Real Energy Writers

Texas Legislature Passes Commercial and Industrial PACE Bill

Mon, 20 May 2013 09:50:00 -0600

By Kat Friedrich, Clean Energy Finance Center

Guest Blogger, Energy Efficiency Markets

May 20, 2013

The Texas House and Senate passed Senate Bill 385 in May. If Governor Rick Perry approves the bill, the state will break new ground by developing plans for commercial and industrial property assessed clean energy (PACE) programs. This bill will redesign Texas’s approach to PACE, focusing on the commercial and industrial sectors rather than on residential programs. The legislation covers both energy efficiency and water efficiency.

To facilitate local decision making, cities and local areas will partner with businesses and nonprofits to set up their own PACE programs. These programs will allow businesses to borrow money from private lenders and repay it yearly via an assessment on their property taxes.

The bill has a solid foundation of support from a wide range of stakeholders including industry leaders and senior legislators. Charlene Heydinger, executive director of the nonprofit Keeping PACE in Texas, has built an effective coalition which includes large businesses and banks.

“PACE is the only solution out there that is totally market-driven, totally voluntary and local, and there are no mandates,” Heydinger said. “Our business community loves PACE because it is a real option for a solution without the drawbacks that have given people pause.”

Momentum of PACE Programs

PACE has been gaining traction nationwide since the first pilot PACE program in 2008, said David Gabrielson, executive director of PACENow. “It’s an idea that caught on very quickly and resonated all over the country.” However, some of the first generation of PACE bills were not designed for easy implementation. States are currently developing updated approaches to PACE.

In 2009, Texas passed a PACE bill which focused on residential energy-related programs. But because the bill was difficult to implement and the Federal Housing Finance Agency opposes residential PACE, PACE stalled in Texas. This year, Republican Senator John Carona introduced a new bill to improve Texas’s prospects for creating successful PACE programs. “I think Texas, in taking up this effort to get their legislation amended, is really on the cutting edge of states around the country,” Gabrielson said.

“We’ll put industrial PACE on the national map,” Heydinger said. Texas is a massive hub of industrial activity. Heydinger said Texas uses 19 percent of the energy used by industry in the United States. According to the United States Bureau of Economic Analysis, Texas was responsible for 8.73 percent of the national gross domestic product in 2011.

Collaboration with Banks

Heydinger collaborated with financial stakeholders to make sure banks’ concerns were addressed. Their collaboration led to a new version of the bill which focuses on commercial and industrial sectors rather than the residential sector.

“Two words, when spoken together, strike fear… and trepidation into the hearts of bankers, and that’s ‘priority lien,’” said Steve Scurlock, executive vice president of Independent Bankers Association of Texas (IBAT). “That is always a red flag. It was very important to us to make sure that the consent piece was very strong – that this would not happen without the consent and opportunity to do what the first lien holder would want to do.”

After the bill was revised, IBAT testified in favor of the House version of the bill. “We felt like it provided appropriate protections not just for our lenders, but for… consumers and building owners as well,” Scurlock said. “One of the things I like about the PACE bill this time is that there’s public/private cooperation. The primary funding for the projects is provided through the lending institutions and I think that’s a good thing.”

Control by Local Communities

“We have a very lean state government structure,” Heydinger said. Therefore, the legislation provides solutions which are inexpensive and simple for local and municipal governments to implement. The bill provides a flexible framework to allow local governments to partner with nonprofit organizations and businesses to set up PACE programs.

The bill does not specify extensive details as to how the individual programs will work, but it does outline guidelines for setting them up. The projects will be paid for through property assessments. They will be funded upfront by either governments or third parties. The financing may cover a variety of expenses including the cost of verifying savings. Project savings verification is required for every PACE activity in Texas.

Local governments will be able to designate regions for the purpose of creating PACE programs. Heydinger said that in agricultural areas, counties may combine their resources to create joint PACE programs.

There are powerful incentives for local districts and cities to set up PACE and water efficiency programs. In addition to being job creation engines, these programs can reduce water shortages and brownouts, both of which are of concern to industry. Texas is currently experiencing a multi-year drought. Brownouts can lead to increased costs for chemical production factories, Heydinger said.

Messaging for Business Leaders and Legislators

“I speak business when I talk about PACE,” Heydinger said. “Our effort now in the next month is about the jobs, the economic impact, the ability to upgrade our existing infrastructure. The benefits of our work that are environmental are wonderful, but they don’t get traction here. We have approached PACE as an economic development bill.”

Since the state legislature only meets for six months every other year, it was also crucial for Heydinger to use communication strategies that would appeal to legislators as persuasively as possible. When the Texas legislature puts a bill on the back burner, action can be postponed for years.

Heydinger said she has been impressed with the legislature’s commitment to addressing long-term infrastructure issues this year. “Good government invests in the future,” she said. This year, Texas’s legislature has focused on developing long-range plans for roads, construction, water conservation and energy efficiency. This bill is part of a larger emphasis on planning for Texas’s growth. Many people are moving to Texas from other states and nations.

“One of the things I… like about Texas is that they are very focused on results,” said Brad Copithorne, an energy and financial policy specialist at Environmental Defense Fund. “If something will create jobs and will stimulate the economy, that’s something they can agree on and make happen. We’re very pleased that this will lead to cleaner air and a healthier environment for everybody. If we can do this by allowing business to create jobs, that seems to me to be a win for everyone.”

To view the history of the bill, visit http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=SB385.

This story was originally published by theClean Energy Finance Center(CEFC). You can subscribe to future stories from the Clean Energy Finance Source by visitingthe CEFC's news page.

Electricity loss and theft: Who pays?

Tue, 14 May 2013 23:41:00 -0600

By Elisa Wood
May 13, 2013

We fret about turning off the lights to save pennies on energy. Meanwhile, electricity worth billions of dollars gets lost or stolen on the world’s power grids every year.

In industry jargon, the problem is known as ‘line loss.’ A certain amount of electricity generated by a power plant never makes it to the consumer – or at least the paying consumer. Instead it is lost or diverted somewhere over the wires. Some of it dissipates in transit for technical reasons. In other cases, it’s pilfered by marijuana growers, households, or in some countries even manufacturers.

Awesense, a Canadian company that has built its business model around solving this problem, pegs the cost of worldwide electricity loss at $202 billion annually.

Losses vary dramatically by country, with percentages running in the double digits in Brazil, China and India. In the US, about seven percent of the power generated goes missing. How much of that is theft? No hard figures exist, but a rule of thumb for sophisticated grids puts US power theft at two to three percent. That may not sound like a lot, but the US is one of the world’s biggest power producers. So even a small percentage of electricity lost means a large amount of fossil fuel wasted.

So, in a time when we strive for greater energy efficiency, why don’t we hear more about this problem?

It’s a matter of accountability and who pays, according to Mischa Steiner-Jovic, CEO of Awesense. Regulators typically do not require utilities to absorb the costs. Instead, electricity ratepayers subsidize the thievery.

“The utility commission has not sufficiently motivated the utility to reduce its losses. Because the utilities are able to pass their losses on to the rest of the customers, they are not financially motivated to solve power theft,” said Steiner-Jovic in a recent interview.

That’s not to say, nothing is being done. Some progressive utilities in North America are taking initiative, in part for safety reasons. Utility workers can inadvertently come in contact with wires exposed by setups jury-rigged to divert power.

But North America is still far behind Brazil, where the federal government has put in place a policy to reduce electricity losses. “Energy is such an important factor for the growth of their economy. They can’t afford to lose 20-30 percent of their energy,” said Steiner-Jovic. Brazil’selectricity theft problem has helped spur the installation of smart meters, which can go long way in helping utilities identify loss.

Not all utilities can afford smart meters. And anyway, thieves sometimes maneuver around them. Awesense has developed a system to identify electricity loss for utilities with or without smart meters. The company acts as a kind of energy auditor for the grid, using a combination of software and monitoring equipment to identify where loss is occurring and why – whether the problem is malfunctioning equipment or theft. It then helps the utility put in place a strategy to resolve the problem. Like many energy service companies, Awesense operates under a ‘no upfront cost’ model – it is paid out of the energy savings achieved by the utility.

So far, developing countries have shown the greatest concern about line loss. But Steiner-Jovic predicts that North America, too, will take more notice as the consumer becomes increasingly energy aware.

“It just can’t go on that we turn a blind eye to inefficiency on the grid,” he said. “Energy is too valuable a commodity.”

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. See her articles here: http://www.realenergywriters.com/elisa-wood/

New York: Getting the price right for energy efficiency

Wed, 24 Apr 2013 15:04:00 -0600

New York officials are scrutinizing the cost of energy efficiency – especially when it’s needed fast – as they prepare for the possible shutdown of a nuclear plant.

Energy efficiency insiders will want to keep an eye on this public service commissionproceeding for two reasons. First, it offers a potential 100 MW in business opportunity. Second, wide disagreement exists about what the resource will cost.

The 100 MW of energy efficiency would help make up for the potential loss of Indian Point. The nuclear plant’s federal licenses expire over the next couple of years, and it’s not clear whether or not it will win relicensing. State officials say they must prepare now. New York City relies on Indian Point’s power.

Consolidated Edison wants to provide 100 MW of permanent peak reduction as part of larger mix of generation and transmission to replace the plant.

At issue is the price tag.

Con Edison estimated it will cost as much as $300 million to achieve 100 MW of peak energy reduction. The New York State Energy & Research Development Authority pegs the cost at $155.5 million. And Consumer Power Advocates, an alliance of hospitals, colleges and other large non-profit energy users, estimates $200/kW, compared with Con Edison’s $3,000/kW.

In an April 19 order, the public service commission called the costs “sobering.” The commission wants to find ways to bring the price down. Competitive solicitations can do this, but they are time consuming, the commission said. And the schedule is tight – by energy planning standards. Licenses for Indian Point’s two units expire in September 2013 and December 2015.

The commission ordered Con Edison to file a plan within 45 days that provides more granular cost estimates and offers ways to lower the price tag.

Why were Con Edison’s initial costs so high? It has to do with the need for speed. The utility believes it must offer high incentives and rebates to get customers to sign on quickly enough to meet the 2016 reduction goal.

The strategy, which targets mostly large energy users, calls for several approaches to peak reduction, such as fuel switching, renewable distributed generation, lighting, and building management and control systems combined with efficient air conditioning.

The programs may go forward even if nuclear plant doesn’t close, according to Garry Brown, chairman of the public service commission.

“One of the things we will be looking at is the value of some of these upgrades —energy efficiency — even if Indian Point stays open. At least some of the projects would probably fall into the category of something that may be valuable under any circumstance,” Brown said at the commission’s April meeting.

Stay tuned. The commission wants to have the program goals and budgets in place before the end of the summer.

Elisa Wood is a long-time energy writer, whose blogs have been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. Her work can be found at http://www.realenergywriters.com/elisa-wood/

Energy efficiency finds its cell phone: Part III

Mon, 15 Apr 2013 14:37:00 -0600

By Elisa Wood

April 15, 2013

The cell phone is quickly becoming a handy tool for tracking home energy use and even switching appliances on and off from afar. It also turns out to be a good way for consumers to view the inner workings of the electric grid – as ISO New England is showing.

ISO-NE in September became the first grid operator to create a free app that gives anyone with a smart phone an easy-to-understand look inside a wholesale electric market.

Nerdy. Yes? But also practical for those truly interested in saving energy.

ISO to Goprovides a user friendly tutorial to the arcane world of whole electricity. Users get a quick, real-time glimpse into the frequently changing power conditions and prices in 150 towns and cities in the six-state New England region. A geo feature identifies the city closest to the cell phone user.

Timing is everything when it comes to energy efficiency. A kilowatt saved when the grid is under strain is more valuable than one saved when it is not. But the consumer has no way of knowing the state of the grid.

That’s where this app comes in. Using easy-to-comprehend visuals and text, the app shows the demand and wholesale prices of power in real time. Homeowners can use the information to see the best time to wash clothes or engage in other energy-intensive activity.

Why is timing so important? The New England grid includes about 350 power plants, some new, clean and inexpensive; others older, costly and polluting. If the grid is under strain, most of the plants – good and bad – must operate. When it’s not under strain, the ISO can avoid use of the less efficient resources.

These periods of peak demand are costly. If we avoid using electricity at this time, we reduce wholesale electricity prices. The overall cost of the system decreases, so everyone benefits.

“This mobile application makes it easy for anyone, wherever they are, to check on grid conditions, follow wholesale electricity prices, see what fuels are being used to generate electricity, and learn more about the region’s power system,” said Gordon van Welie, the ISO's president and CEO. “As smart phones and other smart devices increase in use, we’re very pleased to offer this new way for people to access information about the grid.”

Using the cell phone to track and control energy use is a relatively new idea, but it is catching on. So far, seven percent of U.S. adults use mobile devices to monitor their electricity usage, according to an April 2013 Internet surveyby Zpryme Research and Consulting. That equates to about 16.8 million Americans. It's more of a male than female phenomenon. And not surprisingly, the younger crowd (25-34) is most apt to use a mobile device to monitor energy use, Zpryme said.

ISO to Go is one of several ways the energy industry is attempting to cultivate a more savvy energy consumer. (See Parts Iand IIof this series.) It's slow going. Energy doesn't tend to capture consumer attention. But that may change as we increasingly pair energy efficiency with these devices that enchant us. Who knows? Maybe that person you see tapping on a cell phone is not on Facebook, but is busy saving us all a little money.

Elisa Wood is a long-time energy writer, whose blogs have been picked up by CNN, the New York Times, Reuters and the Wall Street Journal. Her work can be found at http://www.realenergywriters.com/elisa-wood/

Energy efficiency finds its cell phone

Thu, 28 Mar 2013 19:48:00 -0600

By Elisa Wood

March 27, 2013

Energy efficiency insiders have envied the telecommunications industry for years. After all, it produced the iPhone, Android and other products that American consumers can’t seem to live without.

The telecom industry achieved this level of innovation after it deregulated. The electricity industry deregulated too, but no killer product followed, no technology that rallies consumers and transforms markets.

“Where’s our version of the cell phone?” became a common lament among those in the energy efficiency business. After all, if they could come up with an equivalent gadget – one that charmed us to manage our household energy flow as raptly as we manage email, texts and cat photos on cell phones – imagine the energy savings we could achieve.

It turns out the energy industry may have found its cell phone, and it is…well, the cell phone.

Smart phone users can now manage their energy through a proliferation of apps that do everything from help us find energy rebates to reveal the workings of multi-state electricity grids. Many of the apps spring from the understanding that we are visual creatures: if we see our energy consumption rise and fall on a screen, as it happens, then we’re more apt to shut off the lights when we leave a room.

The planet now has about as many cell phones as it does people. That’s right, six billion. And a glance around any coffee shop, subway stop or park reveals that we like to stare at our cell phones. So it’s the logical gadget to use for engaging people in energy management.

Ashley Banks, a 26-year-old New Yorker, tried out one of these new apps last summer and liked it. Banks was able to control her window air conditioner remotely using her cell phone. She used the app and a special kind of portable outlet, called a modlet, while participating in the CoolNYC pilot program offered by Con Edison and ThinkEco.

If Banks forgot to turn off her AC before leaving for work, she could do so on route using her cell. She could also remotely set the AC unit to a certain temperature and monitor how much energy the unit used and what it cost her.

Banks, who works in cultural non-profit marketing, learned about the program through some friends. She says she’s not particularly tech inclined, but decided to give it a try. “The cell phone was definitely part of the attraction. I liked the idea of connecting remotely,” she said.

And she wasn’t alone in finding appeal in energy management via cell phone. The CoolNYC participants had the option to use their personal computers – and forego the cell phone app. But they clearly liked the idea of using their smart phones. Between 60 to 70 percent of the program participants downloaded the app, according to ThinkEco.

Window AC units can be big energy wasters. New York City has more than six million of them, and many run when no one is home. The app makes clear the consequence, showing the apartment dweller the amount of energy the unit is using at any moment and what it’s costing. Most of the CoolNYC participants had at least two AC units, so could even compare performance unit-to-unit.

“They realized that they had two air conditioners that looked the same, but one was a greater power hog than the other. People never realize that until they are shown,” said Mei Shibata, ThinkEco’s chief strategy officer.

It was the app’s whiz-bang and convenience that first attracted participants. Some used it to turn down their AC before arriving home for a blast of cool air upon entering from the sweltering sidewalk. Others monitored temperatures in their homes while they were at work to make sure the climate was right for their pets. Whatever they did, the point was that they started to pay attention to their energy use, something most of us tend to ignore.

But it turns out the cell phone is doing even more than helping consumers manage energy use for their appliances. It’s also helping them buy the right appliance in the first place, the most energy efficient one. More on that next week in part II of “Energy efficiency finds its cell phone.”

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com.

How Energy Efficiency?s story is changing

Thu, 21 Mar 2013 20:07:00 -0600

By Elisa Wood

March 20, 2013

Not so long ago, news about energy efficiency focused on what the US could or should do, but wasn’t to save energy. It was a tale of woe.

That’s no longer the case. Now, report after report tells the story of a burgeoning energy efficiency market that is achieving a level of surprising savings.

Consider a few news items over the last week.

The Energy Information Administration reported a 17 percent decline in energy use in manufacturing from 2002 to 2010. At first blush, it would be easy to conclude this is a consequence of the slow economy, post 2008. But the report also found that manufacturing declined only 3 percent. Therefore, the drop in energy use is too great to peg entirely to a drop in business.

“Taken together, these data indicate a significant decline in the amount of energy used per unit of gross manufacturing output,” said EIA. “The significant decline in energy intensity reflects both improvements in energy efficiency and changes in the manufacturing output mix. Consumption of every fuel used for manufacturing declined over this period.”

Meanwhile, the New York State Energy Research and Development Authority, a long-time and significant player in the energy efficiency arena, found that the number of Energy Star Certified Homes in New York increased by 10 percent from 2011 to 2012. This comes despite a beleaguered housing market.

By the numbers, New York saw 2,262 certified homes built last year, up from 2,049 the previous year. Meanwhile, construction starts in 2012 fell to historic lows nationally.

NYSERDA attributed the growth to market trends that favor multi-family housing and the increasing pursuit of energy efficiency in these buildings.

“As more baby boomers look to downsize, and cost-conscious young people look for ways to reduce living expenses, low-rise multifamily homes are meeting an important housing need,” said Francis Murray, NYSERDA president and CEO.

Only 27 percent of projects in the state Energy Star program were low-rise, multi-unit buildings in 2011. That rose to 52 percent in 2012, according to NYSERDA.

And the Association of Energy Services Professionals sees more job growth in 2013 in the energy efficiency sector, particularly for those who work in the commercial and industrial sphere. The association based its findings on results from its annual survey and interviews with industry leaders. Sixty-three percent of respondents cited job growth for businesses that offer efficiency and demand response services.

What kind of job are these? Analytical skills or big data; engineering, market research and management; project management, tracking, and reporting, says AESP.

Underscoring the optimistic outlook, AESP quoted one thought leader as saying that more states are going to increase energy efficiency, and no state has peaked in energy efficiency potential. So the number of workers needed will continue to rise, AESP said in a news release about the report.

The South is an area of the country that has yet to peak. And it’s seen by many as a tough place to sell energy efficiency, given its hot weather, heavy use of air conditioning and skepticism about most things green. But southerners are interested in becoming more energy efficient, according to an in-depth research project led by Susan Mazur-Stommen of the American Council for an Energy-Efficient Economy. The South just needs to be approached correctly. (I know, I live there.)

“We believe that the key to increasing energy efficiency in the South lies in taking cultural norms into consideration and working with local worldviews and institutions. We discuss how "Southern" identity is relevant to the ways in which people use energy,” said the ACEEE researchers in a prelude to the study, “Trusted Partners: Everyday Energy Efficiency Across the South.”

The study quotes economist Marilyn Brown, a Nobel Prize winner, as saying the Southeast is the Saudi Arabia of energy efficiency, and offers new insight into what can make the region realize this potential (The ACEEE report is an interesting read – and I won’t give away the ending here.)

The bottom line. Much has been done in recent years when it comes to energy efficiency. The numbers are impressive. But the story is far from over.

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com

Energy and Netflix?s ?House of Cards?

Thu, 07 Mar 2013 18:12:00 -0600

By Elisa Wood

March 7, 2013

Netflix’s ‘House of Cards’ is the latest ‘Downton Abbey.’ Or for us older folks, it is the latest who-shot-JR Ewing– a television series that lots of people are talking about.

A story of Congressional intrigue, the 13-part series has caught the attention of not only the viewing public, but also Washington insiders, who are having a good time debating what’s real and what’s downright silly in House of Cards. For those who haven’t seen it, the series is about a power grab by fictional House Majority Whip Frank Underwood (Kevin Spacey). He wants to be vice president, and he lies, maneuvers and kills his way to the position.

So what’s real? The show gets the little details right: the hand sanitizers in the Capitoland use of insider acronyms. On the other hand, Zoe Barnes, the jean-jacketed sleep-your-way to the top journalist, is a cartoonish figure.

The energy industry also plays a big part in the series. And again, the show gets the details right. For example, it acknowledges the rise of natural gas as an economic force, and the push for nuclear power as a low-carbon source of electricity.

But beyond that, well, poor Underwood doesn’t have a clue. In the season finale, he presses the natural gas company Sancorp to launch a hostile takeover of Tusk, a company that owns nuclear plants. And he wants this accomplished by Friday – a few days away – all to suit his political purposes. It’s a relief to hear the Sancorp lobbyist say, albeit without force, something like, “But there are shareholders to consider.”

The whole takeover scenario is hokey. Tusk instead takes over Sancorp to thumb its nose at Underwood. And if I remember correctly, it all does happen by Friday.

Still, everyone deserves a second chance. Even the bumbling and evil Congressman Underwood. That second chance comes with the yet-to-be-released next episode. So here I advise our fictional majority whip on how he should proceed in the next season.

Congressman Underwood, you say you want the nuclear and natural gas folks off your back and you need leverage over them. So next season push energy efficiency. Tell your staff that energy efficiency is the next big thing; in fact it has been for while(Zoe Barnes just failed to report it). Get Congress to pass, and the fictional President to sign, a major energy bill that focuses on appliance standards, labeling, cogeneration, Energy Star, and smart grid. By Friday.

Readers and ‘House of Card’ fans, please comment. What did you think of the portrayal of the energy industry in the series?

Elisa Wood is a long-time energy writer whose work can be found at RealEnergyWriters.com

The real power behind today?s energy efficiency industry?

Thu, 28 Feb 2013 11:57:00 -0600

By Elisa Wood

February 27, 2013

President Barack Obama recently pushed for increased energy efficiency in his State of the Union address. His endorsement is a plus, no argument. But it may not be the federal government that drives the industry’s next growth spurt.

Increasingly, the push for clean energy seems to be more grassroots, from the city and community.

Consider these significant green energy trends and events.

Cities increasingly require that building owners evaluate and report on how well their commercial properties use energy. Officials say the results will help government create better policy. The information also is valuable in real estate transactions. Buyers get a better sense of a building’s true value. And owners of green buildings may use the information as a marketing tool when renting or selling the property. Minneapolis is the latest city to enact a reporting and disclosure rule. Public buildings must comply this year and the largest private buildings in 2014. Other cities with similar requirements are Boulder, Seattle, New York City, San Francisco, Austin, Washington, D.C. and Philadelphia.

Massachusetts, the top US state for energy efficiency and a thriving market for solar, is building its reputation community by community through a law enacted in 2008 known as the Green Communities Act. While the law has many components, a key feature is its community grant program. Cities and towns become eligible for grants if they agree to lower energy use 20 percent within five years. Communities also must streamline permitting for green energy projects, and take other action meant to keep more of the state’s energy revenues within its borders. Massachusetts is trying to become greener and more efficient in part because it makes economic sense. About 80 percent of the state’s energy dollars are paid out to places like South America, Canada, and the Middle East, the sources of its fuel. State officials callthis an $18 billion “lost economic opportunity.” The state wants to recirculate more of the money within its own borders “through investments in home-grown renewable energy and energy efficiency projects.” Municipalities seem to like the program. So far, 110 have signed on, representing 45.2 percent of the state’s population.

Following Superstorm Sandy, New York City is looking to develop microgrids – smaller, more locally focused energy systems that operate closer to the user, more of a neighborhood operation. Utility officials can isolate a microgrid during a storm, walling it from cascading failures occurring on the larger electric grid. The NYS2100 Commission, set up by Governor Andrew Cuomo to find ways to ready the state for future storms, recommended the state develop incentives to encourage creation of microgrids. Connecticut is pushing microgrid development for similar reasons. The Department of Energy and Environmental Protection has been evaluating 36 projects and plans to award about $15 million to move the best of them forward. Governor Dannel Malloy wants to spend an additional $30 million over the next two years on microgrids.

More and more local communities are building solar gardens, offering the benefits of solar to renters, those with shaded roofs, or who face other obstructions to solar installation – an estimated 75 percent of the US population. (See this blog for more details.)

Why is the city, town and community increasingly the force behind clean and efficient energy?

I recently interviewed Rob Thornton, president at International District Energy Association, while preparing this year’s guidebook on combined heat and power, published by PennWell. He offered an interesting insight.

Much like banking, the power industry has been undergoing consolidation in recent years – mergers and acquisitions and takeovers by national and international energy companies. In many places the hometown utility is no more. As a result, city officials have little sway over the shape of their electricity system.

“Mayors used to have a direct relationship with the leadership of the investor-owned utility. That person is now three states away. Mayors are recognizing that they don’t have the same reach or leverage or engagement that they used to have,” Thornton said.

As a result, mayors and city leaders increasingly believe it is their responsibility to bring clean energy to their cities. They feel compelled to act, sometimes through organizations like C-40 Cities, a network of megacities worldwide working to reduce greenhouse gas emissions. “It is a trend that we really see emerging,” Thornton said.

This trend is good for clean energy in many ways. Decisions made close to home evoke less not-in-my-back-yard opposition to new infrastructure. Locals develop a sense of ownership in energy projects, and therefore are more likely to support than oppose them.

So while it is good news that clean energy and energy efficiency are getting attention from the highest office holder in the US, the industry also stands to gain from the home team. Enlightening the mayor and the city council about the benefits of efficiency may prove as important as winning support from the President and Congress.

Elisa Wood is a long-time energy writer whose blog originates weekly at RealEnergyWriters.com.

Commission Report Features Financing in Recommendations to Double U.S. Energy Efficiency

Wed, 20 Feb 2013 22:28:00 -0600

By Kat Friedrich, Clean Energy Finance Center
Guest Blogger, Energy Efficiency Markets
February 20, 2013

The Alliance to Save Energy’s Commission on National Energy Policy included financing as one of the central recommendations in its recent report, “Energy 2030: Doubling U.S. Energy Productivity by 2030.” The commission consists of some of the key leaders in energy policy and business in the United States.

The commission’s plan would use financing programs and policies to unleash hundreds of billions of dollars of capital to support trillions of dollars of potential energy savings.

According to the commission, energy savings performance contracts and utility energy service contracts, which focus on government-owned buildings, are the main energy efficiency financing methods which are active in the market. Although these models work well, their scope is not broad enough to have a broad nationwide impact on energy efficiency.

To open the door to new energy efficiency financing opportunities, the commission recommends:

creating a secondary market for efficiency loans
setting up state and local programs to resell loans to investors in secondary markets
initiating on-bill repayment and on-bill financing programs
improving federal regulations to support financing efficiency through property taxes and trusts
attaching energy efficiency incentives to mortgages
setting up tax policies that encourage industrial investment in efficiency
increasing real estate buyers’ awareness through ratings and information
providing customers with their energy use data

Creating a Secondary Market

There is no robust secondary market for energy efficiency loans because there is no uniform system for evaluating these loans. In secondary markets, investors buy loans which have already been issued. If institutional investors could buy large quantities of energy efficiency loans, that would create a market for energy efficiency lending.

To remove this barrier and allow investors access to the market, the commission recommends that consistent underwriting guidelines, contract language, and data requirements for energy efficiency investment be developed.

The report also recommends that state and local governments set up programs to resell groups of loans to investors in secondary markets. These programs would be similar to the new Warehouse for Energy Efficiency Loans (WHEEL) program.

Revising Policies and Initiating Programs

New state and local programs could use on-bill repayment or property taxes to fund energy efficiency. On-bill repayment programs provide customers with the opportunity to pay for energy efficiency improvements over time through their utility bills. Third-party lenders pay for the upfront costs. On-bill financing programs are similar to on-bill repayment programs, but are financed by utility or ratepayer capital.

Revising federal regulations could make it easier for energy efficiency financing to develop. For example, real estate investment trusts are one potential vehicle for efficiency.

Improving federal regulations related to residential property assessed clean energy (PACE) would remove the current roadblocks that obstruct these programs. Federal constraints do not exist for commercial PACE.

Federal regulations could also build energy efficiency incentives into mortgage programs. If mortgage programs included incentives for energy efficiency, that would steer the housing market toward more efficient choices. It would also encourage people to retrofit their homes before selling them.

Changing federal tax policies could encourage industries to engage in capital investments which might also support energy efficiency. These policies could also target specific energy efficiency measures.

Making Efficiency Information Visible

The commission recommends increasing awareness of energy efficiency on a national level. Making energy data transparent, available and easy to understand is one step toward improving public understanding of energy use. It is also important for financial markets, which need high-quality data on the actual energy savings associated with various types of energy efficiency projects.

Energy efficiency rating systems for buildings can give real estate buyers and sellers a visual incentive to pay attention to energy use. Manufacturers can also use ratings for appliances and other products.

Allowing utility customers and third parties access to standardized energy data can empower customers to track their energy savings. For this approach to succeed, state regulators would need to set up rules to ensure customer privacy.

This story was originally published by the Clean Energy Finance Center (CEFC). You can subscribe to future stories from the Clean Energy Finance Source by visiting the CEFC’s news page. Reposted by Energy Efficiency Markets.

Obama and the reinvention of energy efficiency

Thu, 14 Feb 2013 13:12:00 -0600

By Elisa Wood

February 13, 2012

The energy efficiency industry received a nice boost this week during President Barack Obama’s State of the Union address. Obama called for cutting energy use by half over the next 20 years.

Such attention comes at a significant point in the history of the energy efficiency movement, one when it appears to be re-inventing itself again, and in a way that is likely to have appeal beyond the green energy movement.

First, consider how far energy efficiency has come in terms of perception.

Until about a decade ago, we equated saving energy with austerity, turning down the thermostat in winter and up in summer. It was called ‘conservation’ or the more clunky term ‘demand-side management.’

With the dawn of smart grid, conservation was reinvented into ‘energy efficiency,’ a way to save energy through technology. No sacrifice required, energy efficiency might even bring more comfort – lighting that is easier on the eyes and devices that make sure your apartment is cool just when you arrive home.

Now we seem to be entering a third stage, the era of ‘energy productivity’, where we focus on the economic result of energy efficiency: more bang for the energy buck.

“By doubling productivity, we’ll wring more out of every dollar spent on energy, helping families improve the quality of their lives by freeing up money to either save or spend on other things,’ said Kateri Callahan, president of the Alliance to Save Energy.

Callahan made the statement as she introduced new goalsreleased last week by the Alliance Commission on National Energy Efficiency Policy. (The commission is led by Tom King, president of National Grid and US Sen. Mark Warner, a Democrat from Virginia.)

The commission wants to double energy productivity by 2030, or get twice as much economic output for each energy dollar spent. This sounds a lot like Obama’s call to cut energy waste by half in 20 years. Indeed, following Obama’s speech, Callahan noted: “Twenty national energy experts spent a year developing a plan to double U.S. energy productivity, and it took the White House just days to publicly embrace it.”

So what’s the end game here?

We’ve been improving our energy productivity for many years, albeit somewhat haphazardly. The advent of the computer has helped. (It takes less energy to move an electron than a car or person.) Had we not made these gains, we’d need about 50 percent more energy today to maintain our way of life, according to the report.

Still, we waste a lot of energy. So the commission proposed a series of steps toward a large energy productivity goal: $270 billion of GDP for each quadrillion (quad) Btu consumed in 2030. To put this in perspective, we’re at only about $135 billion per quad now, according to the report.

Energy productivity is integral to economic prosperity. The report found that doubling our energy productivity will add 1.3 million jobs in 2030 and lead to household savings of about $1,000 per year. Moreover, such productivity could increase national industrial output by $100 billion in 2030, the report said.

It will take some serious work to achieve the goal. We must upgrade energy infrastructure, adopt advanced technologies, educate and motivate consumers, and institute a favorable regulatory climate, the commission said. These steps will cost hundreds of billions of dollars, but the potential exists to capture a trillion dollars in energy savings.

It’s a big undertaking, one that could dramatically boost the energy efficiency industry. And it’s not a bad start getting a plug from the leader of the free world on national TV.

Elisa Wood is a long-time energy writer whose blog originates weekly at RealEnergyWriters.com

Energy Efficiency prospects: What to watch

Wed, 06 Feb 2013 22:16:00 -0600

By Elisa Wood

February 6, 2012

Events unfolding in two US Northeast states – New York and Massachusetts – signal increased business opportunity for energy efficiency companies, green architects, lighting contractors, smart grid innovators and others in the business of saving energy.

First, the energy efficiency world should keep an eye on debate over the possible shutdown of the Indian Point nuclear power plant in New York.

New York regulators recently tasked Consolidated Edison, New York City’s utility, with figuring out how to make up for the loss of the 2,040 MW Indian Point. Federal licenses for the plant expire by the end of 2015. And while the plant seeks relicensing, it faces some potent opposition. So the state wants to be prepared.

The back-up plan, drafted by Con Edison with the New York Power Authority, focuses largely on power plants and other energy infrastructure. But it also calls for 100 MW of energy efficiency that the utility would seek in addition to programs it already has underway.

The utility envisions much of the 100 MW of peak demand reduction coming from large buildings through LED lighting, advanced energy control systems, steam air conditioning, advanced heating, ventilation and cooling, and energy storage systems.

Time is short – if Indian Point does close in 2015 New York needs to start ramping up its energy efficiency backup now, says Con Edison. To that end, the utility has asked the New York Public Service Commission to approve $300 million for the efficiency program in April.

Given the time constraint, it’s also important to create an incentive package “that rapidly encourages interest and participation by customers,” Con Edison said. Specifically, Con Ed wats to see customers receive payback in 12 months or less for the energy efficiency investments.

Meanwhile, smaller cities in New York also are broadening their pursuit of energy efficiency – for other reasons. NYPA, the nation’s largest state electric utility, recently issued a solicitation seeking consultants to develop and manage energy master plans for five cities: Albany, Buffalo, Rochester, Syracuse and Yonkers.

The authority says that it plans to significantly expand “the nature and scope of its traditional energy efficiency programs approach,” which tend to focus on lighting, motors, boilers, and HVAC systems in public and government buildings. While the new plans will consider these things, they also will enlist the private sector and focus on:

• Energy planning and coordination

• Energy delivery infrastructure

• Transportation energy efficiency

• Energy efficiency in buildings

The plans will focus on not only reducing energy demand but also creating jobs, reducing dependence on imported oil, and cleaning up the environment. NYPA envisions the plans encompassing a range of resources and considerations -- electricity, natural gas, steam infrastructure, renewable energy, clean vehicles, zoning and traffic patterns, energy use in city buildings, etc.

In nearby Massachusetts, a major efficiency undertaking also is in the works. State regulators approved the final details of the 2013-2015 utility planslast week that call for $2.01 billion in energy efficiency programs. This keeps Massachusetts in the top spot nationally for energy efficiency investment per capita. The utilities expect the plans to save 3.7 million MWh of electricity, enough to power more than 500,000 households for one year, and deliver $8.9 billion in economic benefits.

"With this decision, Massachusetts has renewed its commitment to investing in energy efficiency, the cleanest, lowest cost energy resource available. Efficiency will deliver important economic and environmental dividends," said Jeremy McDiarmid, Massachusetts director for Environment Northeast, a key efficiency advocate in the region.

In approving the plans, the Massachusetts Department of Public Utilities (DPU) says that for every dollar utilities will invest in energy efficiency, ratepayers will receive over three dollars in return in energy savings. More specifically, homeowners who install energy efficient lighting, insulation, and take advantage of other programs offered will save as much as $24/month on electricity and $39/month on natural gas.

The DPU order goes into far greater detail – 180 pages worth – which you can find here.

If you want to track other opportunities for energy efficiency businesses, see the ‘RFP’ section of Energy Efficiency Markets Newsletter at RealEnergyWriters.com. (It’s free.)

Elisa Wood is a long-time energy writer whose blog originates weekly at RealEnergyWriters.com

Energy efficiency: Who gets it? Anybody?

Wed, 30 Jan 2013 20:59:00 -0600

By Elisa Wood

January 30, 2013

It’s easy for those of us who ‘talk’ energy every day to forget that we operate in a bubble. Outside the bubble the average household is at best vaguely aware of the enormous technology revolution about to change the way each of us uses electricity.

Two recent studies provide some insight into how little of our bubble talk the consumer deciphers.

More than half of the consumers surveyed (54%) by Smart Grid Consumer Collaborative (SGCC) have never heard the term ‘smart grid.’ (And to be fair, the precise meaning sometimes eludes energy insiders too, although they use the catch phrase widely. For households, smart grid generally refers to digital gadgets and technologies that give the consumer increased ability to manage energy more efficiently, such as energy displays and programmable thermostats.)

Women and African Americans are among those who show little awareness of the term, along with those who are not college-educated or earn under $50,000 annually, according to SGCC’s 2013 “State of the Consumer Report.”

“Billions of dollars are being invested in new technologies that are little understood by the people who are supposed to benefit and who are paying the bills,” said the SGCC report.

The good news is that people like the concept once they learn about it. Among those familiar with the term, only 13 percent perceive it in negative way, according to the SGCC survey.

This lends credence to the notion that education will boost energy efficiency efforts.

Meanwhile,Comverge found that two-thirds (62 percent) of those it surveyed spend less than 10 minutes per month reviewing their energy usage or bill. To put this in perspective, the average American spends 100 times longer each day on Facebook, said the Georgia-based demand-side management company.

Both SGCC and Comverge offer some specific advice on how the industry can make efficiency as alluring as Facebook – or at least more alluring than it is now.

SGCC has been at work for some time defining who we are as energy consumers. The organization has segmented the American consumer based on our attitudes, values, behaviors, motivations, lifestyles, technology know-how and other characteristics. SGCC then helps utilities tailor their marketing to each segment. Some groups respond to messages about saving money and energy, others environmental concern and global warming.

“The key to engaging consumers in smart grid is understanding how to appeal to them in terms that will resonate – how to answer their objections and make it easy for them to interact with new technology,” said Patty Durand, SGCC executive director.

For example, those who SGCC calls “Do-it-yourself and save” types are likely to show interest in programmable thermostats that require some planning on their part. And “Easy Streets,” wealthy individuals reluctant to change their behavior, might respond to marketing materials pitching automated thermostats of the “set and forget” variety.

In its research, Comverge found that Americans increasingly want a single location to manage their energy, especially those who are under 40 years old.

"As a society, we are very digitally savvy and much more conscious of how energy use impacts the environment. Couple these changes with an overall desire for simplification, and it should be no surprise that people want all of their energy information in one place, available on any device and easy to understand," said Blake Young, Comverge president and CEO.

To that end, Comverge recently introduced a new one-stop ‘residential customer engagement solution’, which it describes as a software and services product that helps utilities reduce energy use by making householders more energy aware.

Others, too, are pushing the idea of centralizing home energy management. Virginia-based Opower and technology giant Honeywell rolled out an energy management platform this week that combines Wi-Fi thermostats and Akuacom utility management software with Opower’s interactive, cloud-based application. Homeowners are able to view and adjust energy use from anywhere using a smartphone or computer.

It’s crucial that the energy industry find the friendly talk and technology that captures consumer attention – because the innovators, investors and policymakers are creating an ever-expanding universe of energy management products, a sizable portion for the household. Utility spending on energy efficiency will double by 2025 to about $9.5 billion per year, according to a recent study by the Lawrence Berkeley National Laboratory. That means substantial energy savings – and a lot of new ideas and technology for the consumer to master.

Elisa Wood is a long-time energy writer whose free newsletter, Energy Efficiency Markets, is available at www.RealEnergyWriters.com

Saving energy and eating better

Wed, 16 Jan 2013 16:37:00 -0600

By Elisa Wood

January 16, 2013

The US consumer wants food to be fresh, local and organic. But that means larger grocery bills in an economy where most people need them to be smaller.

As the New York Times tells it, 20-somethings, just out of college, feel the squeeze the most. They are more intent on Whole Foods-style eating than their predecessors, but less able to afford it. (See “The Unaffordable Luxury of Food” by Ginia Bellafante.)

Consumers, young and old, also increasingly want products made with green energy. Together, these trends – energy awareness, buyer discrimination, and squeezed budgets – make the case for seeking greater energy efficiency in the food industry.

Modern food production requires a lot of energy. Food-related energy use jumped significantly—80 percent —from 1997 to 2002 as new technologies came into play. Now the food industry uses a whopping 16 percent of the US energy budget to grow, transport, store and otherwise prepare what we find on our table, according to a US Department of Agriculture report.

Linking energy & organic

In a recent report of its own, Principal Solar illustrates ways the food industry is trying to save energy.

“Examining the food industry, one of the biggest questions presented to suppliers is how to balance the quality that consumers ask for and the affordability that they need,” said Principal Solar’s white paper, Energy Efficiency & Sustainability in Organic Food Supply. “While the solution to these issues is multi-faceted, a focus on sustainable farming and energy efficiency presents itself as a primary step.”

Restaurant chains, such as Arby’s, Chipotle, McDonalds, Subway, and Starbucks are paving the way by designing buildings to meet standards of the U.S. Green Building Council for Leadership in Energy and Environmental Design (LEED), the white paper said.

And Michigan State University now has the first LEED certified agricultural facility, its W.K. Kellogg Biological Station, according to the white paper. The MSU dairy farm links two compatible environmental efforts: organic farming and energy efficiency. At the same time, the facility offers a way to reduce food growing costs. Upfront LEED costs are offset by long-term reductions in energy bills – a 38 percent cut for the MSU project through better temperature control, lighting and other improvements.

Elsewhere, various companies report other ways they are reducing energy in the food industry.

Ecova has carved out a niche in the food industry with its program that tracks energy use and identifies and puts in place efficiency measures.

Third largest cost

“Identifying and reducing utility costs is an important part of the process when looking to decrease operational expenses, as utility bills are the third largest budget item for many companies,” said Seth Nesbitt, Ecova’s senior vice president and general manager for marketing & technology.

The energy company numbers among its clients Pacific Northwest chain Shari’s, which saved more than $700,000 in utility costs after Ecova audited the energy use at 100 Shari’s locations. Ecova saved CKE Restaurants $358,000 between January 2010 and June 2012 through energy efficiency efforts, and achieved 4.3 percent cut in energy use over one year for chain California Pizza.

Meanwhile, an increasing number of grocery stores are using combined heat and power, a highly efficient technology because it uses one fuel to produce two forms of energy, heat and power. UTC Power has installed CHP fuel cells in Whole Foods stores in California, Connecticut and Massachusetts.

Stonyfield Farm has undertaken a number of efficiency and green building initiatives at its facilities and associated farms. The New Hampshire yogurt maker has achieved a 40 percent reduction in its energy use at its office and manufacturing building.

F. X. Matt Brewing, maker of Saranac Beers expects to save $350,000 annually through a new system that uses brewing wastewater to generate electricity through anaerobic digestion. The company received $1.75 million from National Grid and the New York State Energy Research and Development Authority to help fund the $5 million project.

Consumer demand drives trends in the food industry. More stores offer organic produce because more people seek it out. The same could become true for energy efficiency. If consumers begin asking about energy saving efforts behind a product, food producers are more likely to undertake them. In doing so, they’ll gain green bragging rights and consumers might see some price relief as well. Maybe you can have your organic cake and eat it too?

Elisa Wood is a long-time energy writer. Subscribe to her free Energy EfficiencyMarkets Newsletter at RealEnergyWriters.com

Energy efficiency: Big deals and new ideas

Thu, 10 Jan 2013 11:08:00 -0600

By Elisa Wood

January 10, 2013

The economic premise behind energy efficiency – that it’s cheaper to save a unit of energy than to make one – has caught on in the US. Energy efficiency spending is up, and our energy use is declining, measured both per capita and per dollar of gross domestic product, according to government figures.

So it is not surprising to see the year begin with several energy efficiency deals in traditionally responsive markets, as well as some good proposals on how to reach more elusive customers.

Big deals (or small but interesting)

Here are some of the recent deals that came across my desk.

Ameresco, one of the big players in energy services contracting, was out of the gate in early January with two contracts.

First, the Massachusetts-based company signed a $6.8 million energy performance contract with a housing authority in Fall River, Massachusetts for more than 1,500 housing units. The work includes cogeneration, control and monitoring systems, and upgrades to water, lighting, temperature controls, and mechanical space heat and domestic hot water systems. The housing authority expects to save $13 million over 20 years.

Second, the company struck a $5.2 million deal with Austin Energy, the nation’s eighth largest community-owned electric utility. Under an energy performance contract, Ameresco will install a new 24,000-ton-hour chilled water storage system at the utility’s district cooling plant that will shift electricity use to hours when energy is less costly.

EnerNOC , which according to a live ticker on its site has saved customers more than $545 million (and counting), is providing demand response and energy efficiency for the Denver Public Schools. The project includes 24 school buildings that total 4.5 million square feet. The deal comes after Denver Mayor Michael Hancock challenged private building owners, nonprofit organizations, and public schools try to meet President Barack Obama’s push for 20 percent energy savings by 2020 across 1.6 billion square feet of office, industrial, municipal, hospital, university, and school buildings.
World Energy Solutions, a Massachusetts-based energy management services firm with $30 billion in energy, demand response and environmental commodities transactions, installed Telkonet’s EcoInsight thermostats in 187 assisted-living apartments in the state. The thermostats are the first step toward introducing a more sophisticated energy management system.
American DG Energy began operating two 75-kW combined heat and power (CHP) plants at the Cumberland County Jail in Portland, Maine, under a $2.4 million deal over 15 years. The company uses a business model that it calls On-site Utility, in which American DG Energy owns and operates CHP units, and the jail pays only for the energy it uses. American DG Energy guarantees that the jail will pay less than what its local utilities would charge.

New ideas

Meanwhile, some interesting reports came out around the first of the year that offer ways for energy efficiency companies to reach new or sometimes indifferent customers.

For example, the Washington, D.C.-based Institute for Market Transformation Institute has advice on bringing efficiency to multi-family housing. The institute released a report in early January that promotes benchmarking of multi-family housing. Benchmarking provides data on a building’s energy use, the equivalent of a nutritional label for food. MTI points out various benefits to the approach: It leads to better crafted programs and incentives that encourage owners to make upgrades. The upgrades lead to lower tenant energy bills, create a more comfortable indoor environment, and can give owners better cash flow. In addition, during real estate transactions buyers better understand the building’s energy profile and can value the property accordingly. MTI sees $9 billion in potential energy savings from America’s multifamily buildings.

“As a general rule, greater transparency is a positive development, helping markets work better all around,” said Julia Stasch, vice president of U.S. programs at the John D. and Catherine T. MacArthur Foundation.

Meanwhile, the Connecticut Fund for the Environment (CFE) and Environment Northeast released a report, found here, on creating successful energy efficiency financing programs for residential customers.

“A well-designed residential energy efficiency financing program can help expand access to capital and smooth the way for increased program participation," said Roger Reynolds, senior attorney for CFE. "This report indicates that there are a whole host of program design elements that are essential for the success of energy efficiency financing products and, consequently, the programs as a whole."

And last, the Clean Energy and Bond Finance Initiative (CE+BFI) issued a financing model that leverages bond financing to secure low cost capital for energy efficiency and renewable energy projects.

"As the clean energy industry matures and grows, it needs to become less reliant on federal tax credits as the key source of financing," said Lew Milford, President of Clean Energy Group.

Called Industrial Development Bonds, or IDBs, they provide tax-exempt interest rates to private borrowers who meet certain public benefit requirements. Borrowers must be small- or mid-sized American manufacturers.

The paper on the IDB model is one of a series published on financing by CE+BFI and intended for give state and local governments. See www.cebfi.org.

Elisa Wood is a long-time energy writer. Subscribe to her free Energy EfficiencyMarkets Newsletter at RealEnergyWriters.com

Markets for energy efficiency in 2013: Part I

Wed, 12 Dec 2012 23:39:00 -0600

By Elisa Wood

December 12, 2012

A look across the US landscape reveals several rich markets for energy efficiency over the next year. Some emerge out of unfortunate natural disasters; others arise from the growing realization by state governments that it is typically cheaper to save energy than produce it.

Superstorm Sandy leveled neighborhoods in New York, cracked coastal mansions in half, and left tens of thousands still without power weeks after its devastating late October strike. Some buildings were so damaged, utilities simply could not re-connect them to the grid.

With $32 billion in rubble left behind, the rehabilitation effort in the New York is huge. It requires new walls, roofs, wires, lights, heating systems and appliances, offering a tremendous opportunity to introduce more efficient replacements.

To that end, environmental groups are pushing New York regulators to redirect some of the state’s energy efficiency money into a disaster relief fund. The money could go toward incentives that would encourage New Yorkers to choose efficient building materials and appliances as they rebuild.

Not doing so would constitute a missed opportunity, one that the state is likely to regret as it struggles to meet a goal to cut energy use 15 percent by 2015, according to a letter signed by Pace Energy & Climate Center, Sierra Club, Alliance for Clean Energy New York, Natural Resources Defense Council, Citizens Campaign for the Environment, and Environmental Advocates of New York.

After all, the time to encourage an efficient purchase is when an appliance breaks. That’s when consumers buy new models; they rarely replace working appliances just to upgrade to a more efficient model.

“New York must emerge from the post-Sandy recovery with a more efficient and resilient electric landscape, but that requires an all hands on deck approach,” the groups said in the letter to the New York Public Service Commission.

Even if state regulators do not allot the funds, opportunity still exists now in New York for energy efficiency companies and contractors, especially those who can offer financing that avoids any upfront costs to homeowners and businesses. Such financing is not only spurring energy efficiency nationally, but also solar panel installations.

In addition to bread and butter energy efficiency – insulation, windows, appliances – the superstorm reconstruction gives New York a chance to innovate. It opens the door for companies that install smart grid devices and onsite power. Governor Andrew Cuomo, New York City Mayor Michael Bloomberg and other leaders have emphasized that as utilities rebuild New York’s grid, they must consider new technologies to fortify the city against future storms. Consolidated Edison, which serves New York City, has already stepped up to the plate, committing $250 million to strengthen and modernize its energy delivery system as a result of Sandy.

Meanwhile, as is often the case during power outages, the storm offered a chance for combined heat and power (CHP) to strut its stuff. CHP is highly efficient because from one fuel it produces two forms of energy. The technology also serves as back-up generation. CHP units operate onsite, so do not rely on utility wires that are often the primary victims of wind and falling trees in severe storms. When the grid is down, CHP systems can continue to heat, cool and provide lights for a building.

New York City has encouraged installation of CHP in its commercial buildings for some time. So it is not surprising that stories are now floating around the Internet about buildings with CHP that never lost power. Among them are buildings owned by New York University and a 14,000-unit Bronx apartment complex called Co-op City. In nearby Connecticut, Fairfield University retained electricity during Sandy because of its CHP system, as did Princeton University in New Jersey, according to the Houston Advanced Research Center.

Opportunity for CHP is growing not just in the Northeast, but nationwide because of a goal set by President Barack Obama for the US to add 40 GW of CHP by 2020, a 50 percent increase in today’s CHP capacity. The goal is ambitious, but government and industry players have set to work to make it happen.

Reconstruction from Hurricane Sandy opens new doors for CHP and other forms of energy efficiency. But New York is certainly not the only place business is likely to boom next year. Next week’s blog looks at California, Massachusetts, Connecticut and other markets poised to thrive – as long as the federal ‘fiscal cliff’ does not undermine the energy efficiency industry’s prosperity.

To get part II of “Markets for energy efficiency in 2013” delivered free to your mailbox, sign up for Elisa Wood’s free energy efficiency newsletter at RealEnergyWriters.com.