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Re:think report: what businesses need to know about energy efficiency
May 8, 2014
New Resource Bank’s latest re:think program, on May 1, brought together a panel of energy efficiency experts who provided a complete picture of how businesses can save money and help meet local and state climate action goals, and what options are available for funding energy efficiency projects.
The speakers were Bob Hinkle, CEO and founder of Metrus Energy and board member of the California Energy Efficiency Industry Council; Roger Kim, who leads the development and implementation of environmental, climate and energy policies and programs for the city of San Francisco, plus several members of his team; and Marisa Uchin, senior manager of energy efficiency strategy, customer energy solutions for Pacific Gas & Electric.
The program took place on one of the hottest days of the year—a reminder to participants of the need for energy efficiency measures. Panelists cited a number of striking statistics, including:
- Commercial buildings use more energy than any other sector in the state: 38 percent of electrical power and 25 percent of natural gas.
- In San Francisco, building use, construction and demolition accounts for 56 percent of greenhouse gas emissions.
- Businesses typically get payback in a year for energy improvements they make under the city’s Energy Watch program.
- The city’s climate goal is to cut carbon emissions to 80 percent of 2010 levels by 2050. To date, reductions amount to 14 percent, even though the city has grown.
- In California, energy use has been relatively flat over the past 35 years despite a growing population, but in the U.S. as a whole it’s up by 50 percent.
Policy is a key driver for California’s energy success, noted Uchin. Energy efficiency is a priority for the state, and it has enacted strong climate action legislation (AB 32). Additionally, utility profits are not tied to energy use, she said.
San Francisco’s Kim said energy efficiency is also a priority for the city because it saves money and creates jobs along with cutting carbon emissions.
For businesses, however, financing can be a major barrier to implementing energy efficiency measures, said Hinkle. “Many private companies just don’t want that kind of debt,” he said. “There is competition for the money, and they’re looking for a shorter payback.”
His company, Metrus Energy (a New Resource client), develops and finances large-scale efficiency retrofit projects with efficiency services agreements (ESAs). ESAs are similar to solar power purchasing agreements, which allow companies to implement projects without an upfront investment or additional debt risk.
More incentives are needed to bring commercial buildings to code, said Uchin. “There are limits to [California’s] ability to finance energy efficiency,” she said. “We can only incentivize beyond code, and so many buildings are nowhere near it.”
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