Berkeley/UCLA Law report discusses policy solutions to boost energy retrofits. Free webinar tomorrow (Thursday), June 20th at 10am features expert panel to discuss top findings.
As California moves aggressively to reduce greenhouse gas emissions from buildings, will the state leave behind its low-income residents? Many of these residents — 40% of the state’s population — live in multifamily housing units and apartments, where they have limited access to in-home retrofits that could save them on their energy bills and reduce overall emissions. These retrofits require upfront capital that low-income tenants may lack, as well as approval and awareness by landlords who may be unwilling or unable to support them.
To identify ways to help solve this thorny problem, UC Berkeley School of Law’s Center for Law, Energy & the Environment (CLEE) and UCLA School of Law’s Emmett Institute on Climate Change and the Environment are today releasing a new report, Low Income, High Efficiency. The report offers policy solutions to increase access to energy efficiency incentives and unlock environmental, financial, and quality-of-life benefits for owners and residents alike, including:
- Creating a single, statewide “one-stop shop” efficiency program administrator to comprehensively manage incentives and offer users a single point of access.
- Expanding innovative financing mechanisms such as “pay as you save” and third-party “energy budget” arrangements that take advantage of residents’ utility bills and private capital.
- Creating a comprehensive database to help prioritize retrofit projects and support energy data benchmarking and analysis efforts.
The report also contains numerous additional solutions for policy makers to consider, as well as five case studies focusing on California low-income multifamily properties that recently undertook efficiency projects, in order to yield valuable lessons learned. The findings resulted from two stakeholder convenings with experts across state energy agencies, local governments, housing owner/developers, environmental and housing advocates, and efficiency program implementers and contractors.
California has committed to reducing greenhouse gas emissions 40 percent below 1990 levels by 2030 and doubling the energy efficiency of buildings by that year, but the state will need significant improvements in the energy performance of existing buildings to achieve these goals. While the state has adopted aggressive standards for efficiency in new construction, owners and residents of existing low-income multifamily buildings face a particularly daunting set of barriers, including limited access to capital, complex financing arrangements and restrictions, and competing renovation needs. Low Income, High Efficiency offers a suite of policy innovations and proposals to address these challenges.
To discuss the report’s findings, CLEE and the Emmett Institute will host a free webinar on Thursday, June 20 (tomorrow) at 10am with an expert panel, including:
- California Energy Commissioner Andrew McAllister
- Peter Armstrong of Wakeland Housing
- Martha Campbell of the Rocky Mountain Institute
The new federal spending bill that just became law represents a big win for transit, clean technology and energy efficiency. Despite efforts by the administration to gut funding in all of these areas, a bipartisan majority in congress resisted.
Curbed covered the increased spending for transit:
The bill, which covers spending through the end of September, includes significant increases in transit funding. The Community Development Block Grant program, which many local governments have used to fund streetscaping, cycling, and pedestrian-friendly projects, would receive a significant boost, rising to $3.3 billion from the $3 billion allocated in 2017. Initially, President Trump’s budget called for eliminating the program.
In addition, the bill includes more money for Capital Investment Grants, which help pay for transit projects, increasing spending from $2.4 to $2.6 billion, and would allocate $1.5 billion for the TIGER Grant program, tripling the $500 million spent on the program in 2017. This Obama-era program has been a key tool used by state and local governments to fund new rail and transit expansions.
Notably, even Amtrak funding increased under the package.
Meanwhile, some of the most important research and clean energy programs at the Department of Energy were bolstered, as E&E reported [paywalled]:
Instead of eliminating the Advanced Research Projects Agency-Energy, DOE’s innovation arm, the package increases funding to a record level of $353 million. The Weatherization Assistance Program, which Trump also wanted to kill, would get a more than $20 million boost to $248 million. The deal keeps state energy grants and the Title 17 Innovative Technology Loan Guarantee Program intact.
It also would increase funding for the Office of Energy Efficiency and Renewable Energy, which Trump wanted to slash by more than half.
This is all good news, and it points to the bipartisan support for these key components of our climate mitigation strategies. There’s still a larger issue about the availability of long-term funding for these programs, given the massive deficits the federal government is running, particularly with the budget-busting tax cut passed last December. But for now, these programs are safe and even stronger, in a rebuke to the administration and transit and clean tech opponents.
California has ambitious goals to make our existing buildings more energy efficient, through improvements such as wall and ceiling insulation and efficient appliances and fixtures. We simply cannot meet our long-term climate goals without more progress on this front.
But these smart investments require upfront money, and it’s not clear yet how the state can make easy financing available. As SB 350 (De Leon, 2015) requires California to double the energy efficiency of existing buildings by 2030, large-scale private sector investment will be critical to financing these energy retrofits.
Join UC Berkeley and UCLA Law for an evening event at UC Berkeley Law on Thursday, September 21st, from 5-7pm to discuss these issues:
Keynote Address: Commissioner Andrew McAllister, California Energy Commission
Panel Presentations:
- Carmen Best, Independent Energy Efficiency Advisor & former California Public Utilities Commission supervisor
- Cisco DeVries, Founder and CEO, Renew Financial Group LLC
- Jon Wellinghoff, former chair of the U.S. Federal Energy Regulatory Commission (FERC)
Following up on our 2016 report from the two law schools, Powering the Savings, these speakers will focus on what metering technologies and new policies will be needed to unlock this large-scale financing. We’ll cover recent innovations, new policies, and promising success stories on metered energy efficiency that the state can build on to achieve these ambitious and necessary climate and energy goals.
Please RSVP today as space is limited. If you can’t attend in person, you can also livestream the event (registration required). Hope to see you there!
To make any lasting progress on climate change, we’re going to need to be a whole lot more efficient with the energy we produce. That means retrofitting existing inefficient buildings as much as possible to reduce waste.
The dream would be to make a home or commercial building energy retrofit as easy and scalable as rooftop solar has become. But so far nobody seems to have figured out how to do it. There are some promising options, which we explored in a recent policy report called Powering the Savings.
But maybe the missing ingredient has been the insurance market. The idea is that if insurers are willing to back a home or business retrofit project, then financiers should be much more willing to bring Wall Street-type money to the effort on a mass scale. As PR Newswire reported:
Sealed, an energy software company that empowers homeowners to pay for home upgrades like insulation, air sealing, and smart thermostats with their energy savings, announced today the implementation of a residential energy efficiency insurance policy from The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re.
This innovative program insures the performance of Sealed’s proprietary energy analytics, which both removes energy savings performance risk from homes that finance energy efficiency improvements and increases the confidence of third party capital providers.
The key here is trusted and verifiable software that can measure actual energy saved via specific efficiency measures. With software improving to do just that, these kinds of financing arrangements will be just around the corner.
I hope you can join me this morning as UC Berkeley and UCLA Schools of Law present a webinar on how California and other states can unlock private capital market financing for energy retrofits. It begins at 10am and ends at 11am, and you can register here to join.
The webinar will feature findings from our new report, Powering the Savings. The webinar will also include the following expert speakers:
- Jeanne Clinton, Special Advisor to the Governor for Energy Efficiency, California Public Utilities Commission
- Cynthia Mitchell, energy economist and TURN consultant
- Dennis Quinn, Chief Operating Officer and Co-Founder, Joule Assets. Inc.
It comes on the heels of the Sacramento Bee running this op-ed recently on our report and the need to address this challenge of making the state more efficient with the energy we produce.
Hope to “see” you there. We’ll also post a link to the recording in a few weeks.
California’s energy efficiency efforts for existing buildings have been treading water — when we need much faster progress. The Sacramento Bee ran an op-ed from me today on ways to address the challenge:
A solution might be to emulate the success of rooftop solar. It has spread quickly in part because many companies offer no-money-down, long-term loans, backed by capital market investment. The same financing could work with energy-efficiency retrofits, since they also promise to reduce electricity bills at a steady rate.
So why is private capital sitting on the sidelines? Because, unlike with solar panels, we haven’t been able to reliably measure the energy we don’t use due to energy-efficiency measures in buildings – and provide the documented, standardized savings to attract large-scale financing.
Fortunately, technology is coming to the rescue. New software and methodologies can more accurately measure and verify the energy saved through efficiency improvements, and can account for a variety of factors, such as weather and building use.
But the state needs a uniform, state-sanctioned methodology and technology standard in order to encourage utilities to base incentives on the measured efficiency gains. Ultimately, we’d like to see utility procurement of energy savings the same way they procure generation resources, as San Diego Gas & Electric just did in procuring 18.5 megawatts of energy efficiency, working with Willdan Energy Solutions on specific retrofit methods for local buildings.
You can read more on this topic in our latest Berkeley/UCLA Law report, Powering the Savings. You can also register to attend our webinar on this topic on Monday, April 18th at 10am.
Much of our efforts to reduce carbon emissions involves fairly complicated and advanced technologies. Whether it’s solar panels, batteries, flywheels, or fuel cells, these technologies have typically required public support to bring them to scale at a reasonable price, along with significant regulatory or legal reforms to accommodate these new ways of doing old things, from generating power to driving a car.
Yet ironically, here in California we seem to be making the most progress on some of these more technologically advanced areas, and not enough progress in one of the simplest and most cost-effective means of reducing carbon emissions: using less energy in our existing buildings.
Being more energy efficient certainly can involve technological advances, like LED lights instead of incandescent bulbs, lights with sensors that turn off when people leave a room, or more efficient heating or air conditioning units. But it is fundamentally about doing the same with less, and it can often pretty quickly pay off, given the reduction in utility bills that result.
But in California, despite billions spent on energy efficiency efforts, our energy efficiency efforts are barely keeping pace with the increasing demand for electricity. Current utility efficiency programs focus on voluntary, often self-financed measures, with rebates and fixed incentives meant to spur them on. Meanwhile, administrator costs are taking up half of the budgets for many efficiency programs.
Clearly, something needs to change if we are to have any hope of achieving our long-term climate and energy goals in the state. After all, it’s a waste to focus on expensive new renewables and energy storage if we’re not making better progress on the efficient use of the energy we already have.
Given this challenge, the state legislature recently acted to change the nature of our efficiency programs. SB 350 (De Leon, 2015) requires a doubling of efficiency in our buildings by 2030, while AB 802 (Williams, 2015) in part requires utilities to plan for efficiency programs that compensate building owners based on the measured energy saved. These steps will be necessary to change the paradigm and unlock more private investment in energy efficiency retrofits.
To recommend policies to boost this capital market financing for energy retrofits, UC Berkeley and UCLA Law are today releasing a new report “Powering the Savings: How California Can Tap the Energy Efficiency Potential in Existing Commercial Buildings.” The report is the 17th in the two law schools’ Climate Change and Business Research Initiative, generously supported by Bank of America since 2009.
The report describes ways that California could unlock more private investment in energy efficiency retrofits, particularly in commercial buildings. This financing will flow if there’s a predictable, long-term, measured and verified amount of savings that can be directly traced to energy efficiency measures. New software and methodologies can now more accurately perform this task. They establish a building’s energy performance baseline, calibrating for a variety of factors, such as weather, building use, and occupancy changes. That calibrated or “dynamic” baseline can then form the basis for calculating the energy savings that occur due specifically to efficiency improvements.
But the state currently lacks a uniform, state-sanctioned methodology and technology standard, so utilities are reluctant to base efficiency incentives or programs without regulatory approval to use these new methods. The report therefore recommends that energy regulators encourage utilities to develop aggressive projects based on these emerging metering technologies that can ultimately inform a standard measurement process and catalyze “pay-for-performance” energy efficiency financing, with utilities able to procure energy efficiency savings just like they were a traditional generation resource.
To learn more about the report and its recommendations, please join us for a webinar on Monday, April 18th from 10 to 11am. Speakers will include:
- Jeanne Clinton, Special Advisor to Governor Brown for Energy Efficiency, California Public Utilities Commission
- Cynthia Mitchell, energy economist and TURN consultant
- Dennis Quinn, Chief Operating Officer and Co-Founder, Joule Assets. Inc.
You can register via this site.
Hopefully, by tapping into the state’s spirit of innovation, California leaders can show the way to an energy efficiency revolution the way the state helped create a strong market for other clean technologies, like solar panels and energy storage. Because failure on the efficiency front could otherwise nullify so much of our progress in these other areas.
Yesterday Governor Jerry Brown signed SB 350 (De Leon), a landmark bill that pledges California to a 50% renewable goal by 2030, as well as a doubling of energy efficiency in existing buildings by that date.
Despite the environmental win, it’s been well-reported by the media and others that California’s environmental leaders got beaten pretty badly this last legislative session by the oil industry. Faced with a provision in SB 350 that would mandate 50% petroleum reduction by 2030 and a bill to codify 2030 and 2050 greenhouse gas reduction goals (SB 32), the industry launched a multi-million dollar campaign, full of false claims of impending gas rationing and price spikes, and targeted it at “moderate” Democrats in the legislature.
Signing ceremony today at Griffith Park in Los Angeles.
The plan worked. These democrats helped lead SB 32 to its demise and stripped SB 350 of the petroleum reduction goal.
But is it possible that the oil industry representatives missed an important provision in SB 350 relating to long-term greenhouse gas reduction goals?
Buried on page 59 in SB 350, the legislature for the first time codified the goal of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030 and 80 percent below those levels by 2050. The provisions begin in the findings section on the need to electrify transportation, via amendments to the state’s Public Utilities Code:
740.12. (a) (1) The Legislature finds and declares all of the following:
…
740.12. (a) (1) (D) Reducing emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050 will require widespread transportation electrification.
The legislation then directs utilities to file applications with the California Public Utilities Commission (CPUC) for programs to electrify transportation in order to meet these climate goals:
740.12. (b) The commission, in consultation with the State Air Resources Board and the Energy Commission, shall direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative…, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050 [italics added].
So in the context of electrifying transportation and utilities role in achieving it, the 2030 and 2050 goals are now law, giving the CPUC broad regulatory authority to achieve those goals in this sector.
This is no small potatoes. Electrification of transportation is absolutely essential to meeting long-term climate goals, given that almost 40 percent of emissions come from transportation. In the 50% petroleum reduction debate, it was clear that much of the decrease will be achieved anyway by 2030 given improved federal fuel economy standards and a continued leveling off of vehicles miles traveled per capita in the state – both of which basically would occur without any additional legislative action. But electrification of transportation will still be dependent on state action for the near term, including support for greater deployment of public charging stations and state rebates for electric vehicles purchases and leases, among other policies to boost this nascent industry. The 2030 and 2050 goals for electric vehicles now give the CPUC specific marching orders that would essentially achieve the 2030 petroleum reduction anyway, even without it being specifically called out in SB 350.
To be sure, this codification won’t benefit the full range of climate measures that California is taking for the years beyond 2020, when AB 32 authority plateaus. For example, other alternatives to petroleum, namely biofuels, are not covered by this provision. Currently, the low carbon fuel standard, a regulation under AB 32 authority, is the primary driver of biofuel deployment. Biofuels will be necessary to reduce emissions in the short term for passenger vehicles, at least until battery electrics become cheaper and better, and in the long-term for transportation like aviation and long-haul trucking that isn’t otherwise suitable for battery electrification. Cap-and-trade is also specifically authorized by AB 32 through 2020 and wouldn’t continue based solely on SB 350. In general, regulations from the California Air Resources Board to address climate pollution not tied to renewables, energy efficiency or electrification of transportation couldn’t be extended based solely on these provisions.
But the provisions could have another immediate impact, specifically with litigation over regional and local plans that may fail to take into account long-term climate goals. Most famously, San Diego’s regional transportation plan purports to reduce emissions from driving through 2035 but then backslides out to 2050. The agency argued it didn’t have to study the impacts out to 2050 because the goals are merely based in an executive order. The case is pending before the State Supreme Court on this issue (full disclosure: I co-authored an amicus brief with Legal Planeteer Rick Frank and Jayni Hein supporting the petitioner’s claims about the plan’s failure to study long-term impacts). But now petitioners in litigation like this one have a stronger case that the goals are in fact codified in legislation, and specifically in the transportation context.
And perhaps more importantly, these SB 350 provisions could now create a worthy rival to Big Oil. Big Utilities are itching to get into the electrification game, and they have the resources and power to compete with Big Oil in these legislative showdowns. While California doesn’t want to crowd out the electric vehicle space with utility entrenchment, the state will certainly need utilities to help with charging infrastructure and programs to manage the charging load more effectively. The provisions on Page 59 take the state down that path in a significant way, and the oil industry may soon regret their inclusion.
So while the environmental community has much to cheer about with yesterday’s signing in terms of renewables and energy efficiency, they shouldn’t overlook the important greenhouse gas provisions that may have an even more transformative effect on California’s long-term climate program — and the oil industry’s efforts to limit it.
This legislative season in California will rank as a big disappointment for environmentalists. The last-minute failure to secure a 50% petroleum reduction by 2030 goal, followed by the defeat (actually postponing) of the bill to set 2030 and 2050 greenhouse gas reduction targets, was a major blow for environmentalists used to getting what they want out of Sacramento. Many commentators are starting to blame Governor Jerry “above the fray” Brown for not doing more to secure passage in the Assembly.
But lost in these setbacks is the major accomplishment of boosting California’s renewable energy standard to 50% by 2030, coupled with a mandate to double energy efficiency in existing buildings by that year. SB 350 (De Leon) may have been stripped of the petroleum goals, but these other targets are significant accomplishments. The energy efficiency piece set forth a process for the California Energy Commission to set long-term targets and evaluate progress on a regular basis, while the renewable energy mandate essentially just adds the 50% goal into the previous legislation requiring 33% by 2020 — in other words, no new process needs to be created for California to continue down this renewable path.
And finally, SB 350 makes it easier for California to develop a western regional market for renewables that will cover neighboring states and allow California both to import renewables from out-of-state when we need them and export our surplus renewables to other states. The legislation allows the California Independent System Operator, which essentially manages California’s grid, to change its governing rules to allow regional transmission operators to become part of the system. That will facilitate the import and export of renewables, helping California to better balance our in-state supply and ensure that dips in production don’t result in more natural gas-fired power.
So while the legislative season may have largely ended in disappointment, the accomplishments that did occur are worth celebrating for environmentalists.
Rob Portman (D-OH)
Perhaps even more encouraging was the bipartisan authorship, with Senator Rob Portman (R-Ohio) co-authoring along with Senator Jeanne Shaheen (D-New Hampshire). Portman was one of just five Republican senators to admit earlier this year that climate change is real and that humans are playing a role.
Here are some details on the bill from the Cleveland Plain Dealer:
The bill’s features aren’t exactly sexy. Portman’s staff says the bill “establishes a voluntary, market-driven approach to aligning the interests of commercial building owners and their tenants to reduce energy consumption.” It exempts certain electric resistance water heaters from pending Department of Energy regulation.
It requires federal agencies to coordinate strategies on energy-efficient information technologies. And it requires that federally leased buildings without Energy Star labels disclose their energy usage when practical.
That won’t quite fit in a soundbite response to the NRDC and Portman’s other environmental critics.
Yet Portman explains it all as simply “good for the economy and good for the environment.”
It’s easy to get caught up in solar panels, batteries, and electric vehicles (I certainly do), but if we don’t get more efficient with the energy we have, those other technology pieces won’t be enough. This bill is overall a pretty small step, but it’s solidly in the right direction.
