A recent article in the Daily Illini reported on a proposed increase in the "student sustainability fee," a fund which will provide funding for energy-saving initiatives. As an example:
He pointed out that their recent project of replacing Krannert Center’s fluorescent lights with LED’S will pay for itself in three years and save the University roughly $70,000 per year. The committee funded half of the project with a $225,000 grant.
First of all, observe that this statement is mathematically incorrect. If half of the project cost $225,000, then the total cost of the project was $450,000, so it will take about 6.5 years to pay it back at $70,000 per year.
Second of all, observe the economic puzzle. Effectively, the project is an investment with a guaranteed annual rate of return of $70k/$450k = 15.5 percent. So as long as the market rate of interest is less than 15.5 percent, which I assume it is, the optimal strategy of the university is to borrow money to finance this project, and even after paying back the interest they will actually have more money - so they should do that even in the absence of any additional funding from a "sustainability fee."
(Here is an economics article discussing similar anomalies, mostly in the context of individual purchasing decisions like whether to buy a new refrigerator.)