On the road to going green, Americans are taking basic, cost-cutting measures. When it comes to spending money on energy retrofits, the average American still has their hand in their pocket, according to a recent Harris Poll.
Most Americans are taking basic steps to go green > turning off lights, televisions or other appliances when not in use (82%), replacing incandescent bulbs with fluorescent ones (58%), using power strips (56%), looking for ENERGY STAR labels when replacing appliances (55%) and using low watt bulbs (54%).
When it comes to investing in energy efficiency, Americans are reticent. The poll notes that less than half of Americans have installed a programmable thermostat (37%), sealed gaps in floors or walls around pipes or electric wiring (34%), installed low-flow faucets (29%), energy efficient windows (28%) or added insulation to an attic, crawl space or accessible exterior windows (27%).
Surprisingly, despite all the marketing, just in one ten U.S. adults (11%) have conducted a home energy evaluation or audit. And there are regional differences in how homes go green. Three in five Westerners (59%) use low wattage light bulbs compared to just 48% of Easterners. Two in five of those living in the West (40%) have installed low-flow faucets compared to just 25% of those in the East and 23% in the Midwest. In the meantime, over half of Southerners (55%) change their air filters monthly in comparison to just 27% of Easterners and 28% of Westerners.
The technology is there > green buttons, smart meters, yet one in five Americans (21%) say they have been contacted by their utility or co-op about energy efficiency tools. Nationwide, we’ve been good about it, as nearly 1/3rd of Westerners (32%) have been contacted compared to just 16% of Midwesterners.
The green technology item that Americans really want is a dashboard in their home (48%), even with the understanding that they would have to be proactive about their energy use. The dashboard is exciting because many Americans would prefer to control their energy usage – seven in ten U.S. adults (69%) would prefer to manage that energy distribution themselves while only 9% would prefer to have their utility manage their energy use.
Technology is ahead of adoption. American families are proactive about taking simple steps to be more conscientious about using and paying for energy in their own homes. As to be expected, the recession has curtailed many from making any large green improvement investments. Perhaps energy companies will need to come up with more stimulating incentives to inspire customers to adopt energy efficient solutions.
Santa Monica has the goal of becoming a zero-waste city by 2030. The City recently took additional steps in that direction by becoming perhaps the first in the world to ban almost all single-use disposable consumer items. And you thought the solar-powered Ferris wheel was revolutionary…
The newly-passed law aggregates various smaller efforts targeting plastic coffee stirrers, disposable cups, paper plates and cigarette butts that fill up ever-shrinking landfill space and add to the carbon footprint.
The law is believed to be the first of its kind in the country < perhaps the world < and gives Santa Monica very definitive steps to reach the goal of going zero-waste by 2030.
“Santa Monica is a city on a hill for those seeking to truly protect the oceans and tidal areas. Even land lubbers can appreciate the benefits of never seeing another stray paper cup crunched in a storm drain,” optimistically offers Heal the Bay’s executive director, Karin Whale.
As the city is a prototype, researchers studying climate change and the green economy have asked to make Santa Monica a case study for the next 20 years to see how well the ban functions in the 8.3 square mile City.
“You created Downtown apartments that do not provide parking specifically to attract people without cars,” offered city resident Edmund Furror, “Now you want us to get in cars to get necessities for life?”
The ban has created unusual alliances within the Santa Monica community of constituency groups that have never before advocated on the same issues. For example, a group calling itself SMC-Squared (Santa Monicans for Condoms and Convenience), consists of medical professionals and singles rallying against the ban’s impact on prophylactics and single-serving frozen dinners > both of which are essentials to the young professional lifestyle.
“I’m begging you for a compromise,” Betsy Berson Foursquare of the Venice Family Clinic told policymakers. “Companies are making condoms thinner and thinner these days. It increases the chance they’ll break, but that’s still better than the pull-out method.”
By Jodi Summers
Heads up to the accounting department > you may think your company has a green policy, but many businesses are missing key green financial opportunities. The reason? A lack of communication / collaboration between tax and sustainability departments.
Here’s the rub > 28% of tax directors believe their company has a sustainability strategy or is developing one, compared to 90% of CSOs recently surveyed by Ernst & Young LLP. Get on it before you CEO finds out. Think RSIO > Reduce, Switch, Innovate, Offset
“Reducing energy consumption and carbon emissions, switching to alternative energy and fuel sources, innovating for cleaner technologies and offsetting carbon emissions – all of these efforts have tax considerations,” said Paul Naumoff, Global and Americas Leader of Climate Change and Sustainability Services and CleanTech Tax Services. “Companies with tax departments that aren’t taking sustainability efforts into account are missing an opportunity.”
Apparently, many businesses are leaving green of money saving opportunities on the table. Only 16% of companies with an environmental sustainability strategy have their finance departments actively involved, according to the Ernst & Young survey titled “Working Together: Linking sustainability and tax to reduce the cost of implementing sustainability initiatives.” The survey featured responses from 223 senior executives at companies. Of the survey respondents, 19% were Chief Sustainability Officer (CSOs), while 81% were tax directors or their equivalent.
All cushy with their positions, employees are not keeping up to speed with state and local green incentives, as more than 37% of survey respondents are unaware of incentives for sustainability initiatives. Sure, more than 80% of finance department are aware of federal tax deductions for energy efficient buildings and incentives for renewable energy, but when it came to state tax credits and incentives, awareness levels hovered around 50%…and a meager 17% noted that their companies actually use available green incentives. In other words, companies are spending a lot more money than they need to spend.
Ernst & Young LLP notes that a company can effectively internally communicate sustainability initiatives and identify incentive opportunities throughout the organization by framing the discussion in broad categories:
· Reduce consumption of natural resources and carbon emissions.
- Switch to alternative energy and fuel sources.
- Innovate and develop new clean technology and less carbon-intensive or lower-emitting products and services to meet the demands of the transforming economy.
- Offset carbon emissions.
Opening up a corporate dialogue using RSIO framework allows companies to better identify incentives and tax credit opportunities related to their sustainability initiatives > improving their return on investment.
Some national examples of incentives include:
· Federal: IRC Section 179D: An energy efficiency tax deduction for commercial buildings can help reduce the cost of green building strategies and help building owners minimize energy consumption and improve energy efficiency.
- LEED Buildings: Businesses can make use of the framework provided by the Leadership in Energy and Environmental Design (LEED) to achieve specific environmental sustainability metrics in their building construction. LEED incentives are currently offered by 5 states, 18 counties and over 69 cities and towns. These include property tax abatements, income tax credits, and non-monetary benefits such as expedited permitting.
· Federal: IRC Section 45 & 48: For facilities that produce and sell electricity generated from certain renewable resources, Section 45 provides an annual credit per kilowatt hour of energy sold to an unrelated person or company for each of the first 10 years of operation of a renewable energy facility.
· Federal: The U.S. Department of Energy’s (DOE) Funding Opportunity Announcements: DOE provides grants for energy efficiency and renewable energy projects.
· Companies looking to invest in developing countries can leverage Clean Development Mechanisms (CDMs), which, as defined in the Kyoto Protocol, allow companies to invest in projects in developing countries that can be shown to measurably reduce greenhouse gas emissions. After a CDM project has been implemented, project participants receive Carbon Emission Reduction (CER) credits. Companies in industrialized countries can credit the CERs earned through their investments in CDM projects toward their emission targets, sell their CERs to buyers in other industrialized countries or trade them on global carbon markets.
In California, check with Sacramento and local governments to find benefits specific to our area. Sites like www.ey.com/climatechange are a recommended place to start.
by Jodi Summers
The government has been a leader in making its buildings green, using its long time horizon to make the energy investments pay for themselves. As far as going green goes, what works for the government often does not work for the private sector. Business expects to see a return on investment in the two-year time frame, not the 6-to-20 years the government will wait.
The Better Buildings Challenge aims to stimulate the private sector. While there is plenty of anecdotal evidence about the energy efficiency and desirability of green building “there still isn’t enough data to factor the added value of green into appraisal and lending processes,” notes Eric Bloom of Pike Research.
Just 0.2% of the five million commercial buildings in the U.S. are certified green, making it hard to do an accurate comparison, observes Pike Research. What is true of Class A space in New York, Los Angeles or San Francisco isn’t necessarily the case in the Dallas, DeKalb, Duluth or Des Moines where energy costs are lower and corporate environmental responsibility is not as motivating as the bottom line.
Currently the U.S. Government is in green building overdriving. Pike Research estimates that the market for greening of commercial buildings will increase to $100 billion by 2017.
The brilliant part of The U.S. Department of Energy’s Better Buildings Challenge, announced by President Barack Obama and former President Bill Clinton, is that it was been achieved through strategic partnership and does not require the approval of the Republican Congress.
The energy to operate commercial buildings costs about $200 billion every year. And on average, 30% of this energy is wasted. The goal of the Better Buildings Challenge is to engage building operators nationwide in improving energy efficiency by 20% by 2020.
“Upgrading the energy efficiency of America’s buildings is one of the fastest, easiest, and cheapest ways to save money, cut down on harmful pollution, and create good jobs right now,” observed President Obama. “But we can’t wait for Congress to act. So today, I’m directing all federal agencies to make at least $2 billion worth of energy efficiency upgrades over the next 2 years – at no up-front cost to the taxpayer. Coupled with today’s extraordinary private sector commitments of $2 billion to upgrade businesses, factories, and military housing, America is taking another big step towards the competitive, clean energy economy it will take to win the future.”
1.6 Billion Square Feet Committed
$2 Billion in Financing through Allies
+300 Manufacturing Facilities
The $4 billion challenge is the latest move the Obama administration has made as part of its “We Can’t Wait” campaign to bypass a deadlocked Congress and spur job creation, even as the President pushes lawmakers to pass a $447 billion jobs bill.
We’re proud to say that Los Angeles is one of an elite group of communities, companies, universities and organizations working to improve their bottom line by saving energy.
Mayor Antonio Villaraigosa and the City of Los Angeles have launched the Los Angeles Commercial Building Performance Partnership to support development and financing of comprehensive energy efficiency and water efficiency upgrades in commercial buildings.
Los Angeles expects approximately 30 million square feet of commercial property to be audited, using $3.2 million in Recovery Act funds with the goal of driving at least $25 million in total investment during their partnership in the Better Buildings Challenge.
The initiative is part of the California Energy Commission’s Energy Upgrade California program, a statewide effort to roll out a network of utility-incentive packages, pilot innovative financing approaches.
Since June 2011 LA County has imitated energy audits for more than 25 million square feet of commercial space — from small neighborhood retailers to downtown skyscrapers. Additionally we are developing a directory of capital providers to facilitate access to project funding options.
“Investments in building retrofits and energy efficiency can make a real difference in the American economy, by creating jobs, growing our industries, improving businesses’ bottom lines, reducing our energy bills and consumption, and preserving our planet for future generations,” concludes President Clinton. “I am proud so many members of the Clinton Global Initiative have joined this Challenge. Working together, I am pleased the commitments to the BBC have grown from the initial $500 million and 300 million square feet that we announced in June at CGI America, to the $2 billion investment with over 1 billion square feet of retrofitted space.”
The SAVE Act, is new bill being proposed in Congress, would create 83,000 jobs and generate $1.1 billion in annual energy bill savings. Officially known as the “Sensible Accounting to Value Energy” (SAVE) Act, it would require mortgage lenders to include expected energy-costs savings into the value of a home. Bill sponsors, Senators Michael Bennet (D-Colorado) and Johnny Isakson (R-Georgia), call the bill, ”A win-win for the economy and the environment.”
The Institute for Market Transformation notes that SAVE Act would help revitalize the hardest hit sectors of the economy by providing lower rate mortgage financing for cost effective energy improvements; allowing homebuilders and homeowners to recover the cost of efficiency investments; and enabling better federal mortgage underwriting while lowering utility bills for American households.
“It would allow folks to retrofit their homes and be rewarded for it over the life of the loan,” Senator Bennet enthused.
Let’s put the SAVE Act into action using a recently built home as our example. Most likely the newer home is as much as 75%-more energy-efficient than its older neighbors > saving the owner $1,500 a year. Under the SAVE Act, that savings would be factored into the value of the home and the borrower’s ability to make the mortgage payments.
Expected benefits include:
* Enable federal mortgage programs to improve the quality of mortgage underwriting and provide an accurate picture of repayment risk and the expected costs of homeownership
* Greatly accelerate the supply of and demand for energy-efficient new homes
* Quickly return any incremental cost for homebuyers due to home efficiency improvements
* Put people in the construction and manufacturing sectors back to work renovating and building energy-efficient homes and products
“It allows us to build and sell more energy-efficient houses, which is a win-win,” shared Randy Melvin of Winchester Homes. “It’s good for us, it’s good for the environment, it’s good for the consumer, it’s good for our country’s energy independence.”
The average homeowner spends more than $2,000-a-year on energy, yet it is not factored into appraisals, unlike insurance or real estate taxes.
“Let’s say you install double-pane windows in your house that create energy efficiency, that’s a cost as homeowner, but it’s a savings that the lender can now recognize,” concludes Sen. Bennet.
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