Selected tags: Energy Efficiency

California’s Secret to Green Jobs and a Thriving Clean Economy? It’s Policy.

California has a thriving clean economy. In fact, the Golden State boasted more green jobs in clean energy and transportation last year than the other top 4 states combined, according to a new report by Environmental Entrepreneurs.

Here are some more highlights:

Innovation – The state is a hub for clean energy innovation. Clean technology patents grew by 26 percent in the past 2 years, outpacing the country and the rest of the world.   It is the “undisputed leader in solar technology patents” according to Next10.org, with totals greater than the cumulative solar patents of the next eight highest states. 

Energy Generation – Total renewable energy generation has grown 28 percent between 2007 and 2011 and wind energy has doubled during this same period.  Earlier this month, the state broke its own record for solar power – over 15,394 megawatt-hours of power to the grid, enough for every Californian to keep a 100-watt bulb lit for four hours.  Not to be outdone, the state also surpassed 4-gigawatts of wind power – similar to what California's two nuclear plants can churn out at full power, or enough to momentarily supply over 2.5 million homes.

Jobs – Green jobs are growing four times faster than the rate of all other jobs nationwide, with the majority happening in California according to the Bureau of Labor Statistics.  EDF’s analysis of California’s clean economy finds that jobs in core sectors like energy efficiency, renewable energy, clean transportation, and advanced storage and materials have not only remained resilient during the worst of the Great Recession (2008-2010), they outpaced all other job growth and grew 109 percent from 1995 to 2010.

Green jobs are also good jobs in California.  They are diverse, across a wide range of education-level and skills, and almost half of all jobs in the clean economy don’t require a college degree according to the Brookings Institution.  On average, green jobs offer a higher median wage and career advancement opportunities. An analysis by Philip Romero, the former Dean of CSU Los Angeles College of Business and Economics finds that “workers command wages with a 50-to-100 percent premium over the average job,” and estimates that the overall clean economy will grow “by at least 60-to-100 percent” by the late 2030’s.

Something exciting is happening in California, and at this point you may be wondering what our secret is? 

It’s policy.   California boasts a legacy of innovation stemming from the state’s leadership in environmental policy – it happens here first and it transforms markets.  It is evidenced in everything from improved tailpipe emission standards and higher performing gas mileage in cars, greater efficiency in household appliances, and greener building practices that has transformed the sector and created hundreds of billions of dollars in economic value.  All these innovations started with policy

I believe good stuff can happen when you set clear policies that signal markets and influence behaviors.  There is a reason why 24 percent of hybrid and 32 percent of electric vehicles in the US are registered in California:  good policy that led to better cars and consumers who could see the improvement to their bottom line at the gas pump.  California leads in renewable energy, efficiency, and clean transportation in strong part because of strong policies like AB 32 which puts a price on carbon and sets a statewide Renewable Portfolio Standard, providing a clear market signal for greater investment in clean technology.

And by the way, someone local has to install all those solar panels and wind turbines, weatherize all those homes, as well as maintain and operate all those buses and rail cars – good jobs in the clean economy follow smart policy.

It turns out that California’s “secret” to growing green jobs and a thriving clean economy is not so secret at all…it’s good policy.

Posted in Clean Energy, Global Warming Solutions Act: AB 32, Jobs| Also tagged , , | 8 Responses, comments now closed

On-Bill Repayment Approved by California Public Utilities Commission

Last week the California Public Utilities Commission (CPUC) approved energy efficiency programs and budgets that include an innovative On-Bill Repayment (OBR) program.  The OBR program will allow commercial property owners to finance energy efficiency or renewable generation upgrades for their buildings and repay the obligation through the utility bill.  The program is ‘open-source’ and is designed to allow a wide variety of contractors, solar installers, and energy efficiency project developers to work with a range of financial institutions to design offerings that best meet the needs of their customers.

The CPUC approval was highlighted today in the New York Times.

In the decision, the CPUC reiterated their intention to have the OBR program operational by March 2013.  We understand that some of the utilities have expressed concern that this timeline is aggressive, but were pleased that the CPUC decision noted that the utilities have been aware of this timeline since the original CPUC decision last May. 

A predictable timeline for OBR implementation is critical as EDF is working closely with multiple market participants to create a pipeline of projects that can be executed as soon as the program is operational.  A successful launch will allow us to demonstrate to other states that OBR can create private investment and new jobs at no cost to ratepayers or taxpayers.  We believe that this is a message that will resonate across the political spectrum.

Posted in Clean Energy, On-Bill Repayment| Also tagged , | Comments closed

California Utilities Announce Innovative Financing For Energy Efficiency Retrofits

On-Bill Repayment

Yesterday, the California investor-owned utilities (Sempra, SoCalEd and PG&E) announced several financing programs including the first On-Bill Repayment (OBR) program using third-party capital to finance energy efficiency retrofits in commercial properties. Property owners would be able to access low-cost capital to finance upgrades and repay the investment through their utility bill.  The OBR program will contain three design elements that EDF believes are critical to success: 

  1.  The obligation will ‘run with the meter’ upon change in ownership or occupancy including via foreclosure.  This both improves the credit quality of the obligation and allows investment in longer-payback retrofits.
  2. Partial payments will be allocated pro rata between energy and financing obligations.  The utilities will also use all standard collection procedures for unpaid obligations.  These features insure that the obligation will be treated similarly to existing utility bills.
  3. The program will provide flexibility for vendors, contractors, project developers, lenders and other investors to design retrofit solutions, go-to-market strategies and financing products that meet the needs of their customers.

Over the next 10 years, EDF estimates that OBR could generate $6 billion of private sector investment in commercial energy efficiency investment.  During the next few years, EDF hopes to expand this initial program to additional states, and to cover residential properties.

EDF has been assuming that the California OBR program would only cover energy efficiency retrofits.  In a sidebar conversation with a senior California Public Utilities Commission (CPUC) staff member, yesterday, I learned that it may be possible to extend OBR to renewable and demand response projects.  We expect to be working closely with relevant stakeholders and the CPUC to make this a reality.

OBR is expected to be operational in California by the end of March 2013.  EDF will be working closely with energy efficiency project developers, energy services companies, lenders and other investors to develop a robust pipeline of OBR projects that can be executed soon after program initiation.

Posted in Clean Energy, On-Bill Repayment| Also tagged | Comments closed

Energy Efficiency: A Resource For The Masses

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

By: Jessica Feingold, EDF Financial Policy Fellow

EDF believes that On-Bill Repayment (OBR) can do for efficiency what the third-party finance model has done for solar.

A recent post on efficiency.org, entitled ‘Solar is for the wealthy? Not anymore!’ highlights the growth of residential solar projects in middle-income markets (areas with median incomes of $50k-$100k) at the same time that financing became widely available from the private sector. While wealthier people have always been more likely to be able to afford the upfront costs of a solar installation, the introduction of solar leases and Power Purchase Agreements (PPAs) has extended the opportunity to a much wider range of consumers. This increase was described in detail in the 2012 California Solar Initiative Assessment. The success of solar among middle income households – achieved by eliminating upfront costs and allowing for monthly repayment through a solar lease or PPA structure – lends support to the notion that low-cost financing will be critical to making similar advancements in energy efficiency.

EDF has been working to create an OBR program in California that would provide financing for energy efficiency and renewable energy upgrades. OBR uses private capital to finance these clean energy upgrades at no upfront cost to consumers. However, OBR differs from the existing clean energy financing models in that it allows for repayment of a clean energy investment on the customer’s monthly utility bill. This reduces the administrative burden of an additional bill, while at the same time strengthening the credit of the loan by leveraging historically strong utility payment history. Thus, OBR would provide low-cost capital to consumers for clean energy upgrades.

Middle-income earners, in particular, stand to benefit from OBR, since they otherwise do not have access to low-cost, unsecured financing. Middle-income households are highly price-sensitive and likely do not have sufficient savings or home equity available to make clean energy investments that would reduce their utility bills, resource use and reliance on grid power. That is precisely why private sector financing was critical to promoting solar among middle-income households. Energy efficiency projects, on the other hand, have not yet attracted the low-cost private capital needed to achieve such widespread success.

OBR is an innovative financing solution that would allow middle-income households to realize the long-term benefits of energy efficiency, and provide more affordable financing for renewable energy projects as well.

Posted in Clean Energy| Also tagged | Comments closed