The Inflection Point for Campus Energy Is Here. The Playbook Has to Change.
True campus stewardship means seeing the full picture, from the chiller plant to the classroom and putting outcomes on the line
Something has shifted in higher education, and it is not just enrollment numbers.[GU1] [TP2] Visit any campus built or expanded during the construction boom of the 1990s and 2000s, and the signs are everywhere. Infrastructure is failing due to continued shifting maintenance to tomorrow’s problem. Buildings have lighting systems designed for another era of electricity pricing. HVAC units’ cycle on fixed schedules regardless of occupancy. Much of the operating equipment in the buildings and central energy plants is well past its expected life. Across U.S. higher education, the deferred maintenance backlog now exceeds $112 billion.1 The average campus building system is 62 years old.1 And the workforce responsible for all of it? Forty percent of facility managers are projected to retire by the end of this year, with a shortage of 225,000 HVAC technicians expected over the next five years.3
These challenges are not hypothetical; they are immediate and intersect with multiple aspects of university leadership responsibility. Higher education saw a surprising 1% gain in Fall 2025, but a closer look at the data suggests this uptick may be a temporary stabilization rather than a long term trend. Increased utility volatility, stricter sustainability commitments, constrained capital budgets, and heightened student expectations for the campus experience all contribute to the current pressures facing higher education institutions.
This moment represents a critical inflection point. While not a crisis in the conventional sense, it signals that traditional operational approaches will no longer sustain institutional missions in the coming decade. Campus leadership must rethink its approach to energy and facilities management projects, since the capital, staffing resources, and operational capacity that were previously available have shifted.
THE OLD MODEL IS BREAKING
For years, campus facilities have followed the same routine: build new spaces, run systems on fixed schedules, put off maintenance, and look for funding only when something breaks. This approach worked when utility costs were predictable, enrollment was rising, and the power grid was stable. That is no longer the case.
The scope of aging extends well beyond the central plant. Across most campuses, the inefficiency is widespread. Lighting systems installed fifteen or twenty years ago consume far more energy than modern alternatives. Building automation systems operate in silos, unable to coordinate heating, cooling, and ventilation across facilities in any intelligent way. Water systems run without the metering or controls needed to identify waste. Roofing, insulation, and building envelopes have degraded quietly, increasing thermal loads that drive up energy consumption in ways that rarely appear in a single line item but accumulate relentlessly across the operating budget.
A recent flash survey of 113 college and university CFOs found that only 31 percent said facilities decisions were fully integrated into institutional strategy.10 The majority described alignment as partial or inconsistent. Two-thirds said their institutions try to balance strategic planning with responding to urgent needs, which, in practice, often means urgent needs win.10
For presidents and boards, this creates a quiet but compounding liability. When facilities are treated as cost centers rather than strategic assets, the result is reactive spending, fragmented decision-making, and a campus that slowly falls behind, building by building, system by system.
THE DEMOGRAPHIC CLIFF CHANGES THE MATH
Beginning with this year’s high school graduating class, the number of traditional college-age students will decline sharply, a projected 13 percent drop to 3.4 million graduates by 2041, down from nearly 3.9 million in 2025.8 Enrollment has already fallen 8.4 percent from its 2010 peak.5 The share of students applying to ten or more schools has more than doubled, meaning competition for every enrolled student is fiercer than ever.4
For CFOs, the math is unforgiving. Fewer students mean less tuition revenue, tighter operating budgets, and greater pressure to extract more value from existing facilities. Yet over the past two decades, many institutions expanded their physical footprints faster than enrollment grew, leaving campuses with more square footage than they can adequately maintain, let alone optimize. Classrooms average less than 60 percent occupancy,7 and every underutilized space still costs money to heat, cool, light, and maintain.
For presidents and enrollment leaders, the pressure runs in parallel. Research shows that roughly two-thirds of undergraduates factor campus facilities into their college decision.6 Prospective families on campus tours are not just evaluating new buildings. They are noticing worn hallways, inconsistent temperatures in residence halls, outdated lighting, and the general sense of whether a campus is genuinely cared for or simply kept running. One higher education researcher describes the campus tour as the “million-dollar walk” because of its direct impact on enrollment yield.10
This is the double bind that makes the inflection point so urgent. The campus itself has become both a recruiting tool and a financial liability. Stewardship is no longer a facilities conversation. It is an enrollment conversation, a financial planning conversation, and ultimately a board-level strategic question.
WHY ENERGY IS THE LEVER THAT MATTERS MOST
Utilities and energy infrastructure typically account for 5–10% of total institutional budgets, making them among the most financially significant expenses leadership can actively manage.11 Beyond cost, energy systems determine comfort and reliability in every classroom, lab, residence hall, and medical facility. They are central to progress on sustainability commitments that students, donors, and regulators increasingly expect. And they represent one of the largest concentrations of deferred risk on the balance sheet: when energy infrastructure fails, the disruption does not stay contained. A central plant failure can cascade across an entire campus, simultaneously affecting research, housing, healthcare, and academic operations.
But the problem is not limited to the plant itself. Energy waste is distributed across every building on campus. Inefficient lighting in older academic buildings. HVAC systems running at full capacity in spaces with minimal occupancy. Domestic hot water systems are operating without modern controls. Cooling towers and pumps that have not been rebalanced in years. Taken individually, none of these are catastrophic. Taken together, they represent millions of dollars in avoidable annual spend and a carbon footprint that is far larger than it needs to be.
Most campuses still operate these systems using static schedules, siloed data, and fixed setpoints; approaches designed for a grid and a cost structure that no longer exist. Peak electricity usage alone can account for 30 to 70 percent of a commercial electric bill, according to the National Renewable Energy Laboratory.9 Institutions that cannot actively manage when and how they consume energy across the full campus, not just the central plant, are leaving significant money on the table while exposing themselves to avoidable cost spikes.
The technology to operate differently already exists. AI-driven optimization platforms can coordinate central plant equipment, building-level systems, and distributed energy resources in real time, responding simultaneously to grid signals, weather forecasts, and actual building loads. In our work optimizing central plants and campus energy systems across North America over the past two decades, we have seen firsthand that the institutions achieving the strongest results are those that pair this technology with deep operational expertise and a willingness to rethink how the entire campus consumes energy. These are not theoretical capabilities. They are delivering measurable reductions in energy spend, peak demand charges, and carbon emissions on campuses today, often without major capital investment. The constraint is not technology. It is the operating model.
THE PARTNER PROBLEM
This is where the conversation requires honesty. The market for campus energy services has grown significantly, and there is no shortage of firms offering assistance. But the models on the table vary enormously in scope, risk alignment, and long-term value, and most address only part of the problem.
Some providers focus narrowly on engineering assessments and capital project scoping for the central plant. That is useful work, but it still leaves the institution responsible for funding, executing, and sustaining results over time. Also, it rarely addresses the distributed inefficiencies across the rest of the campus. Others offer financing structures that shift capital off the balance sheet but come with rigid contract terms and limited operational transparency. Still others bring strong technology platforms but lack the hands-on expertise to operate complex, multi-asset energy systems across dozens of buildings day in, day out.
The deeper issue is that most of these approaches treat energy as a standalone problem. They optimize one layer, the equipment, the financing, or the controls, without addressing the campus holistically. But the challenges facing higher education do not exist in isolation. A campus with aging infrastructure is also facing workforce shortages, enrollment pressure, sustainability mandates, water and waste inefficiencies, and constrained capital. The energy strategy has to account for all of it.
What presidents, CFOs, and boards should be evaluating is whether a potential partner can see the full picture: how central plant performance connects to building-level operations, how lighting, water, and ventilation factor into total campus efficiency, how operational decisions flow through utility spend and maintenance budgets, and how technology and human expertise have to work together to sustain results over years and decades. That is not an equipment vendor. It is not a financing mechanism. It is an operating partner with deep domain expertise, a proven technology platform, and the willingness to put outcomes on the line.
WHAT THE NEXT DECADE DEMANDS
The institutions that will thrive through the demographic cliff and the energy transition share a few characteristics. Their leadership teams are treating the physical campus as a form of capital, one that, like an endowment, requires discipline and active management to generate long-term value. They are moving facilities decisions out of the back office and into the boardroom. They are using data not just to monitor individual systems but to make better decisions about where to invest, what to retire, and how to align every square foot of campus with an institutional mission.
And they are rethinking what it means to partner on energy and facilities. Rather than looking for a vendor to install equipment or a financier to structure a deal, forward-thinking presidents and CFOs are seeking operational partners who can take holistic responsibility for campus performance, combining decades of central plant optimization expertise with modern AI-driven technology, addressing everything from chiller sequencing to lighting retrofits to water system efficiency, and aligning financial outcomes so that everyone succeeds or no one does.
The inflection point is not coming. It is here. The campuses whose leadership recognizes it and acts with the right strategy and the right partner will be the ones that do not just survive the next decade but come out of it stronger, more efficient, and more competitive than ever.
The ones that wait will find out what deferred decisions cost when the leeway for error is gone.
References
1. APPA & CBRE. (n.d.). Higher Ed Facilities Forum: Deferred maintenance backlog and average asset age in U.S. higher education.
2. Bain & Company. (2023). The financially resilient university.
3. Bureau of Labor Statistics. (n.d.). Occupational outlook and workforce projections for facilities management and HVAC technicians.
4. Common App. (2025, February). Trends in college application behavior: 2014 to 2023.
5. EducationData.org. (2025, March). College enrollment statistics.
6. Ezarik, M. (2022, December 11). Survey: How campus facilities factor into college choice. Inside Higher Ed.
7. Gordian. (2025). The state of facilities in higher education (12th ed.).
8. Lane, P., Falkenstern, C., & Bransberger, P. (2024, December). Knocking at the college door: Projections of high school graduates (11th ed.). Western Interstate Commission for Higher Education.
9. National Renewable Energy Laboratory. (n.d.). Peak demand charges and commercial electricity cost structures.
10. Selingo, J. (2026, January). From building to stewardship: Why the everyday care of campus facilities shapes trust, value, and the student experience.
11. Brailsford & Dunlavey, & P3 EDU. (2024). Higher education energy public‑private partnerships: 2024 state of the industry report. https://www.p3edu.com/wp-content/uploads/2024/12/BD-2024-Higher-Education-Energy-P3-Report.pdf
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