Savvy builders, Congress seeing payback from energy-efficiency

Making buildings, air conditioners and refrigerators run better and use less energy does not attract the kind of attention that comes with seismic shifts in the natural gas market or fights over OPEC oil-production ceilings. But according to a high-thinking panel of experts that advise the US energy secretary, serious money is making the conversation around efficiency more interesting.

Ever since coming to DOE in 2009, Energy Secretary Steven Chu has been singing the praises of energy efficiency, entertaining audiences with PowerPoint presentations on how refrigerator standards have reduced energy use while at the same time bringing down costs.

But even after raft of new appliance standards over the past four years, and a push to tighten enforcement, energy efficiency still has a way to go, according to Chu.

There is a greater opportunity to save money that we should be capturing, and it hasn’t really landed everywhere,” he said during a meeting with his Secretary of Energy Advisory Board in November.

But times are changing, other SEAB members said, with money playing a leading role in changing behavior.

Indeed, just replacing air conditioners with more efficient models could save $2.5 billion annually, and preclude the need to build seven new mid-size power plants, according to Arthur Rosenfeld, a former commissioner for the California Energy Commission, a pioneering energy-efficiency advocate and a member of the board.

“I have been talking to a number of some of the larger real estate property owners in the country. They know they can now get higher rents if it is a gold or a silver LEED standard building,” said Steven Westly, a clean tech venture capitalist and the head of a SEAB subcommittee looking at building energy efficiency.

The US Green Building Council provides so-called LEED certification, short for Leadership in Energy and Environmental Design. The Council rates buildings on how energy and water efficient they are, giving them a rating of certified, silver, gold or platinum.

It costs more money to build more efficient buildings and to earn the gold or platinum rating. But according to Michael McQuade, the senior vice president for science and technology at United Technologies Corporation, it pays for itself, and people are beginning to realize that.

“The fact is that people are willing to pay higher acquisition costs because their energy costs are low. That is the reality at the end of the day, it is no longer a negative return investment,” McQuade said.

While some customers are embracing energy efficiency because they feel social pressure to do so, or because they feel a responsibility to use less energy, it is money driving investment in energy efficient technologies, he said.

“There is a social component, there is a moral responsibility component, but I think we have really stacked the deck now so that it is a financial return,” he said “People are buying LEED buildings or renting LEED buildings because there is a financial return on them.”

Congress seems to recognize the economic benefits from efficiency too, although that has not always been the case.

Last week the Republican-controlled US House of Representatives passed a bill (H.R. 6582) that would implement a number of energy-efficiency provisions, including expanding standards to some water heaters, commercial refrigerators and air conditioners. The bill was sponsored by two Republicans, and supported by industry.

“In a year that has been frustrating, to say the least when it comes to energy policy, we’ll take any kind of bipartisan agreement we can get,” said Ross Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers. “We’re pleased to see the House considering legislation that helps manufacturers innovate in the area of energy efficiency.”

Chu also has said energy efficiency is a political win-win.

“Both sides of the aisle would be in favor of saving energy because you want to save money,” Chu said. “I can’t even imagine, although I’ve been surprised before, that that would be a political issue.”

Indeed Chu has been surprised. DOE’s efforts to implement a 2007 law that set more stringent light bulb efficiency standards — which would in effect have eliminated traditional incandescent bulbs, requiring more expensive compact fluorescent or LED bulbs — was attacked by some Republicans on Capitol Hill.

Led by Representative Joe Barton, a Texas Republican, they charged the standards would burden consumers and take away their ability to choose an inexpensive light bulb. Their bid to overturn the standards, however, failed in 2011.

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  1. wd at December 20, 2012 1:15 am

    There are two comments so far regarding Derek’s article. Both comments lobby for a particular energy saving technology. I think it would be helpful for DOE to rank available energy saving projects. This could be done by ROI or by the best buy per kwh saved or perhaps best available technology in each area of known opportunity. Naturally, the ranking would be dynamic in nature. I think this would help guide the dialogue more to PROJECTS and less to POLITICS. If you just glance at Derek’s article it gives the impression there won’t be much progress in energy efficiency or conservation or ‘green renewables’ without government subsidy. That may be true of some projects but it is not true of all projects. There are market justifiable projects ready today. Surely it makes sense to pursue those than to try to force through projects of dubious benefit. More efficient light bulbs provide an acceptable payout. So do window attachments mounted externally and DOE is getting ready to quantify the options and the payouts in their technical evaluation. There’s a big role for the DOE in making actionable information available and those efforts don’t depend on a big legislative agenda. If we individually or collectively can’t find market justifiable projects for funding, then all the pleas for subsidies are simply evidence that we are pursuing some projects for reasons beyond the apparent bad economics. It’s no wonder there’s such a political morass.

  2. Sid Abma at December 7, 2012 2:29 pm

    America is so focused on increasing electrical energy efficiency, as just stated above, energy efficient refrigerators and air conditioners. Renewable energy, solar, wind and the others to produce electricity.
    How many chimneys are poking out of the roofs of buildings blowing Trillions of cu.ft of HOT exhaust into the atmosphere. The residential market knows of condensing boilers and water heaters, but what about the large consumers of natural gas, commercial buildings, industry and the power plants.
    Secretary Chu needs to educate these consumers about the technology of Condensing Flue Gas Heat Recovery.
    Natural gas can be consumed to well over 90% energy efficiency, with COOL exhaust instead being vented into the atmosphere.
    Increased natural gas energy efficiency = Reduced utility bills = Profit
    Increased natural gas energy efficiency = Reduced CO2 emissions
    Increased natural gas energy efficiency = Water conservation

    What natural gas is not wasted today, will be there to be used another day.

  3. Ron Wagner at December 6, 2012 3:28 pm

    Trigeneration is the way to go. Check out these links:


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