Green revolving funds
A green revolving fund is a fund dedicated to investing in projects that reduce resource use and utility expenses. Financial savings from those projects replenish the fund for the next round. Money set aside once, spent again and again.
How a revolving fund works
The fund lends
An institution sets aside capital and lends it to a project that will cut energy, water or waste.
The project saves
Lighting, controls or equipment upgrades lower the utility bills.
Savings repay the fund
An internal transfer returns the money from the utilities budget to the fund.
The fund lends again
Each repayment finances the next project. The original capital keeps working.
What the research shows
| Figure | From our 2023 survey of 66 institutions |
|---|---|
| $1.3B+ | Cumulative investment in projects financed by these funds |
| ~2,200 | Projects financed that reduce resource consumption |
| 17% | Typical return on investment |
| 5 years | Typical payback period |
| 90%+ | Respondents who say their fund lets them finance more sustainability projects |
One fund, five rounds of projects
A fund does not need topping up to keep working. At the five-year payback typical in our 2023 survey, $1 million set aside today can finance $5 million of projects over 20 years.
Illustration only. Total projects financed, assuming every repayment is relent at once and ignoring savings kept after payback.
Who uses them
State of Vermont
The General Assembly established a $9.5 million fund. The state energy office has completed more than 50 projects, investing about $9 million and saving more than $1 million a year.
Western Michigan University
Home to the nation's oldest known fund. Since 1980 it has financed more than 100 campus projects at an average annual return of 47 percent.
Colgate University
Colgate used GRITS to track earlier climate action projects and build the case for a fund, established in 2018 with about $800,000.
City of Philadelphia
An LED upgrade at one fire station led the budget office to dedicate $500,000 to more lighting projects across the city.
Airports
We co-authored a comprehensive guide to planning and launching funds at airports with RMI, Cadmus Group and Frasca & Associates, published by the National Academies of Sciences, Engineering, and Medicine.
Local and county governments
We are lead authors of a new implementation guide written for them, commissioned by Lawrence Berkeley National Laboratory and the U.S. Department of Energy.
Vermont, Colgate and Philadelphia figures as reported in Facilities Manager, 2020. Western Michigan figures as reported by the university, 2015.
The Billion Dollar Green Challenge
In 2011 we challenged institutions to invest a combined $1 billion in self-managed green revolving funds. 58 institutions have committed $122 million.
We launched the Challenge with partner organizations at AASHE's annual conference. It remains home to our case studies, sample fund documents and guides.