Driving Change in Energy Efficiency: A Carrot or a Stick?

• 

  Your Email: *

  Your Name: *

  Send To: *

  Enter multiple addresses on separate lines or separate them with commas.

  You are going to email the following: Driving Change in Energy Efficiency: A Carrot or a Stick?

  Message Subject: (Your Name) has forwarded a page to you from GreenBiz.com®

  Message Body: (Your Name) thought you would like to see this page from GreenBiz.com®.

  Your Personal Message: *
  
• 
• 
• 

Despite rapid advances in technology, we still use 16 percent more energy than we did 25 years ago. Since the 1970s we have made improvements in energy efficiency but we have added more energy consumers: lighting, air conditioning, computers, printers and data centers, etc. As a society, we have two major challenges:

1. Reduce energy use, cost and foreign energy dependency. This issue harms economies, increases inflation and creates political tension. 

2. Reduce CO2 emissions that are causing harm to the environment.

But how do we start this change? What is the best path to kick us off center and begin meaningful change in increasing energy efficiency in our buildings?

Legislation and programs can be created to change behavior, but it is important to balance rewards and punishment. If we focus only on programs that reward behavior (carrots) then there may not be enough action to create significant energy reductions. If too much legislation is created to punish poor behavior (the sticks) then driving energy efficiency could be a high cost endeavor for all of us.

The Carrots

The benefits of energy efficiency are many and well documented: lower energy bills, increased property values, improved operations efficiency. So why have less that 50 percent of building owners implemented energy conservation programs and projects into their facilities?

In many cases, investing in energy efficiency and conservation in a building makes good financial sense and creates a return that is better than the market (20 to 30 percent ROI). In these hard times, it is understandable that capital expenditure may be difficult to justify, but there are low interest loans for efficiency improvements. These loans vary by state. You can Google "low interest loan energy efficiency" along with your state name to learn more about programs for residential and commercial buildings.

Additionally, business owners should consider associated tax benefits of energy efficiency projects. The federal government and many state governments offer tax credits or rebates for implementing energy efficiency programs. These incentives reduce the payback time of energy projects and can add cash immediately to the bottom line.

Besides the simple financial benefits of an energy project, there are many more complex programs that can make these projects even more feasible.

Utilities, aggregators and demand response providers are the guardians of our electricity supply. Each day, these players delicately balance the supply and demand of energy to our homes and businesses. Miscalculations in demand can be catastrophic but the mismanagement of supply can be disastrously expensive for utilities and end users.

In many markets in the US, programs are available to financially incentivize end users to reduce their energy use in times of peak demand. Not only will an end user receive a lower utility bill, but they can receive thousands or hundreds of thousands of dollars a year for acting as a virtual power plant. Businesses need experts to guide them through this process, but can learn more at http://www.oe.energy.gov/demand.htm. 

The Sticks

The sticks that will enforce energy efficiency range from twigs to baseball bats.

As of May 2008, green building initiatives legislation, executive orders, resolutions, ordinances and policies were found in 28 states, 12 federal agencies, 78 cities, 24 counties, 19 towns and 49 educational institutions. These building codes will bring up the minimum level of energy efficiency that can be implemented in these areas.

The more painful deterrent will come in the form of legislation in the future.