A rough rule of thumb is that energy efficiency requires investment upfront (investment isn’t only cash, but also thinking) for lower costs into the future. Thus, energy efficiency is a central arena where thinking “cost to buy” often conflicts with more sensible thinking about “cost to own” (CtB v CtO). And, when it comes to energy efficiency, there is a basic truism.
- Those who can afford the upfront costs, can afford to be energy inefficient.
- Those who can’t afford the costs of energy inefficiency, can’t afford the upfront costs.
Following up on an announcement made months ago, Senator Jeff Merkley (D-OR) and Senator Richard Lugar (R-IN) introduced legislation that will help address both the CtB v CtO and the affordability issues.
The Clean Energy for Homes and Buildings Act, modeled on Oregon’s bi-partisan State House Bill 2626, would offer low-interest loans to both homeowners and businesses for energy-efficiency building upgrades. .
“We know that energy-efficient retrofits dramatically cut energy bills over the long term, but the initial installation costs are often too high for families or business owners to deal with,” Merkley said. “This bill bolsters creative programs that offer low-cost loans for these retrofits, allowing people to start saving money as soon as the upgrades are completed.”
Legislation / programs like this don’t only ‘make it possible’ to overcome the investment challenge, but make it more likely as people see (sort of like Cash for Clunkers) ‘free money’ providing incentives for them to do the right them by themselves and for the broader community. (Thus, helps people move past Cost to Buy to thinking about Cost to Own.)
Writ large, with the exception of conservation (changed demand patterns), energy efficiency is our most cost-effective and fastest approach to tackling our intertwined economic, energy, and environmental challenges.
- Investments in energy efficiency can boost the economy (especially in building trades) through upgrading buildings.
- Energy efficient systems place less demands on the energy system, thereby (by definition) strengthening it.
- And, reduced energy demand translate, quite directly, into reduced pollution loads (not just related to climate change and acidification of the oceans.
“We have very serious energy security challenges in the world. Investing in energy efficiency saves money and reduces greenhouse gas emissions. This program would help federal, state and local governments take a leadership role. It has maximum flexibility to also assist residential, commercial and industrial property owners to make energy efficiency upgrades,” Lugar said.
Now, as to the program, the legislation structures it so that the payback on the loans should be lower than the savings. In other words, the combined energy and financing repayment bill will be lower than the energy cost without the efficiency investments. Perhaps this is the moment to note that the greater the energy efficiency of a home, the lower the rate of foreclosure and problems with paying mortgages — surprise, the energy bill is lower. And, greater energy efficiency correlates with better business performance. Thus, investing in helping people and businesses engage in energy efficiency has a very interesting set of intertwined benefits that aren’t necessarily obvious at the first glance.
The US Congress isn’t making much news, nowadays, about real bipartisan action. Energy efficiency is a win-win-win arena which should have strong support on both sides of the aisle (even in the face of fossil-foolish contingents interested more in “Drill! Baby! Drill!” rather than sensible energy policy). If actually interested in serving the common good, this is the sort of legislation that should pass on voice vote from both the House and the Senate.
NOTE: While Merkley and Lugar merit praise for this legislation, which we should hope passes in some form, this falls short of the massive benefits that would come from adoping the Architecture 2030 W4 plan to insulate America from economic devastation.