If you dropped $100,000 on the street, you'd probably notice it and want to pick it back up. Yet for 30 years, building owners have been leaving thousands -- if not millions -- of dollars on the table by not doing energy efficiency projects and plugging energy that leaks.
But that is a trend that we believe is about to change.
The opportunities and obstacles within energy efficiency are well known. Since buildings are responsible for 40 percent of global energy consumption and 33 percent of carbon dioxide equivalent (CO2e) emissions, the potential size of the retrofit market is massive: Deutsche Bank estimates that $289 billion worth of investment would produce savings in excess of $1 trillion in the U.S. alone; put another way, every dollar invested in energy efficiency produces three dollars of savings.
The challenges -- which include high upfront costs, misaligned financial incentives between owners and tenants, mortgage covenants that prevent the sourcing of additional capital, misunderstood/mispriced risk and a lack of transparent data -- are equally formidable.
Akin to how the internet was virtually unknown outside of government, academic, and tech circles from 1970 to the mid '90s, energy efficiency has had a niche status for the last 30 years that has largely been confined to the “performance contracting” model in municipal, university, school, and hospital buildings. Large-scale residential and commercial building retrofit projects have basically not occurred.
But to quote Yogi Berra, “The future ain’t what it used to be.” In taking a global perspective and working with policymakers, entrepreneurs, and capital providers on four continents over the last 30 months, my team at the Carbon War Room found that we currently have all the policy, technology, and financial mechanisms required to profitably achieve gigaton-scale reduction of CO2e.
In our forthcoming white paper, “Raising The Roof: How to Create Climate Wealth Through Efficient Buildings” and an accompanying webinar on July 16, we detail global innovations in technology, finance, and policy, while providing program descriptions, case studies, and lessons learned. Some of these innovations include:
- Big data technologies, including digital audits, retro/continuous commissioning, optimization, and demand response
- Off-balance-sheet financing like ESAs, EEPPAs, MEETS
- Property-assessed clean energy (PACE) financing
- On-bill tariffs/repayment
- Public/private partnerships
- Mandatory energy monitoring and disclosure programs
To date, most of these innovations have existed in a vacuum and without cross-sectoral comparison or application. The intent of our white paper and webinar is to bridge this gap and inspire you, the change agent, to join us in our mission to turn waste into profit.
Don't forget to sign up for the July 16 webinar featuring discussion among thought leaders in the energy efficiency space.
Joshua Kagan is the operation lead for energy efficiency at the Carbon War Room.