Targeting Proposition 39 to Help California’s Schools Save Energy and Money

This policy brief by the Climate Policy Initiative analyzes the financing gaps and technical barriers facing K-12 school districts in California to recommend strategies for allocating Proposition 39 funds. The authors argue that because private capital is currently available at low interest rates, Proposition 39 funds should be used as supplemental grants for deep energy-saving projects and as technical assistance, rather than as primary financing for short-payback projects that districts can already afford.

• California school districts are motivated to pursue energy efficiency primarily to achieve immediate budget relief through net bill savings, which leads them to prioritize short-payback measures and projects with generous rebates over those with higher initial costs but greater long-term savings.
• A significant barrier to energy efficiency is the lack of impartial technical assistance to help districts evaluate vendor proposals and navigate financing. While Energy Service Companies (ESCOs) provide audits, districts often view their advice as a sales pitch and desire a neutral resource to vet savings estimates and select contractors.
• Proposition 39 funds should target deep energy-saving projects that districts cannot finance within existing budgets, rather than supporting economical projects like lighting retrofits, which most districts can already finance themselves.
• The effectiveness of Proposition 39 funds depends on a district's existing financial capacity: they should act as a "sweetener" for districts using local bonds or state modernization grants, as additional financial support for districts accessing public/private loans, or as full/partial funding for financially strapped or very small districts.
• Public loan programs like the Energy Conservation Assistance Act (ECAA) and on-bill financing (OBF) are often limited by loan size caps and rigid payment schedules, making them less attractive for larger school-scale projects compared to municipal leases.
• State modernization grants provide a 60% match for renovations of buildings at least 25 years old, but a significant backlog of unfunded projects has developed because the state has fallen behind on issuing bonds to fund these grants.
• Modeling indicates that while lighting and minor HVAC projects are easily financed via leases, major HVAC replacements and on-site generation projects often require additional grant support to be budget-neutral or positive.
• Small school districts are particularly vulnerable to a lack of technical capacity and are less likely to be targeted by ESCO marketing, leaving their energy savings potential largely unknown.

APA

Zuckerman, J., Deason, J., & Benami, E. (2013). Targeting Proposition 39 to Help California’s Schools Save Energy and Money. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2013/05/Targeting-Proposition-39-to-Help-California’s-Schools-Save-Energy-and-Money.pdf

Chicago

Zuckerman, Julia, Jeff Deason, and Elinor Benami. Targeting Proposition 39 to Help California’s Schools Save Energy and Money. Climate Policy Initiative, 2013. https://www.climatepolicyinitiative.org/wp-content/uploads/2013/05/Targeting-Proposition-39-to-Help-California’s-Schools-Save-Energy-and-Money.pdf.

Wikipedia

{{cite report |last1=Zuckerman |first1=Julia |last2=Deason |first2=Jeff |last3=Benami |first3=Elinor |title=Targeting Proposition 39 to Help California’s Schools Save Energy and Money |publisher=Climate Policy Initiative |date=May 2013 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2013/05/Targeting-Proposition-39-to-Help-California’s-Schools-Save-Energy-and-Money.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{zuckerman2013targeting, author = {Zuckerman, Julia and Deason, Jeff and Benami, Elinor}, title = {{Targeting Proposition 39 to Help California’s Schools Save Energy and Money}}, institution = {Climate Policy Initiative}, year = {2013}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2013/05/Targeting-Proposition-39-to-Help-California’s-Schools-Save-Energy-and-Money.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }