Author Archives: EDF Blogs

LA Better Building Challenge Partners with EDF’s Investor Confidence Project to Accelerate Citywide Energy Efficiency Goals

By Matt Golden, Senior Energy Finance Consultant

Source: LA Better Buildings Challenge

Environmental Defense Fund’s Investor Confidence ProjectSM (ICP) is pleased to announce a partnership with the Los Angeles Better Buildings Challenge to help develop a more robust marketplace for energy efficiency retrofits in the city. Los Angeles has set a goal of achieving 20% energy savings across 30 million square feet of existing buildings by 2020 as part of the Better Buildings Challenge, a national leadership initiative sponsored by the U.S. Department of Energy. If achieved, it is estimated that this 20% reduction in energy costs will create over 7,000 high-quality local jobs, and avert annual carbon emissions equivalent to taking more than 18,000 cars off the road.

The LA Better Buildings Challenge will be promoting the ICP Protocols through its network of building owners and industry stakeholders to help bring even greater transparency and accountability to the energy efficiency market by introducing a system of standardization in the way commercial building retrofits are developed, funded, and managed. The ICP framework assembles best practices and existing technical standards into a set of protocols that define a clear roadmap for developing projects, determining savings estimates, and documenting and verifying results.

David Hodgins, Executive Director of the LA Better Buildings Challenge, describes how the partnership with ICP will help the project meet its goal. The mission of the LA Better Buildings Challenge is to support our partners in achieving a minimum of 20% savings by 2020, and to get there we need to have a clear path. We are excited to partner with ICP, which offers our partners a best-practice approach to developing, underwriting, and measuring the impact of their resource efficiency projects,” he said. Read More »

Posted in Clean Energy, Energy, Jobs, Smart Grid| Comments closed

Message from Moms to Governor Perry: “Mess with Texas, not California”

josesBy Jose Sigala, Field Manager for Moms Clean Air Force in Los Angeles and California's Central Valley 

This week, Texas Governor Rick Perry made another visit to California in his continued crusade to entice businesses to relocate to the Lone Star State. Once again, Perry is making his stump-like pitch, highlighting his state’s low taxes and regulations and business-friendly climate, while touting the fact that no other state has created more jobs than Texas.

While that distinction is often disputed, Perry’s lack of effort to address climate change and poor air quality in his home state is not.

In fact, his neglect of major environmental concerns has helped Texas become one of the country’s worst polluters. The state ranks first in the nation for greenhouse gas emissions and worse yet- poor air quality is having a negative impact on children’s health. Kids age 0-4 with asthma are being admitted to the hospital up to eight times more than asthmatic adults in the state.

Moms across Texas and California urge Governor Perry to get his priorities straight and stop providing a pollution haven to corporations and prioritizing healthy profit margins over healthy communities. Read More »

Posted in General| 1 Response, comments now closed

Cut Water Use for Today’s Drought—And Tomorrow’s

(This post originally appeared on EDF + Business)  

By Brendan Fitzsimons, Project Manager, Corporate Partnerships Program

 

CAReservoirLevels


California reservoir levels;
red lines indicate historical average levels.
(Source: California Data Exchange Center)

California is experiencing its driest year on record, facing a drought that impacts industries across the state: electricity, farming, fishing, even tourism. Governor Jerry Brown declared the drought a statewide emergency last January, and President Obama visited the state on Friday to speak firsthand with farmers and other stakeholders about how the drought is impacting them.

While the state and the federal government rally resources to try and help those affected in this crisis, businesses also have a role to play by reducing how much their operations impact the state’s precious water supplies.

AT&T stepped out in front of the issue on Friday, with AT&T California President Ken McNeely announcing that he was directing the company’s 34,000 California employees to reduce their company water usage by 30 percent until the drought condition passes. Among the measures McNeely announced, employees will reduce water use by cutting landscape irrigation and halting the washing of AT&T’s fleet of more than 15,000 vehicles. Kudos to AT&T for acting quickly in a time of crisis to implement these and other measures at their California facilities.

AT&T is also working with Environmental Defense Fund (EDF) to help others in California and beyond cut their water use. In 2012, AT&T and EDF teamed up to identify ways that AT&T could reduce the water and energy used to cool their buildings. We focused on cooling towers — a key component of building air conditioning systems — which can consume from 25 percent in large office buildings to 75 percent or more in data centers and other buildings with a lot of technical equipment.

We found that many buildings have the opportunity to reduce water use in their cooling towers in ways that can also save money. Companies can realize even more water and energy savings by taking full advantage of air-side economizers, which cool buildings with lower temperature air from the outside. Water savings mean less energy is used for supplying, treating and distributing water; and energy savings mean less water is used for producing, moving and managing energy — the “energy-water nexus.”

AT&T and EDF are sharing a free Water Efficiency Toolkit that we developed. By using the toolkit to identify similar water-saving measures, companies and institutions across California have the potential to help the communities in which they operate, actions that reduce their costs and water use. Our estimates show that, by improving cooling tower efficiency in commercial, institutional and industrial buildings, cities across the state could reduce water use significantly:

  • San Francisco could see reductions of 89 million gallons a year, saving area businesses over $645,000 in water delivery charges;
  • San Diego County could see reductions of over 500 million gallons a year, resulting in $3 million in reduced water costs; and
  • Los Angeles County could see reductions of over 1.5 billion gallons a year, saving companies $9.5 million in water costs.

To learn more about the Water Efficiency Toolkit, visit edf.org/attwater and watch the webinar on using the toolkit.

Posted in Energy| Comments closed

California’s Capital Leads the Nation in Energy Efficiency Financing

By Kate Daniel, EDF Climate Corps Fellow

Kate Daniel, Climate Corps Fellow

Great news for California and the future of energy efficiency in Sacramento.

Today I took part in an announcement by Sacramento Mayor Kevin Johnson unveiling the nation’s largest Property Assessed Clean Energy (PACE) project in the country — and potentially a huge boost for businesses in the state’s capital.

Launched by Clean Energy Sacramento, the property owners of Metro Center, Metzler Real Estate, will now be able to take advantage of PACE financing to fund $3.1 million in energy efficient upgrades, including high efficiency rooftop units for heating and cooling and a state-of-the-art building management system. Ultimately, these upgrades will save $140,000 in annual utility costs for the property.

This project is not just good news for Metro and Metzler, but for the entire Sacramento region. Here’s how it works: Under the PACE program Metzler will receive private funding from Ygrene Energy Fund, who covers the upfront costs of the project Metzler pays the costs back on their property tax bill while Johnson Controls will design and implement the upgrades.

Why PACE?

For starters, PACE – and other innovative financing mechanisms like on-bill repayment (OBR) – offers several key advantages over traditional energy financing. First, the financing is tied to the property itself, rather than to the owner. This means that if the owner wanted to sell the building, it would not have to pay off the balance of the financing, but rather transfer to the next owner’s property tax bill. By doing this, PACE addresses a key obstacle in commercial real estate markets: frequent ownership turnover where owners are hesitant to make long-term investments.

Kate Daniel and Mayor Kevin Johnson at the announcement

It also means qualification for the financing is based on the value of the Metro Center property, not Metzler’s credit. Many properties can qualify for PACE financing that would not otherwise be able to obtain the capital necessary for a retrofit. PACE also addresses the biggest barriers to energy efficiency retrofits in commercial buildings. An annual survey by the Institute for Building Efficiency shows that available capital is the most common obstacle to making energy improvements. With PACE financing, the upfront costs of the project are financed externally, and don’t draw from funds that could be used for other projects or investments.

The next most frequently cited barrier to taking on energy efficiency is making a sufficient return on investment. This is where Clean Energy Sacramento’s low-interest rates come into play. Property owners also have the ability to extend the financing as long as 20 years, far longer than most real estate or construction loans. These features of the financing make individual payments lower, so the company can realize the benefits of energy savings immediately.

Lastly, PACE financing can address the split incentive problem, when property owners aren’t motivated to pay the costs of upgrades that save money for their tenants, who pay the utility bills. Under most commercial leases, property owners are able to pass on property taxes to tenants, so the current tenants would make the PACE payments, while still realizing savings on their utility bills.

Clearly, the Metro Center upgrade is a good deal for Metzler and the Center’s tenants, who realize the direct benefits of energy savings and increased property value and comfort.

Fortunately, the City of Sacramento gets why this is important to the rest of us. Energy retrofits keep contractors busy and working. The Metro Center project itself will create 50 jobs in the Sacramento region and upgrades to Metro Center will make the space more appealing for tenants, attracting and retaining businesses in the area – all without spending public dollars.

The Metro Center project is a telling example of just how much a well-executed PACE program can provide for a community. Through my EDF Climate Corps fellowship, I’ll be working to help make these types of projects a reality across the region.

 

Posted in Clean Energy, Climate, Jobs, On-Bill Repayment| 2 Responses, comments now closed

In Antarctica, an Up-Close Look at Climate Change

By Eric Pooley, EDF Senior Vice President for Strategy and Communications

(This post first appeared on Stanford Business, the Stamford Graduate School of Business' magazine)

Source: Eric Pooley

Astonishing images still crowd my mind: an endless field of jagged, broken sea ice glowing red at twilight; an aquamarine vista of iceberg, water, snow, and mountain, sparkling in the brightest sunshine I’ve ever seen. Penguins that morph as they move from sea to land — swimming like porpoises, paddling like ducks, wobbling upright onto the beach like drunken wedding guests. And a humpback whale, surrounded by a halo of seabirds, diving deep and then bumping gently against the underside of our vessel, as if to scratch an itchy back.

The otherness of this place, Antarctica, struck me from the moment I arrived, as it had so many before me. “Antarctica is monumental, an astonishment,” the great naturalist Peter Matthiessen wrote a decade ago. “Its excruciating purity and vast healing silence ring with creation, ancient and yet new and fresh beyond imagining.” Yet rising atmospheric concentrations of greenhouse gases are seeing to it that this ice fortress of a continent, which Matthiessen called “inviolable,” was being violated before my eyes. Indeed, Northwestern Antarctica, which I visited last December with a group of Stanford Graduate School of Business students, business leaders, and faculty, is one of the fastest-warming places on earth.

Each year, Stanford MBA students organize overseas study trips — opportunities to meet the tech leaders of Bangalore, say, or explore the supply chains of Shenzhen. Students who are building clean-energy careers had organized ours because they wanted to come face to face with global warming — an encouraging sign, since their generation will need to find the solutions that have so far eluded ours. As a journalist and environmental advocate who focuses on the politics of climate action, I’d been invited along to talk about some of those emerging solutions, as well as the policy tools that are beginning to accelerate them.

Our cruise departed from King George Island, a reassuringly frigid chunk of rock just north of the tip of the Antarctic Peninsula, which is like a crooked finger poking up from the northwestern corner of the continent. The Antarctic landmass — twice the size of Australia — remains impenetrable to tourists like us. So we cruised along the continent’s edge in a 240-foot, ice-strengthened vessel called Ocean Nova, and explored the peninsula by climbing into rubber Zodiacs twice a day for expeditions ashore.

Guidebooks had warned us to wear multiple layers of down and fleece. But soon we found ourselves sweating and peeling away those layers as we hiked, because on most afternoons during our journey, the frigid south wasn’t all that frigid. Average midwinter temperatures on the peninsula have increased by an astounding 11 degrees Fahrenheit over the past 60 years. In late December, which is in the austral summer, average highs can exceed 40 degrees Fahrenheit. On the day we headed home, a study in the journal Nature Geoscience reported that the Western Antarctic mainland has seen an average temperature increase of 4.3 degrees Fahrenheit since 1958 — not the extreme warming seen on the peninsula, but still three times the average global rise for that period. And in another Nature Geoscience paper, in April, researchers from the British Antarctic Survey analyzed a 1,194-foot-long ice core sample taken from James Ross Island, near the tip of the peninsula. They found that the amount of snow and ice melting in the summer and then refreezing is now almost 10 times greater than it was 550 years ago, with the most rapid melt occurring in the last 60 years. Rapid melting can lead to dramatic collapses of glacial ice, as when the vast Larsen B Ice Shelf — roughly the size of Rhode Island — disintegrated early in 2002.

March of the Penguins

Unlike most of Antarctica, the peninsula has long been known to have a summer melting season. This produces a mix of snow-free land areas, open sea, and residual ice that makes the peninsula a fecund breeding ground for marine birds and mammals. Rapid melting in summer, however, is upsetting this delicate balance. As the extent of sea ice around the peninsula diminished over the past quarter century, it helped drive a decline in the populations of Adélie penguins, Weddell seals, and crabeater seals — species that hunt from sea ice. On Torgersen Island, the number of Adélie breeding pairs has declined by more than 85% in the past 38 years, from 15,000 to just 2,000. As these species retreat south, away from man-made warming, they are being replaced in these waters by sub-Antarctic species from farther north — elephant seals, fur seals, and chinstrap and gentoo penguins, all of which prefer to hunt in open water.

The Adélie rookeries we visited certainly seemed full of life, as the obstreperous birds guarded nests built of small stones, stole each other’s pebbles, and raised their cacophonous mating calls, but the science tells a sadder story: The colonies here are dwindling as the number of breeding pairs drops and the average weight of the fledglings falls. Many underweight fledglings go off to sea and never return. The Adélies of the Antarctic Peninsula, according to seabird ecologist Bill Fraser, who has spent his long career studying the birds, are “on a decline that has no recovery.” In interviews with journalist Fen Montaigne, author of Fraser’s Penguins, a heartbreaking book about the man and his birds, the scientist shared his frustration that “this unbelievably tough little animal, able to deal with anything, [is] succumbing to the large-scale effects of our activities. That’s the one thing they can’t deal with, and they’re dying because of it.”

The Adélie is not in danger of extinction, at least not yet. Several million of the birds are scattered about Antarctica, which is warming at different rates in different places and even has areas that have cooled as stratospheric ozone depletion has changed wind patterns. (The damaged ozone layer is slowly being repaired, thanks to a global ban on chlorofluorocarbons, so this local cooling likely won’t last.) Adélie populations are shifting south, to bays that used to be too icy in summer but now have the right mix of ice, open water, and snow-free beach. But there is a limit to how far south the Adélie can move: They need winter light to hunt, and below the Antarctic Circle, it is just too dark for that. Sooner or later, unless humankind stops pumping carbon pollution into the air, climate change will chase the bird down.

All Climate is Local

As the students discussed these issues during and after the cruise, they recognized that observable impacts, which are primarily local, can have an enormous influence on public attitudes toward climate change, perhaps as much as or more than technological and financial factors. Antarctica is local if you’re a penguin. But for Americans, other impacts hit closer to home. “It’s hard to talk about climate change because you can’t see it. If I’m going to talk about climate to people on the Eastern Seaboard, I’m not going to talk about penguins,” says Jake Saper, who is studying toward a joint MS Environment & Resources/MBA and is spending the summer as a clean-tech intern at venture capital firm Kleiner Perkins Caufield & Byers. “Penguins are cute, but people don’t really care about penguins. I’m going to talk about how cataclysmic events like Hurricane Sandy happen more frequently and are more extreme as a result of climate change.”

Indeed, as historic droughts, floods, wildfires, and ferocious storms, all made worse by warming, are felt around the world, they are helping people connect the dots to climate change. As a result, national polls show an increase in the percentage of Americans in favor of action.

For Mike Volpe, who received his Stanford MBA this year, communicating about climate change is difficult because burning fossil fuels creates costs for people and other living things that are not billed in the transaction. Known to business students as an example of “market failure,” this problem requires cross-disciplinary solutions. The good news, Volpe says, is that “there are thousands of young minds on this campus eager to solve big problems like climate change. The right policies can help unleash these young minds.”

I left Antarctica convinced that the students on our trip will help drive the innovations we need. Many will find work in California, since the state’s clean-energy economy is already flourishing thanks to smart policy. California added more clean energy jobs last year than the next three states combined because it has developed a remarkable tool kit for the task at hand: helping to restore the climate system by decarbonizing its energy system without destabilizing the economy.

California’s Plan

Fossil fuels have reigned supreme for the last 200 years, providing the vast majority of the energy we need to make our homes, businesses, and vehicles work, and even powering the ship that took us to the Antarctic to observe the effects of combusting these fuels. These fuels are ubiquitous, so getting rid of them overnight isn’t an option. As we limit their role in the near term, however, we accelerate the transformation of our energy system and create tremendous investment opportunities.

In 2006, California enacted the Global Warming Solutions Act, or AB 32, landmark legislation upheld by voters in a 2010 statewide referendum despite an attack by out-of-state oil companies. Under AB 32, California has implemented energy-efficiency regulations and expanded renewable-energy targets, and this year launched the United States’ first nearly economy-wide cap on carbon. The state places an absolute limit on the amount of pollution that can be released, then establishes a price for emissions through the trading of pollution allowances, which gives the regulated entities flexibility in meeting their reduction goals. Since 2006, in anticipation of the cap, clean-tech investors have poured more than $9 billion into the state. In April, Gov. Jerry Brown approved the trading of carbon allowances from California’s program with Quebec’s — a first step toward connecting the state with a broader carbon market that could grow to include other U.S. states and Canadian provinces, as well as existing and emerging programs around the world.

As part of AB 32, California has also developed a low-carbon-fuel standard, the subject of intense opposition from the oil industry. Currently, between 92% and 96% of the energy used for transportation in California is derived from crude oil. The standard places a cap on the carbon content of fuels used in the state, creating a market incentive to increase the production and use of cleaner fuel sources, such as ethanol, low-carbon gasoline, biodiesel, electricity, and hydrogen.

This also creates both opportunities and challenges for old-line energy companies learning to adapt. But the fossil fuel companies have a better shot at it than, say, the Adélie penguins. Both of their worlds are changing fast.

Eric Pooley visited Antarctica with 35 Stanford GSB students, faculty, and business leaders in 2012.

Posted in Clean Energy, Climate, Global Warming Solutions Act: AB 32| 1 Response, comments now closed

Future (Climate) Change Agents– What Inspired Me Most at EDF Climate Corps Training

(Cross posted from EDF Climate Corps)

By: Svetlana Zenkin, EDF Climate Corps fellow

A few weeks ago, I joined more than a hundred other students in San Francisco for the sixth annual EDF Climate Corps Training event. I had no idea what to expect over the five days of intensive energy efficiency training.

What I found were hours of fascinating conversations with people who are just as passionate about energy efficiency and sustainability as I am — not to mention a group of dynamic alumni speakers and energetic networking sessions.

At the end of the training, two things were clear: I was proud to be a part of EDF Climate Corps and eager to start working for my host organization, Williams-Sonoma, Inc.

Now, just a few weeks into my fellowship at Williams-Sonoma, I have been able to speak with confidence about energy benchmarking and tout the positive aspects of energy efficiency investments in executive meetings. The ultimate goal is to improve the company’s bottom line by reducing energy use and lowering greenhouse gas emissions – a win-win for business and the environment. EDF Climate Corps staff and ECOVA trainers really hammered this home at the Training.

However, I left EDF Climate Corps training with more than just the technical tools for this summer. I felt inspired and motivated by EDF’s energy and climate policy work in California, and how my work as an EDF Climate Corps fellow has an impact on EDF’s regional goals.

For example, I particularly enjoyed learning about EDF’s continued role in the implementation of AB-32, California’s landmark law that set an absolute statewide limit on greenhouse gas emissions. Thanks in part to EDF, the law has strengthened California's commitment to transition to a sustainable, clean energy economy, helped put climate change front and center on the national agenda and spurred similar action by states and regions across the US.

Addressing climate change calls for coordinated action from a variety of stakeholders: individuals, nonprofits, government, private sector and academia. As an EDF Climate Corps fellow, I know I’m helping EDF strengthen its partnerships with all of its stakeholders. I’m a part of the force helping to show these partners that energy efficiency projects designed to reduce greenhouse gas emissions can also bolster financial success.

I feel grateful to be a part of the EDF Climate Corps Network, which comprises so many accomplished, dynamic and fun individuals who are following their passion and pursuing careers in energy and sustainability.

At the training, I met fellows who had served in the Peace Corps, taught English in Japan and founded composting start-ups. There were others who have already earned doctorate degrees, and worked at prestigious think tanks and Fortune 500 companies. Climate change is a challenging and urgent problem, but it’s hard not to feel hopeful upon meeting so many talented individuals dedicating their careers to making climate change a priority. No matter our backgrounds, we all recognize that it must be resolved, one EDF Climate Corps fellow at a time.

Posted in Clean Energy, Climate| Comments closed

Engaging Latino parents in California in the fight for clean air

(Cross posted from EDF Voices

This post was written by Jose Sigala, a field manager for Moms Clean Air Force. He also leads EDF's Climate Initiative in Los Angeles and the Central Valley in California. 

Source: Moms Clean Air Force

 

 

 

 

 

 

 

 

 

 

 

When I heard the Moms Clean Air Force was launching a new initiative to engage Latino moms and dads in the greater Los Angeles and the Central Valley regions (in both English and Spanish) I was thrilled. Having grown up in Los Angeles, I always knew I wanted to help spark a greater conversation about what climate change means to the Latino community and their families – and the long-term problems they would face if we didn’t address it.

We know that climate change is already causing an increase in extreme weather that will only get worse in the coming decades, leading to more intense heat waves and drought conditions – which exacerbate already poor air quality and vulnerability to air pollution.

So why focus on Latino parents in LA and the Central Valley? These two regions have the dirtiest air in the nation, according to the American Lung Association, and combined they account for 7 of the 10 most polluted cities in the country. These regions are also home to an overwhelmingly large Latino population, in some cities reaching as high as 75 percent of all residents. In many cases, these predominantly Latino communities are also well below the poverty line and suffer from high unemployment and a host of other challenges like a lack of basic infrastructure and green space, poor public health outcomes, and little or no access to healthcare.  All of these challenges, combined with the onslaught of extreme weather and air pollution, spell disaster for many families.

But despite these challenges, there is a strong fabric of community resiliency and a history of Latino moms and dads fighting for the health of their families and our future generations. Groups like the Mothers of East LA, Mujeres de La Tierra, Central California Environmental Justice Network and Latinos Unidos for Clean Air (LUCA), and similar community groups have long been fighting for social and environmental justice.

With MCAF, I’ll be building upon this already rich network of moms and dads who are taking action against pollution, recruiting Latino parents to educate and discuss strategies on how to best combat the threats of climate change to public health and safety, as well as identify opportunities to increase community involvement and resiliency.

MCAF will also seek to uplift and direct this chorus of voices –bilingual and both online and in more traditional venues– to state, local, and federal lawmakers who are making decisions that affect all of our children and communities. As someone who has deep roots in both Los Angeles and the Central Valley, I’m proud to be leading this initiative. For years, I’ve made it my life’s work to be a community leader and organizer, from serving as the president of my neighborhood council to directing legislative district offices and activities of elected officials.

But as a father of two beautiful daughters, the opportunity I’ve been given with MCAF is really a personal one. I want to know I’ve done everything I can to leave them and their children a better planet and provided Latino parents with the foundation to build healthier communities for generations to come.

Posted in Climate, Engaging Latinos| Comments closed

EDF Releases New Blog For All Our Expert Voices

Environmental Defense Fund’s new flagship blog collects stories, ideas and arguments from all of our EDF expert voices in one place.

 

The California Dream 2.0 blog focuses on Climate and Clean energy in the state of California. We hone in on what makes California unique in the clean energy economy and how California can leverage market-based environmental policies to retain a leading edge in global innovation. However, we know you may have a broad interest in environmental issues.

That’s why we wanted to share with you Environmental Defense Fund’s new flagship blog, EDF Voices. EDF Voices collects stories, ideas and arguments from all of our EDF expert voices in one place. Our thought leaders use this space to weigh in on all sorts of environmental issues, from the latest trends in climate politics to reflections on initiatives to decrease waste from disposable plastic bag use.

We hope you like what you read on our new EDF Voices blog and become a subscriber.

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The Housing Market And Green Labels: Location! Location! Efficiency!

This commentary was originally posted on the EDF Energy Exchange Blog.

By: Jessica Feingold, EDF Financial Policy Fellow

From produce to t-shirts, we know certain people are willing to pay more for organic, and that these people often seek out restaurants, vendors and brands that have earned certifications for their commitments to sustainable practices. Labels help consumers, who increasingly face a multitude of product and service offerings, make informed decisions. But what about a sustainably-labeled house? Will people pay more for a certifiably more efficient, or “green,” home?

A recent study, “The Value of Green Labels in the California Housing Market,” suggests that the market places significant value on certified green homes in California. Such green-labeled homes fetched a 9% premium versus non-labeled homes, based on statewide sales data for 1.6 million homes from 2007 to 2012. This translates to a $34,800 price premium for a home labeled by at least one of three standards: ENERGY STAR, LEED for Homes or California’s own GreenPoint label, on the $400,000 sales price of a non-labeled home. The research was conducted by Matthew E. Kahn, an economics professor at UCLA, and Nils Kok of Maastricht University in the Netherlands, a visiting scholar at the University of California at Berkeley. Their analysis controls for variables known to affect real estate prices including location, size, vintage and the presence of amenities.

The study estimates that the typical single-family California household spends $200/month on utilities, and thus stands to benefit from $720 in annual savings from energy efficiency measures that would reduce energy use by 30%. The authors point out that the $34,800 price premium of a green-labeled home is 48x the annual estimated utility bill savings of $720, suggesting that consumers value efficient homes for more than the direct financial benefits they produce.

All else equal, it is well understood that a resource efficient home uses less energy than an inefficient one, and will therefore have lower operating costs. But Kahn and Kok point out that ‘the added value of a green-labeled home far exceeds both the estimated cost of adding energy efficiency features to a home and the utility-bill savings generated by those improvements.’

Since the non-financial benefits of a green-labeled home are a seemingly large part of their perceived value, effectively promoting energy efficiency requires a targeted marketing approach that taps into the consumer’s values – perhaps some combination of increased comfort, improved indoor air quality and the signal of ‘conspicuous conservation’ that lets your neighbors know your own particular “shade of green.” In fact, the study found that the value of a green-labeled home was positively correlated with the level of environmental ideology of a neighborhood, as measured by the percent of hybrid vehicle registrations.

We tend to focus on cash-flows when doing a cost-benefit analysis of energy efficiency financing programs, weighing the upfront installation costs versus the resulting monthly utility bill savings. This makes sense given that non-financial benefits, to date, have been hard to value. However, this study is an indication that these benefits are indeed monetized at sale – and a 9% price premium sends a strong message that it pays to invest in energy efficiency!

Posted in Clean Energy, Climate, General| Comments closed