical consumption data, enabling early detection of anomalies, inefficient schedules, or faulty equipment. In the last two years, the biggest gains have come from integrating EMS with demand management algorithms and fault detection tools – or choosing a partner (like Noda) that includes all of these capabilities in a single, unified platform – to create a holistic operational picture. While implementation can require coordination across departments, the long-term benefits in operational efficiency and transparency – as well as the ability to move the needle on sustainability commitments – make energy management solutions a smart and strategic investment for most campuses.

Variable Frequency Drives (VFDs)

Adding VFDs to pumps and fans allows for dynamic load adjustment and can yield 20–40% savings for those systems. These upgrades are especially valuable in variable-load buildings like labs, athletic centers, or student unions. Recent installations are increasingly bundled with motor replacements or integrated into smart controls for even more responsive performance.

Lighting Projects

Switching to LED lighting can reduce lighting energy use by 50–70%. While many campuses have already made the switch, recent projects have shown that the next wave of savings often lies in more granular upgrades—such as integrating LED systems with occupancy sensors, daylight harvesting controls, or smart building platforms. One challenge in recent years has been ensuring interoperability between legacy lighting systems and modern smart controls, which can require additional investment in lighting control infrastructure. Additionally, campuses that implemented early-generation LEDs may now be due for replacements with newer, more efficient models.

Insulation and Envelope Improvements

Enhancing insulation or sealing building envelopes helps reduce heating and cooling loads, with average savings of 10–15%. These projects often require capital investment, especially for older or historically significant buildings with limited retrofit flexibility. However, recent advances in thermal imaging and envelope modeling allow for more precise targeting of problem areas, making these upgrades more strategic and less disruptive. Schools that have prioritized envelope improvements report not only energy savings but also improved occupant comfort and reduced maintenance issues from moisture or air leakage.

Importantly, many of these projects can be phased in over time, prioritized by payback period or impact, and paired with local utility incentives or low-interest financing.

Demand Management: Timing is Everything

Just as important as how much energy a campus uses is when that energy is consumed. Demand charges—which are based on the highest spikes in electricity use during a billing period—can account for 30–70% of a university’s electricity bill. Automated Demand Management (ADM) is a strategic solution that helps facilities teams control these peaks by automatically shifting or reducing energy loads when it matters most.

How ADM Works

Modern ADM solutions leverage building automation systems, historical consumption data, weather forecasts, and occupancy patterns to predict when peak demand is likely to occur. Using machine learning and real-time data, these systems automatically adjust equipment schedules, lighting, HVAC setpoints, and other flexible loads to avoid spikes—often without noticeable impacts on comfort or operations.

For example, a campus may pre-cool a building in the early morning when demand is low, then reduce HVAC activity during peak grid hours (typically mid-afternoon), maintaining comfort while avoiding high charges. Similarly, non-essential systems like water features, ice machines, or electric vehicle chargers can be deferred until off-peak hours.

The Benefits of ADM

The benefits of ADM go well beyond the electric bill. By reducing demand charges, ADM can unlock significant operational savings—often with limited upfront investment—especially on campuses with large, dynamic energy loads. Reducing peak load also contributes to overall energy optimization and complements more traditional efficiency measures.

From a grid perspective, ADM helps campuses act as “good grid citizens” by lowering stress on aging infrastructure during periods of high demand. It’s a win for emissions too: peak demand windows are often powered by fossil-fuel peaker plants, so avoiding those spikes directly reduces a campus’s carbon footprint. And as more campuses invest in solar and wind, ADM becomes a critical tool for timing energy use to match renewable availability—maximizing the value of those clean energy investments.

Key Considerations for Implementation

Integration with Existing Systems: ADM solutions often integrate with existing EMS or BAS platforms. Ensuring compatibility and access to reliable real-time data is essential.
Building Prioritization: Not all buildings are equally suited for ADM. Start with buildings that have flexible loads (e.g., gymnasiums, administrative offices, dining halls) and clear usage patterns.
Staff Engagement and Training: Facilities teams must be engaged in setting parameters and understanding overrides. Transparency builds confidence in the system.
Coordination with Campus Stakeholders: Academic and administrative calendars, special events, and lab research schedules may require special handling. Stakeholder communication is key to avoiding conflicts.
Measurement and Verification: Use metering and analytics tools to track results, report savings, and fine-tune performance over time.

Don't Forget Behavior Change: Engaging Students in Campus Efficiency Initiatives

While campus facilities teams tend to do the heavy lifting behind the scenes when it comes to energy efficiency, students can also be a valuable (and perhaps untapped) resource in your energy program's arsenal. Engaging students with efforts to save energy will not only enhance campus sustainability initiatives, but fosters a broader culture of environmental responsibility that can pay dividends over time. Here are four proven strategies, with real-world examples and key lessons from recent years:

Dorm Energy Challenges

Dorm competitions – like the annual Residence Energy Challenge at Santa Clara University – have long been a staple of student engagement. What’s changed in recent years is the rise of digital dashboards, real-time feedback, and gamification tools. Students are more motivated when they can see their impact immediately, and inter-dorm rivalries help boost participation. Successful programs offer small incentives—like pizza parties or eco-swag—and are timed to coincide with peak usage periods (e.g. winter heating or end-of-semester crunch).

Energy Ambassador Programs

Training students to be peer educators or energy ambassadors is a powerful way to scale engagement. These programs not only drive energy awareness but also build career-ready skills in communication, project management, and data analysis. To maintain momentum, successful programs often link ambassador roles to coursework, internships, or work-study opportunities. At Cal State Humboldt, the Sustainable Humboldt Innovative Futures Trust goes a step further than traditional campus ambassador programs, utilizing student fees to fund renewable energy and energy efficiency projects on campus, and ultimately encouraging active collaboration among students, faculty, and staff.

Academic Integration and Living Labs

Many schools, especially research universities, are actively leveraging operational data in coursework and research, allowing students to analyze building energy data, propose solutions, and even earn funding to pilot new ideas. This kind of integration helps sustainability come alive in the classroom and creates a feedback loop between operations and academics. In recent years, “living lab” models have expanded beyond STEM fields—into economics, public policy, and even design—giving a broader swath of students a stake in campus sustainability. Notably, Lafayette College has implemented this "living lab" approach, wherein students in civil engineering analyze the energy data of campus buildings to identify opportunities for energy efficiency improvements. This hands-on experience integrates academic learning with practical sustainability efforts.

Real-Time Dashboards

Making energy use visible through real-time monitoring systems and live public dashboards is a proven engagement tactic; these tools support classroom learning, promote accountability, and help sustainability offices tell compelling stories about progress, while keeping students, staff, and faculty members engaged. Many of the latest energy management solutions offer dashboards that are more mobile-friendly and visually intuitive, and which can often be integrated into campus apps or digital signage – ultimately making them more accessible than ever. And the benefits are clear: just ask the University of Michigan, which achieved energy savings of 8.2M kWh in 2023 through transparent monitoring and reporting and targeted improvements.

By involving students in both the strategy and execution of campus energy goals, colleges can harness their creativity, enthusiasm, and peer influence—while educating the next generation of sustainability leaders.

Your Checklist for Success

Campus sustainability and facilities teams can use the following checklist to identify areas for improvement and uncover actionable opportunities:

Have we benchmarked all major buildings using ENERGY STAR Portfolio Manager or an equivalent tool?
Do we have a current energy audit for each large building (completed within the last 5 years)?
Are lighting systems across campus fully converted to LED?
Are HVAC systems scheduled based on actual occupancy or usage patterns?
Have we upgraded or recommissioned our building automation systems in the last 3 years?
Are VFDs installed on major mechanical equipment (e.g., pumps, fans)?
Are we tracking and reviewing energy use and demand at the building level in real time? Do we have an energy management system in place?
Do we have an automated demand management strategy in place to reduce peak load charges?
Have we taken advantage of local utility incentives or green financing programs?
Is there a formal sustainability or climate action plan that includes energy performance goals?
Are students, faculty, and staff engaged in energy-saving initiatives or behavior change campaigns?
Do we have a process in place to evaluate and reinvest savings from energy initiatives?

Final Thoughts

As higher ed institutions face increased scrutiny over both financial stewardship and climate commitments, energy efficiency and demand management programs can provide a rare win-win: they deliver measurable financial returns while accelerating progress toward sustainability goals. And forward-thinking universities aren’t waiting for the next round of funding or the next state mandate. They’re acting now to modernize their energy strategies—starting with the data, systems, and schedules already in place.

In an era of shrinking budgets, the economics of sustainability have never made more sense.By embracing a pragmatic, data-driven approach to energy, colleges and universities can free up resources for core academic priorities—while advancing their mission to lead on climate.

About Noda

Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.