[EE&C] stimulus aid for energy savers

[Matt Lucas]

not really new news to those following the stimulus act and its slow
rollout for EE measures, but an interesting update. PACE programs get a
shoutout at the end.

http://www.nytimes.com/2010/04/22/business/energy-environment/22CAULK.html?scp=1&sq=stimulus%20aid%20is%20slow%20to%20reach%20energy%20savers&st=cse


Stimulus Aid Is Slow to Reach Energy Savers


By KATE GALBRAITH
<http://topics.nytimes.com/top/reference/timestopics/people/g/kate_galbraith/index.html?inline=nyt-per>

FOR companies that specialize in the business of saving energy, these
ought to be flush times. Last year’s stimulus package
<http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/economic_stimulus/index.html?inline=nyt-classifier>
devoted at least $20 billion to efficiency measures, more than any other
single law. President Obama
<http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per>
regularly preaches the virtues of better insulation and weatherizing homes.

Yet the efficiency business has not reaped the benefit that it had hoped
to receive. The stimulus dollars — enough to increase the amount of
federal money some state energy offices receive by a factor of 100 — are
still being distributed. Money being doled out by different government
agencies has been delayed by problems like insufficient staff in the
Energy Department and pay requirements for contractors in the stimulus law.

“It’s happening slower than we would like,” said Jim Davis, the
president of Chevron
<http://topics.nytimes.com/top/news/business/companies/chevron_corporation/index.html?inline=nyt-org>
Energy Solutions, a 10-year-old branch of the oil company that is
devoted to energy efficiency and renewable power.

Assuming the money is eventually disbursed and the push to save energy
continues, a handful of big efficiency-oriented companies, including
Chevron Energy Solutions, Johnson Controls
<http://topics.nytimes.com/top/news/business/companies/johnson_controls_inc/index.html?inline=nyt-org>,
Honeywell
<http://topics.nytimes.com/top/news/business/companies/honeywell_international_inc/index.html?inline=nyt-org>
Building Solutions and Lockheed Martin
<http://topics.nytimes.com/top/news/business/companies/lockheed_martin_corporation/index.html?inline=nyt-org>,
could gain substantially. Smaller, more local businesses that perform
energy audits and retrofits for individual homes could also benefit.

“Energy efficiency” refers, largely, to measures that help buildings
save energy. They are numerous and include insulating walls and attics,
changing light bulbs, replacing appliances, sealing leaky building ducts
and improving the performance of heating and cooling systems.

All such measures can be costly initially but should save money long
term. A report last year
<http://www.mckinsey.com/clientservice/electricpowernaturalgas/US_energy_efficiency/>
from the consulting firm McKinsey & Company found that the United States
as a whole could save $1.2 trillion through 2020 by investing $520
billion in efficiency. California, where per-capita electricity use has
remained essentially stable for three decades, is the nation’s longtime
leader in efficiency. Chevron Energy Solutions says the state accounts
for about 50 percent of its business. But, even in California, “we
believe we’ve only just scratched the surface” of the business
possibilities, Mr. Davis said.

Another enormous opportunity lies with the federal government, the
country’s largest consumer of energy, with its vast, aging web of
structures like military bases, postal centers and courthouses.

“The seriousness of the feds in attacking this problem is still a
relatively new development,” said Thomas P. Grumbly, a vice president of
Lockheed Martin, which has a four-year-old efficiency business. Lockheed
representatives recently attended a conference in Europe on how to make
United States embassies green, he said.

Almost any building in the United States is a candidate for
energy-efficiency work, if upfront money is available. Such buildings
include state and local government structures, like schools and city
halls, as well as offices and industrial plants.

A $20 million retrofit project at the Empire State Building that Johnson
Controls is overseeing is projected to reap 38 percent efficiency
savings annually by 2013, at an annual savings of $4.4 million. Stimulus
dollars have reached a few projects. In the Santa Ana school district in
Southern California, Chevron Energy Solutions is improving the energy
efficiency of roofing, heating and ventilation systems. Under the Great
Appliance Swap Out, conducted by Lockheed this spring, New Yorkers got
rebates — as much as $100 for clothes washers, for example — to trade
old appliances for new, energy-efficient models.

But in many cases, efficiency companies say, the stimulus money is still
awaiting distribution. One exception is a weatherization program for
homes, where the dollars have been moving, Mr. Grumbly of Lockheed said.
Last year, more than 30,000 homes were weatherized
<http://www.energy.gov/recovery/reports.htm> with stimulus funds, and
the number is increasing. Seth Kaplan, the clean energy and climate
change
<http://topics.nytimes.com/top/news/science/topics/globalwarming/index.html?inline=nyt-classifier>
program director at the Conservation Law Foundation, says that one of
several reasons disbursement has been slow is that many localities are
not accustomed to a flood of money coming in and do not have the
infrastructure to use it. Another challenge, he says, is a shortage of
labor in the efficiency business — especially for specialized roles like
air sealers.

“Finding somebody who needs a job and who is trained and qualified to be
an air sealer and who you trust and who is available — that’s the hard
part,” Mr. Kaplan said.

Credit markets that remain tight continue to be an issue, Mr. Davis at
Chevron Energy Solutions said, noting that businesses needed private
money to supplement stimulus dollars. But energy prices are creeping up
again as the economy bounces back from recession
<http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier>
— meaning that the incentive to pay for efficiency work is increasing.

Looking ahead, business leaders and entrepreneurs in the efficiency
sector are optimistic.

On the federal level, President Obama signed an executive order
<http://www.whitehouse.gov/the_press_office/President-Obama-signs-an-Executive-Order-Focused-on-Federal-Leadership-in-Environmental-Energy-and-Economic-Performance/>
in October requiring increased energy and water efficiency in federal
buildings. Some of the stimulus dollars for federal building efficiency
are still being awarded by the General Services Administration
<http://topics.nytimes.com/top/reference/timestopics/organizations/g/general_services_administration/index.html?inline=nyt-org>.
“The pipeline is still releasing, so to speak,” and federal agencies are
also finding other ways to finance projects, sometimes through contracts
where the energy-services company pays the upfront costs and gets paid
back gradually, Mr. Grumbly said.

For homeowners, innovative methods of financing efficiency improvements
have cropped up. One of the most talked-about models is
Property-Assessed Clean Energy, or PACE, a state and local program that
allows municipalities to pay the upfront costs of retrofitting homes and
to be repaid through higher property taxes.

The program, which is operating in some California cities, is still in
its infancy, but in theory it will let homeowners improve efficiency
without paying upfront costs, and allow the payments to be transferred
to the next owner if the property is sold.

Congress is considering establishing a rebate program, called Home Star
or, informally, cash for caulkers, to encourage investment in
insulation, efficient appliances and revamped heating and cooling systems.

For the efficiency business as a whole, another benefit could come from
a federal efficiency standard, a requirement that utilities offset a
certain proportion of their growth in demand with energy-saving
measures. Some states already have such a requirement, and Congress
could wrap it into forthcoming energy legislation.

With the prospect of a big effort ahead, the industry says it is
determined to make sure quality standards are maintained. Recent
concerns over some Chinese drywall
<http://www.nytimes.com/2010/04/03/business/03drywall.html> in American
homes serve to underscore that the building business is not immune from
such problems.

Matt Golden, the chairman of Efficiency First, an advocacy organization
whose members include hundreds of efficiency-oriented businesses, said
that quality was something that the Home Star rebate program, which the
group supports, would address “pretty aggressively,” adding, “We’re
going to set up a national quality insurance infrastructure and start
holding contractors accountable,” Mr. Golden said.

--
You received this message because you are subscribed to the Google Groups "EE&C Idea Lab" group.
To post to this group, send email to eec-id...@googlegroups.com.
To unsubscribe from this group, send email to eec-idea-lab...@googlegroups.com.
For more options, visit this group at http://groups.google.com/group/eec-idea-lab?hl=en.