City of Cadillac Advances Energy Infrastructure with Schneider Electric
Michigan city upgrades seven sites with privately funded energy infrastructure
Cadillac, a city of around 11,000 people in northern Michigan, has approved a $4.4 million energy infrastructure upgrade covering seven municipal buildings. The project includes solar panels, battery storage, microgrid systems, HVAC improvements, LED lighting, and electric vehicle charging points. Notably, the city will pay nothing upfront.
Instead, Budderfly, a US energy services company, is financing the entire project. The city will repay the investment through operational savings over time. Schneider Electric is supplying the technology and coordinating the project through its Accelerating Resilient Infrastructure Initiative, a programme designed to connect local authorities with private capital and technology providers.
The Cadillac City Council approved the project on 20 July 2024. Installation will focus on buildings including city hall and the wastewater treatment plant. These facilities will gain the ability to operate independently during grid outages, a feature the city considers essential for maintaining public services during extreme weather or power failures.
Private capital meets public infrastructure needs
The financing model behind this project is known as energy-as-a-service. Under this arrangement, Budderfly owns and maintains the equipment. The city makes payments based on the energy savings the new systems generate. Consequently, Cadillac avoids the need to raise capital, issue bonds, or allocate budget reserves.
This approach is becoming more common in the United States. Many municipalities face tight budgets and ageing infrastructure. Traditional funding routes can be slow and politically difficult. Energy-as-a-service models allow cities to upgrade buildings and systems without immediate fiscal pressure. The contractor takes the performance risk.
For Cadillac, the appeal is straightforward. Marcus Peccia, the city manager, stated that the project would modernize critical infrastructure, strengthen service reliability, and bring predictability to energy costs. All of this happens without requiring taxpayer investment upfront.
Schneider Electric has positioned its initiative as a mechanism to speed up infrastructure deployment. The company reports that it now works with more than 40 partners across the US, including financiers, developers, and technology suppliers. The aim is to reduce the time it takes for communities to implement energy projects, particularly those involving resilience and decarbonisation.
Microgrid systems designed to maintain operations during outages
The centrepiece of the Cadillac project is a hybrid microgrid. This system connects solar generation, battery storage, and building loads across multiple sites. During normal conditions, the sites draw power from the grid and supplement it with solar energy. When the grid fails, the battery storage kicks in to maintain power to essential systems.
Microgrids of this type are particularly valuable for critical facilities. Wastewater treatment plants, for example, must continue operating to protect public health. City halls and emergency services need reliable power during crises. By installing battery storage and solar capacity, Cadillac reduces its dependence on the regional electricity grid during disruptions.
The project also includes energy management software from Schneider. This technology monitors performance across all seven sites and adjusts energy use in real time. For instance, the system can shift load away from peak times or prioritise battery discharge when grid electricity is most expensive. Over time, this optimisation is expected to contribute significantly to the operational savings that will repay Budderfly's investment.
In addition to resilience, the project addresses carbon emissions. Solar generation reduces reliance on fossil fuel electricity. The HVAC and lighting upgrades lower overall energy consumption. Electric vehicle charging infrastructure prepares the city for fleet electrification. Together, these elements align with broader climate commitments increasingly common among US local governments.
Energy-as-a-service models remove traditional procurement barriers
Cadillac's approach highlights a shift in how smaller cities access modern infrastructure. Traditionally, a project of this scale would require capital budgeting, competitive procurement, and possibly voter approval for bonds. These processes can take years and face political obstacles. Energy-as-a-service contracts compress that timeline.
However, the model also introduces new considerations. The city is entering a long-term contract with Budderfly, likely spanning 10 to 20 years. During that period, the company will own the equipment and manage its operation. The city must trust that the projected savings will materialise and that the contractor will maintain the systems properly.
Performance risk shifts to the provider, but contractual risk remains with the city. If energy prices change unexpectedly or if savings fall short, the city's budget could face pressure. Conversely, if the systems perform better than expected, the city may benefit from lower costs than anticipated. These dynamics require careful contract negotiation and ongoing oversight.
For UK readers, the parallels are clear. Local authorities across England, Scotland, Wales, and Northern Ireland face similar infrastructure challenges. Many councils operate buildings that are decades old, with inefficient heating, poor insulation, and outdated electrical systems. Budget constraints make large capital projects difficult. Energy-as-a-service models, while less common in the UK than in the US, offer a potential route to upgrading public buildings without immediate capital outlay.
What this means for UK businesses and public bodies
The Cadillac project demonstrates how third-party finance can accelerate infrastructure improvements. For UK SMEs working with local authorities, this trend creates opportunities. Councils looking to reduce carbon emissions, improve building performance, or install renewable energy may increasingly turn to private-sector partners who can fund and deliver projects at pace.
Businesses supplying energy technology, building services, or project finance should understand how energy-as-a-service contracts work. These arrangements differ from traditional procurement. The supplier often takes on performance obligations and long-term maintenance responsibilities. In return, they gain a steady revenue stream and control over equipment during the contract period.
UK public sector suppliers should also note the growing importance of resilience in infrastructure planning. Extreme weather events are becoming more frequent. Grid stability faces challenges from the energy transition. Public buildings that can operate independently during outages offer tangible benefits, particularly for emergency services, healthcare facilities, and critical utilities.
For businesses pursuing public sector contracts, particularly under frameworks like Crown Commercial Service agreements or local authority procurement routes, demonstrating expertise in resilience and low-carbon infrastructure is increasingly valuable. Councils are under pressure to meet carbon reduction targets, often with limited budgets. Solutions that combine sustainability, cost control, and resilience are therefore highly attractive.
Eight key points from the Cadillac infrastructure project
- Cadillac, Michigan approved a $4.4 million energy upgrade covering seven municipal buildings with no upfront city funding required.
- Budderfly is financing the project under an energy-as-a-service model, with repayment through operational savings over time.
- The project includes solar panels, battery storage, microgrid systems, HVAC upgrades, LED lighting, and electric vehicle charging infrastructure.
- Schneider Electric is coordinating the project through its Accelerating Resilient Infrastructure Initiative, which now includes more than 40 partner organisations.
- The hybrid microgrid will allow critical facilities like the wastewater treatment plant and city hall to operate during grid outages.
- The Cadillac City Council approved the project on 20 July 2024, prioritising service reliability and energy cost predictability.
- Energy management software will monitor and optimise performance across all seven sites to maximise savings and efficiency.
- The project reflects a growing US trend of using private capital and performance contracts to modernise public infrastructure faster than traditional procurement allows.
Considerations for organisations exploring similar arrangements
Cadillac's project offers a useful case study for UK organisations considering energy infrastructure upgrades. The energy-as-a-service model can work well when an organisation has predictable energy use, ageing equipment, and limited capital. However, it requires careful due diligence.
First, organisations should model the projected savings conservatively. Energy prices fluctuate. Building occupancy can change. Technology performance may vary. Contracts should include clear performance guarantees and mechanisms to address shortfalls. Independent technical review before signing can help verify assumptions.
Second, the contract term matters. Energy-as-a-service agreements often run for 10 to 20 years. During that period, the equipment remains the property of the service provider. Organisations must consider what happens at contract end. Will ownership transfer? Will the equipment need replacing? What are the exit costs?
Third, maintenance and monitoring responsibilities should be explicit. The provider typically manages the systems, but the organisation needs visibility into performance. Regular reporting, access to energy data, and clear escalation procedures are essential. For public bodies, transparency around performance and cost is also important for accountability.
Fourth, resilience features like microgrids and battery storage add value beyond energy savings. However, they also add complexity and cost. Organisations should assess whether resilience justifies the additional investment. For hospitals, data centres, or emergency services, the answer is usually yes. For standard office buildings, the case may be weaker.
Finally, UK organisations should consider regulatory and policy alignment. The Public Sector Decarbonisation Scheme, for example, provides grant funding for energy efficiency and heat decarbonisation. Combining grant support with energy-as-a-service finance can improve project economics. Similarly, Scope 1, 2, and 3 emissions reporting requirements mean that carbon reduction from infrastructure upgrades can help meet compliance obligations.
Where to find further information
The UK government provides guidance on public sector energy efficiency and decarbonisation through the Department for Energy Security and Net Zero. Details on grant funding and policy frameworks are available on the gov.uk website.
For organisations seeking practical guidance on energy management and building upgrades, the Carbon Trust offers resources and case studies. Their website includes information on energy audits, technology options, and finance models.
The Institute of Environmental Management and Assessment (IEMA) provides professional standards and training for sustainability practitioners. Their guidance on environmental management systems can help organisations develop robust approaches to energy and carbon management.
Businesses involved in public sector supply chains may find value in the Crown Commercial Service frameworks, which include routes to market for energy and sustainability services. Information is available through the Crown Commercial Service website.
Finally, our net-zero program supports UK SMEs with carbon reporting, compliance, and reduction planning, helping businesses meet regulatory requirements and prepare for public sector procurement opportunities.