Shares of Willdan Group Inc (NASDAQ:WLDN) rose 1.9% on Thursday after the company announced it had been selected to implement a $112 million energy savings performance contract with the City of San Diego.
The contract outlines efficiency and decarbonization projects spanning 40 city facilities. Of those, 23 facilities are slated for decarbonization work. The scope further includes the upgrade of 39,000 city-owned streetlight fixtures.
Planned measures span multiple technology areas. The project will deploy energy and water efficiency upgrades and incorporate electrification measures. Battery energy storage systems are included in the work, as are electrification of HVAC and water heating systems and installation of solar infrastructure.
Municipal Energy Program Manager Lindsey Hawes of the City of San Diego described the projects as being "strategically designed to pay for themselves over time, using the money we’ll save in energy and operational costs each month." That characterization frames the contract as performance-oriented, with expected savings intended to offset capital and operating outlays.
The city official also noted that the work aligns with San Diego’s Zero Emissions Municipal Buildings and Operations Policy. The projects are expected to deliver significant carbon reductions, improve local air quality, and enhance building comfort, according to the municipal statement.
For Willdan, the contract represents a substantial assignment consistent with the company’s core business. Willdan provides professional technical and consulting services to utilities, government agencies, and private industry, and this award falls squarely within that specialization.
Context and implications
The contract ties municipal energy savings to capital projects across multiple asset classes - municipal buildings and streetlighting - and bundles electrification, storage, and solar work into a single performance contract. That structure emphasizes leveraging operational savings to fund upfront improvements, as noted by the city representative.
The award prompted an immediate market reaction, reflected in the modest uptick in Willdan’s stock price following the announcement.
Limitations
The statement from the city frames expected outcomes in prospective terms - savings are described as funds that will be realized over time and carbon reductions are characterized as expected. The announcement does not provide a timeline for implementation or detailed financial projections for the savings.