Ways to finance deep energy retrofits from around the world

Ways to finance deep energy retrofits from around the world

Source: The Fifth Estate     By David Thorpe  March 2019

(Article condensed and this is partial section; see link for full article below)

It’s not possible for the world to just “fuel switch our way out of global climate disruption” according to one construction industry observer. We have to invest significantly in making buildings energy efficient at a rate much greater than we do now.

But as anyone in this game knows, the financial returns on investing in eco-retrofitting buildings are hard to capture. That isn’t stopping people from trying, with Great Britain, the USA, and Canada taking very different route

Utilities are financing retrofits in the USA

As might be expected, in the USA it’s left to the private sector utilities to find ways of funding energy retrofits. You might wonder why they would want to, but it’s often cheaper for them to do this than invest in new generation plant.

As a result, utilities across the US spent $7.9 billion (AU$11.4 billion) on energy efficiency programs in 2017. Investments specifically targeted at affordable multifamily buildings have grown significantly in recent years.

Non-profit affordable housing providers who are members of Stewards for Affordable Housing for the Future received an average of $750/unit (AU$1057) in utility incentives and consequent annual utility bill savings exceeding $125/unit (AU$176) at participating properties. But there remains an estimated $16 billion (AU$22.55 billion) savings potential in the sector. 

That’s partly because of the many barriers that exist. Occupants of these houses have limited time or capability to participate in these programs and while industry players have done their best to make it as easy as possible, there is a way to go.

These energy efficiency upgrades fall into three main categories: 

  1. whole building retrofits
  2. direct installation of efficient appliances, and 
  3. prescriptive and custom incentives, or product rebates.

California’s Low-Income Weatherization Program is one example. Others are the New York State Energy Research and Development Authority’s Multifamily Performance Program and CenterPoint Energy and Xcel Energy’s Multifamily Building Efficiency Program in Minnesota.

In Pennsylvania, the PECO Smart Multifamily Solutions Program offers building owners direct installation measures for lighting and water efficiency measures in common areas and units, at the same time assessing properties for potential energy savings.

Prescriptive programs offer financial contributions for standard energy efficiency projects like HVAC or lighting upgrades. 

Others offer custom financial incentives for more complex projects. Examples of these are the Consumers Energy Multifamily Program in Michigan and the ComEd Low-Income Multifamily Program in Illinois, where owners can improve their HVAC systems and install efficient light bulbs or appliances or apply for incentives to save money on other upgrades.

These programs have shown that several barriers can be overcome if tackled the right way

These ways are:

  1. Free or highly subsidised measures address one of the biggest barriers to efficiency in rental properties — the split incentive.
  1. Whole-building incentives based on energy savings thresholds encourage deeper retrofits and help owners make more cost-effective investments and benefit from greater bill savings.
  1. One-stop-shops or technical assistance overcome the problem of residents’ low capacity to manage retrofits by offering a single point of contact for everything.
  1. Programs targeting multifamily-specific issues such as common areas and measures or metering make it much easier to get people on board.

Read more and the full article at https://www.thefifthestate.com.au/innovation/design/ways-to-finance-deep-energy-retrofits-from-around-the-world/

Comments by RG:  Interesting read about how energy upgrades are financed in different areas. Here in the USA the Utilities play a major role. Contact me here on my site for help and to discuss the help available to you.

 

 

 

 

Energy-Efficiency Programs Benefit Us All

Energy-Efficiency Programs Benefit Us All

Source:  Power Magazine   by Aaron Larson    2.1.19

Utility-sponsored energy-efficiency programs have always seemed like a contradiction to me. Obviously, power companies make money by selling electricity, so encouraging customers to install energy-efficient light bulbs and high-efficiency appliances seem similar to a candy company providing weight-loss counseling.

Of course, most utilities that offer energy-efficiency programs don’t have a choice. Many states have implemented policies that require power companies to promote energy efficiency. Texas was the first to adopt an energy-efficiency resource standard (EERS) in 1999, but at least 23 other states have established EERSs since then. And a handful of other states have policies on the books to encourage energy efficiency, even if they haven’t mandated reductions.

A Successful Energy-Efficiency Initiative

Minnesota implemented its EERS in 2007. It requires utilities to develop plans to achieve energy savings of 1.5% of average annual retail sales each year. The “Conservation Improvement Program” (CIP), as it’s called, is designed to help Minnesota households and businesses use electricity and natural gas more efficiently—conserving energy, reducing carbon dioxide emissions, and lessening the need for new utility infrastructure.

CIP is funded by ratepayers and administered by electricity and natural gas utilities. The Minnesota Department of Commerce, Division of Energy Resources oversees CIP, ensuring ratepayer dollars are used effectively. Currently, 140 of Minnesota’s 213 electric and natural gas utilities are covered under the statute requiring CIP programs.

Typical utility programs for residential customers include such things as energy audits; rebates on high-efficiency heating, cooling, and water-heating appliances; rebates on efficient lighting products; and air conditioner cycling programs. Similarly, commercial and industrial customers are often offered rebates on high-efficiency boilers, chillers, rooftop units, motors, drives, lighting, and lighting control systems. Building recommissioning studies and manufacturing process improvements are also sometimes offered.

In an effort to inform future utility program strategies related to Minnesota’s CIP, the state commissioned a study led by the Center for Energy and Environment (CEE), which teamed with Optimal Energy and Seventhwave to conduct the analysis, with participation from a broad range of energy stakeholders in the state. Results were published in a 136-page report released in December. It shows that Minnesota is having good success with its program—electric utilities, as a whole, have met or exceeded the state’s 1.5% energy savings goal each year since 2011—but how long can that go on? Once every household has installed LED light bulbs and high-efficiency appliances, the savings become harder to come by.

Innovation Continues

There is an infamous quote (which some say is apocryphal, but I still love it) attributed to Charles H. Duell, who was the commissioner of patents in the U.S. from 1898 to 1901. He is credited with saying, “Everything that can be invented has been invented.” If true, he obviously didn’t have a creator’s mind, and couldn’t have imagined we’d be walking around with smartphones and making fun of him on a thing called the internet.

I guess my point is that new efficiency improvements are undoubtedly on the horizon. It’s unlikely the world will ever stop innovating and the cost for new products that today seem outrageous will very soon become economic. That’s just the way it works.