If I Had a Hammer: California Earmarks $3.1B for Retrofits, Appliances

Long the leader in energy efficiency, California has upped its budget for energy retrofits, new light bulbs and appliances.

Contractors, get those advertising flyers out there.

The California Public Utilities Commission has approved a plan to spent $3.1 billion over the next three years on energy efficiency programs, including green retrofits and appliance rebates.

The money will be filtered through the three large investor-owned utilities: Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. Overall, the program will cut the same amount of energy that would be produced by three 500 megawatt power plants.

The program supersedes existing programs, but the overall budget is 42 percent higher than the previous one. Inside the overall budget, $100 million will be dedicated toward appliance rebates, $170 million will go toward promoting energy efficient appliances and $500 million will be spent on encouraging industry to reduce energy consumption. Possible beneficiaries include LED makers, waste heat harvesters, and consumer electronics manufacturers. Companies that make air conditioners that cool the air with ice, for instance, could find programs tailored for them under which utilities will install these air conditioners at existing buildings and pick up all or most of the cost for building owners just to get rid of the old, inefficient AC system.

"There is nothing bigger we can do than energy efficiency in buildings," said Kevin Surace, CEO of green window and drywall maker Serious Materials.

The influx of money underscores two arguments many have been making over the past few years. First, that retrofitting buildings and replacing many of the hoary electrical devices inside of them could do more to reduce greenhouse gases and energy consumption in less time for less money than erecting solar panels or adopting biodiesel.

"The reality is that this is the only way we are going to move the needle on energy consumption," said Adam Tibbs, president of Project Frog, which erects buildings from walls and units built in factories.

Matt Golden, the founder of green retrofit/software developer Sustainable Spaces, recently wrote in a column for Greentech Media that a solar system that saved about $825 dollars a year would cost $23,380 and curb 2.8 tons of carbon dioxide over a 20 year period. A retrofit that saved a similar amount would cost only $10,800 and cut 3.5 tons of carbon dioxide.

"The new CA CPUC ruling sets the stage for the kind of bold effort we need to kick-start a new American energy efficiency industry," he said. "The CPUC Long-Term Energy Efficiency Strategic plan, for a 40 percent reduction in existing home energy use in CA by 2020, and all new construction built to zero energy, this new initiative puts real resources and resolve behind these important goals, and will keep California out in front as a leader in the global fight against climate change, and our national goals to create sustainable green jobs."

Two, that construction will likely emerge as one of the largest green industries.   

The challenging part has been getting governments to erect programs for efficiency. Homeowners and others, for instance, can recover 30 percent of the cost of solar systems in tax credits under the federal stimulus plan and even more under state programs. Homeowners get the same tax credits for energy efficiency retrofits, but the total is now capped at $1,500, thus limiting the appeal of energy retrofits.

Even so, the government is spending billions on retrofitting federal buildings and giving grants for school retrofits.