This past summer, the price of oil peaked above $147 per barrel. In early December, prices had dropped a remarkable 60-plus percentage points, to $43. Although not as substantial, electricity and natural-gas prices have also seen reversals.

The energy-price reductions have had a positive impact on Hamilton College’s energy budget for the coming fiscal year. This has been very welcome, and no doubt others throughout the university and college communities have enjoyed this development. Unfortunately, there appears to be a negative to this drawdown in energy costs: It makes justifying sustainable or energy-related projects more challenging.

Energy projects have always faced the “payback period” justification test, which measures return on investment. High energy prices make these projects much easier to validate, but they lose favor as energy prices fall off. Now, with energy prices at their lowest in the past four years, we face the dilemma of justifying these projects even though they have much longer payback periods. Additionally, with energy prices down, we can burn the same amount of energy next year and still see our expenditures for energy come in lower than this past year’s. Why complete an energy project when we are already reaping savings?

With tight budgets forcing cuts in capital and operational expenditures, it would be easy to postpone a focused energy project, or substitute a cheaper but less efficient system for a costly one. But before losing the opportunity to reduce an institution’s energy and carbon footprint, we should explore the rationale for each project and look at the benefits — real and tangible — that it is intended to provide. If we look only at the bottom line in deciding whether to scrap the project, we may lose sight of why the work was proposed in the first place.

If it’s a window-replacement project, for instance, are the existing windows metal-framed, single-pane windows from the 1960s or earlier that have no thermal breaks and create constant moisture problems inside? Do the building occupants find them difficult to open and close? Is the building drafty, and is this related to the current windows? Are heating-response requirements in the winter a result of drafty conditions?

Mechanical systems are another example in which payback periods must be weighed against other factors. Given the volatility of energy prices, at Hamilton we have focused on the long-term benefits of efficiency options while also working to make sure the system we chose fits with the operational expectations of the facility. In the case of our 2004 renovation of Skenandoa House, the former Psi Upsilon fraternity house, our goals in choosing the mechanical system were to eliminate or reduce the number of mechanical components outside the building and minimize the amount of indoor space given to mechanical systems. We also wanted to add air conditioning, give residents individual temperature control, and increase energy efficiency.

We settled on a geothermal system with heat pumps in each room. The choice cost $90,000 above what we would have spent otherwise, with an initial payback-period estimate of nine years. But after we got a rebate from the New York State Energy Research and Development Authority, that period was reduced to three years. We save approximately $11,000 on energy each year, and Skenandoa House is our most efficient campus building.

We should, of course, look to complete projects with the greatest return on our very short dollars. Whatever these might be — heating, cooling, lighting, insulation, or others — we can’t forget that each has other beneficial elements that add value to the project. The decision to go ahead with any project may hinge on its other aspects, and not on the energy value alone. Over time, however, the one lasting element is that the facility uses less energy. That value will fluctuate, but we’ll still realize a savings in resources and a lower carbon footprint for the entire life of that system. —Steve Bellona

Steve Bellona, the Buildings & Grounds January guest blogger, is Hamilton College’s associate vice president for facilities and planning. You can read his previous post here.