Despite the fact that China has been developing coal-fired power plants quicker than anyone else in the world, China is now looking into leading on the low-cost solar and wind energy manufacturing front. According to the below article, they are investing in green technologies at lighting speed relative to the US, if not for health reasons, for pragmatic reasons. 2.5 billion people are expected to join us on this planet in the next few decades, so they are intelligently investing in a growing energy market that is sure to be much more demanding when these new arrivals show up - a market which is sure to involve tons and tons of clean energy. Calling all Americans, are you there? Are you witnessing this? Basically, there's a big difference between leading, and coming in second. No one remembers second. But let's drop the ego. Isn't it time we also cash in on all the green jobs and economic growth that is available through clean energy investment right now? http://www.nytimes.com/2009/09/27/opinion/27friedman.html The Power of Energy Efficiency Loans 09/14/2009
originally posted: http://madrad2002.wordpress.com/2009/09/14/the-power-of-energy-efficiency-loan-funds/ The University of Maryland student group I’m part of, UMD for Clean Energy, is getting involved in the city of College Park’s City Council Elections by pushing a green platform and mobilizing students to vote for candidates that support it. For an explanation of how much influence a student voting bloc can have in a local election, along with a description of the campaign, please see our FAQ here. What I want to talk about here is the chief policy we are pushing in our platform, and how every part of the country should be finding ways to implement this financing mechanism. That policy is an energy efficiency loan fund which utilizes a limited amount of public funds in order to leverage far greater private investment in order to finance the upfront cost of energy efficiency improvements for homes and businesses. There are different ways these funds can be set up and structured, but the premise is the same. We all know energy efficiency is the fastest and cheapest way to address rising energy demand, lower greenhouse gas emissions, and create green jobs. The problem is that the cost of the initial investment deters many homeowners and businesses from making improvements. At the same time, government money is limited, especially compared to the amount of money the private sector holds. This is where the loan fund comes in. The concept is pretty simple, where residents and businesses can borrow from this pool of money like they would a bank in order to pay for energy efficiency improvements in their home. Then, the loan can be repaid in payments roughly equal to the energy savings being realized by the improvements. We’ve been told in meetings with elected officials the best way to do this is through a modest property-tax surcharge. After the loan is paid back, residents will reap the benefits of substantially lower electricity bills. At the same time, labor will be needed to do the energy audits and retrofits necessary to reduce energy usage, which means jobs. This concept has already taken hold in other parts of Maryland. The city of Annapolis has set up a loan fund where the funds and risk are all taken on by the private sector with no public money necessary. Montgomery County recently passed a bill which sets up a green loan fund. We think there’s no reason why this can’t be done in a way that works for a small city like College Park. However, it appears this kind of financing can also be used at larger levels of government. The New York Senate just recently passed a groundbreaking measure which will leverage $112 million worth of public funds in order to drive $5 billion of private investment into one million weatherization for homeowners across the state! The article I linked also talks about how the legislation had bi-partisan support since it used free market solutions. Here are a couple of excerpts of how this would work… “the measure will finance upfront costs for one million homeowners to weatherize their houses, and let them repay the loans from the energy savings realized over time. The act, which makes funding available for job training, is also expected to create up to 16,000 new jobs.” “All a homeowner will need to do to save on energy costs and increase property values is to call a state certified contractor to perform a free or low-cost energy audit. The audit would identify the repairs and upgrades (like air sealing, insulation, new boilers) that can pay for themselves through the energy savings they create. The program’s Residential Retrofit Investment Fund would pay the full upfront costs, with consumers required to pay back the retrofit through future savings on their electricity bill. If the home is sold before the loan is paid off, the new homeowner takes over the loan agreement. Currently, homeowners must expend a lot of time and money to accomplish energy retrofits. They have to proactively find contractors they can trust to perform the audits and recommend a plan, then pay the full upfront costs of the work which could easily total tens of thousands of dollars. Few homeowners bother. Most cannot afford to.” Interestingly, the $112 million in public money is coming from revenues from the Regional Greenhouse Gas Initiative(RGGI) in which 10 Northeastern and Mid-Atlantic states participate in a regional cap and trade program for carbon dioxide emissions. The revenue comes from the purchase of pollution permits sold by the government to polluters. I know that in my state of Maryland, our government has squandered our revenues of $70 million, by just sending it back to consumers in rebates. Rebates that probably cover a months worth of electric bills. One can only hope we will be as smart as New York in the future, and use the next round of funds to do some real rate relief, while creating green jobs and reducing our carbon footprint. For all its criticisms, the Waxman-Markey bill which passed the House this summer and is being considered by the Senate actually uses public money to leverage private investment pretty well. It has a clean energy bank, which will leverage $10 billion dollars in public money to drive an estimated $200 billion dollars for clean energy investment. At the same time, it contains Sherrod Brown’s IMPACT ACT, which “would provide resources for small- and medium-sized manufacturers through a 2-year, $30 billion manufacturing revolving loan fund, which will provide much needed liquidity for domestic manufacturers to improve manufacturing processes and to retool and expand production of clean energy products. The Apollo Alliance estimates that, once enacted, the bill will create 680,000 direct manufacturing jobs and nearly 2 million indirect jobs over five years.” The bill will also provide $65 billion in allowances to local and state governments for energy efficiency programs across the county from 2012-2020. If local and state governments are smart, they will sey up energy efficiency programs like New York has set of theirs. Yes, hating on the status of Federal climate legislation has become an environmental pastime, but it would actually be a good idea to advocate for these financing mechanisms and more like them that apply to energy efficiency at the local level to be in the Senate legislation, which is what my group told Senator Ben Cardin’s energy aide last Friday. As Mckinsey recently found… “the U.S. economy has the potential to reduce annual non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in waste – well beyond the $520 billion upfront investment (not including program costs) that would be required. The reduction in energy use would also result in the abatement of 1.1 gigatons of greenhouse gas emissions annually – the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads. Such energy savings will be possible, however, only if the United States can overcome significant sets of barriers. These barriers are widespread and persistent, and will require an integrated set of solutions to overcome them – including information and education, incentives and financing, codes and standards, and deployment resources well beyond current levels.” That’s why my group is looking to get an energy efficiency loan fund going in our city of College Park. Won’t you join us? This past Friday three of our members (Hilary Staver, Matt Dernoga and Ethan Cowan along with MarylandPirg representative David Bransfield) held a lobby meeting in Washington, DC with Senator Ben Cardin’s aid on energy issues, Mr. Josh Klein. The discussion was centered on the development of the Senate version of the American Clean Energy and Security (ACES) Act passed by the House over the summer. We were able to both learn more about Senator Cardin’s stance on various aspects of the bill and bring attention to some potential improvements proffered by other members of the Senate. Happily, Senator Cardin continues to be a reliable advocate for a strong Senate cap-and-trade bill. Mr. Klein informed us that Senator Cardin’s previously expressed goal of tightening the 2020 emissions target to 20% below 2005 levels instead of the 17% set the in the ACES bill is still in place. This is in part because he wants to make the initial target as strong as possible in case it has to be lowered in order to secure the necessary sixty votes to overcome an expected filibuster once the bill reaches the Senate floor. With regards to the allocation of carbon permits, we learned that Senator Cardin is hoping to distribute a larger portion of them through auctions than the initial 15% found in the ACES bill. He has also cosponsored a potential clause in the Senate bill, the Clean, Low-Emission, Affordable New Transportation Efficiency Act (aka CLEAN TEA), that would auction 10% of the permits and use the revenue to set up a fund for new public and/or low-emission transportation projects around the nation. According to Mr. Klein, this amendment is still on the table and could well end up, at the least, in the version of the bill that passes out of the Committee on Environment and Public Works of which Senator Cardin is a member. On the economic side, we also discussed a provision included in the ACES bill called the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act. This provision would set up a $30 billion revolving loan fund to assist American manufacturing companies who want to either switch to producing clean energy technology or simply make their existing operations more energy efficient. Mr. Klein was unable to confirm whether a similar provision had been introduced for the Senate version of the cap-and-trade bill, but showed interest in the subject and promised to pursue it further. Lastly, we learned that Senator Cardin has cosponsored the Udall Amendment to the latest version of the Renewable Energy Standard, which calls for 25% of the nations electricity to come from renewable sources by 2025. This would greatly strengthen the Standard, which was only 20% renewables by 2025 with a 5% efficiency reduction option included when the House version was passed as part of the ACES bill over the summer. Overall Senator Cardin continues to be a champion for clean energy and the environment. Mr. Klein seemed happy to meet with us, and we were able to share with him an overview of UMD for Clean Energy’s planned local campaign for the semester. At present the cap-and-trade bill has not yet been introduced to the Committee on Environment and Public Works, but once it has passed through the committee and onto the Senate floor, we plan to arrange a similar meeting with Senator Barbara Mikulski’s office to encourage her to support strong cap-and-trade legislation as well. Hilary Staver Political Liaison Thanks to great outreach work by our political liaison, Hilary Staver, we have set up a lobbying meeting with Senator Ben Cardin's energy aid Josh Kline this Friday! This is fortuitous given how hard it is to schedule meetings with the hard-working and busy people of the senate offices. Now that we have the opportunity though, we can advocate for a stronger version of the American Clean Energy and Security Act (ACES) from the senate. It is most appropriate to target Ben Cardin's office because the Maryland Senator sits on the Environment and Public Works committee, who is partaking in crafting the senate version. In the meeting, we'll likely cover some talking points previously noted in Media Director Kenny Frankel's "Clean and Green" diamondback article, which can be found on our Media page. Anyways, if you want to attend this meeting, which is an invaluable experience, contact Hilary at hstaver@umd.edu and she'll give you more details on how you can participate. It will be held this Friday, September 11, at 4:30pm in Cardin's office on Capitol Hill in DC! We hope we have a lot of people come out! Kenny Frankel Media Director Nice to have you back! We know that it's tough to leave summer behind, but let us reassure you that if you stick with us there will be plenty of good times for good causes this semester. We're pretty excited about our plans, which you can read about here on the website by clicking on the tabs 'Green For College Park' and 'Federal Climate Bill'. Or, even better, just come out and talk to us at one of our upcoming events! Join us for Worship the Sun this Friday, September 4th from 11am to 4pm, on McKeldin Mall near the sundial. Chill out in the sun (yes, there should be good weather), listen to music, eat delicious home-made cookies, play games and learn all about solar power. Don’t forget to wear yellow. On Monday, September 14th we'll be getting down to business at our kickoff meeting. We'll be meeting at 7pm in the Stamp's Pyon Su room. This will give you a chance to learn more about our plans to Green College Park and help pass a federal climate bill. Don't miss our guest speakers College Park Mayoral Candidate Andy Fellows, Thomas Cannady of Prince George’s Conservation Core, and ENSP Professor Bruce James (our faculty advisor). Shannon Simmons Group Member |  AuthorUMD for Clean Energy is a student activist group at the University of Maryland. In the past, they have successfully petitioned the university and University System of Maryland Board of Regents to commit to carbon neutrality by 2050. This past spring, they were successful in collaborating with statewide environmental groups to pass the Greenhouse Gas Reduction Act, which sets the strongest short-term emissions reduction target in the nation – 25 percent reductions from 2006 levels by 2020. The group has also recently engaged at the federal level, lobbying for climate legislation which passed the House of Representatives this past June and will be considered by the Senate in the fall. ArchivesMarch 2010 Categories |
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