Modernizing Infrastructure Without Up-Front Costs

Pennsylvania’s energy savings program enables facility upgrades.

Public sector organizations face the challenge of upgrading aging infrastructure while managing tight budgets and rising energy costs. Pennsylvania’s Guaranteed Energy Savings Act (GESA) program provides a pragmatic solution that allows schools, municipal agencies, and commonwealth facilities to implement large-scale energy and capital improvements without upfront expenditures and immediate capital outlays. By engaging an energy service company (ESCO) through a performance-based contract, agencies can upgrade systems to achieve meaningful energy savings, reduce operating costs, and modernize facilities efficiently and with minimal financial risk. With an arrangement that finances a project over time, facility modernization can shift from a capital challenge into a financially viable and operationally attractive endeavor.

The GESA Program

Established under Pennsylvania’s procurement code, the GESA program authorizes Commonwealth agencies and school districts to enter into guaranteed energy savings contracts with ESCOs. Unlike conventional construction procurement processes based on lowest bid, the GESA framework enables agencies to select an ESCO based on qualifications, value, and fit through a formal RFP process.

The selected ESCO conducts an investment grade audit to identify energy conservation measures such as lighting upgrades, HVAC modernization, and building envelope improvements. The ESCO designs, finances, and implements the project, with the contract structured so that future guaranteed energy savings cover the cost of upgrades. This approach relieves agencies from needing upfront capital or impacting their annual budgets.

The program is open to all Commonwealth agencies and Pennsylvania school districts seeking comprehensive energy and cost-saving strategies to modernize their facilities. GESA fits institutions looking to enhance sustainability, improve operational efficiency, and address critical infrastructure needs without budgetary constraints or delays typically associated with capital funding approvals.

Facility Upgrades No Longer a Financial Hurdle

By eliminating upfront costs, the GESA model removes a significant financial hurdle for public entities, often limited by budget approval cycles. The guaranteed savings mechanism mitigates risk by ensuring payments to the ESCO come from realized energy cost reductions, making the approach effectively budget neutral or cost positive over the contract term. Additionally, agencies benefit from integrated project delivery, improved operational performance, and measurable progress in environmental objectives.

Facility upgrades under GESA commonly include comprehensive lighting retrofits with advanced controls, modern HVAC and temperature regulation systems, enhanced building insulation, window and door replacements, and additions such as photovoltaic arrays or geothermal systems. Indoor air quality improvements and IT infrastructure enhancements may also be part of the project scope depending on site needs.

As a case in point, Ameresco’s engagement with Luzerne County Community College, the GESA-backed modernization is expected to save approximately 4.57 million kWh annually and exceed $11 million in avoided energy costs over 15 years. The project addresses both critical capital renewal and long-term sustainability targets, demonstrating how the GESA program enables impactful and financially-sound upgrades for educational institutions. By addressing critical campus infrastructure, modernizing energy systems, and reinforcing the college’s environmental stewardship goals, Ameresco was able to ensure financial feasibility through guaranteed energy savings.

GESA is Strategic Program for Modern Public Facilities

Pennsylvania’s GESA program represents an innovative mechanism to help public agencies and educational institutions accelerate energy efficiency upgrades and facility modernization without the burden of upfront capital investment. The model’s performance guarantee and flexible contract terms reduce financial risk and open pathways for sustainability-driven improvements.

Facilities decision-makers interested in learning more about leveraging GESA and similar financing models can explore Ameresco’s finance e-book for deeper insight into modern approaches to facility modernization funding. As public sector entities continue to pursue energy and operational savings, GESA offers a reliable, budget-friendly path forward.