As cities search for ways to cut costs, they’re finding that energy efficiency is a good strategy.

The economic impact of pursuing energy-efficiency projects can be amplified by adding renewable energy projects like solar installations under long-term power-purchase agreements (PPA). In one such example, Englewood, Colo., recently announced combined energy-efficiency and solar implementations that are designed to save the city $130,000 in first-year annual energy costs.

The city recently contracted with Ameresco, Inc. to provide an energy efficiency retrofit to existing buildings aimed to reduce electric and gas consumption.

At the same time, the city decided to enter into a 20-year PPA for 300 kilowatts of photovoltaics installed on four city buildings. That’s about 4 percent of the city’s entire electric consumption following the energy-efficiency retrofits, according to George Tocquigny, Ameresco’s regional director for the Rocky Mountains.

Because of the nature of rebates, the city is adding the PV systems before it completes the energy retrofits. Usually it makes sense to complete energy efficiency retrofits, and using savings from the retrofit projects to help finance the renewable energy installation.

“It might seem out of order,” Tocquingy said. “But the first thing they did was embark on the energy efficiency project.”

Under the terms of the energy efficiency project, Ameresco is required to produce the projected energy savings, allowing the city to know exactly how much their energy consumption would be reduced.

With the knowledge that the city would reduce its electric and gas consumption by 17 percent under the contract with Ameresco, the city could plan for the solar project, according to Tocquigny.

“So the reason that we dedicated the solar project first is that we were on a very accelerated timeline” he said.

He explained that some of the attractive Xcel Energy rebates were expiring at the end of October and that the city had to speed up its plans to receive those incentives.

The solar power may cost more at first, but the city is looking at the project long-term.

“Savings on the solar project will come from recognizing the difference in the rate as compared to what excel’s energy rate is in any one year of the term,” Tocquigny said.

Looking forward, Englewood could opt to add more solar with Ameresco.

“However at any time you put in a PPA, the economics are hugely dependent on the incentives in place,” he said.

And the deal Englewood got won’t be the same as a future deal, unless Xcel Energy or another entity offers the same rebates or the price of PV falls to the same level.