Removing barriers to energy efficiency

Charlie Burr

Smart investment in energy efficiency represents one of the most cost-effective ways to reduce greenhouse gas emissions and provide much-need economic relief for everyday Oregon families.

But as the energy efficiency bill HB 2626 gets its first information hearing today, it's worth taking a look at how Oregon is doing in comparison to other states. 

The short answer is there's a lot of room for improvement.

Earlier this year, the Rocky Mountain Institute released a study that for the first time compared states' productivity per kWh. What they found is that our country could reduce our energy consumption by 30 percent if we just met the energy efficiency levels of the top 10 states. And if the rest of the country matched California's energy efficiency performance, we'd reduce our consumption by a whopping 40 percent.

For perspective, a 30 percent drop -- 1.2 million gigawatt hours -- is equal to 62 percent of our nation's coal fired electric power.

Despite the good work done by NGOs, utilities and local contractors, Oregon still ranks 36th out of 50 states. We can do a lot better.

Improving energy efficiency starts with removing barriers. And that's the approach taken by HB 2626, a starting point for a broader discussion about doing more with less. The bill is, of course, very much a work-in-progress, but holds the promise of helping a lot of Oregon families without using scarce taxpayer resources. It seeks to help families access capital for cost-effective home improvements and upgrades working through Treasurer Westlund's office.

The cost of weatherization, heating and cooling upgrades, Energy Star appliances pays for itself, but requires up-front expenses that can be difficult for working families. This bill connects homeowners with investors looking for modest, predictable returns. And it also seeks to help more families get access to good information about cost-effective efficiency options.

Maximizing the productivity of each kWh is an on-going process. And the really exciting thing is there's so much we can do. The knowledge and expertise in our own backyard -- especially within our local Oregon firms -- only continues to grow. 

Investment in energy efficiency will create good jobs for Oregon and produce a multiplier effect as reduced energy costs free up more money for groceries, books, and all the household goods that families need but struggle to afford. Working with stakeholders, sponsors will continue to refine HB 2626, but the bill represents a smart starting point for one of the most effective economic and environmental investments we can make: improving our state's energy efficiency.

Comments

  • Tom Vail (unverified)
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    Am curious if the mix of industries has a major effect on the states that show high performance in the RMI study. San Francisco with almost no heavy industry remaining and a very large service industry differs greatly from Portland which still has a large component of heavy industry. Since heavy industry uses far more energy to add value than do service industries, for example, might not this explain a big portion of the "performance rating?" It appears that most of the states in the high performance category have very high service industry to heavy manufacturing ratios. Your desire to remove barriers to energy conservation is admirable. Basing your argument on an RMI study that may have a significant built in bias gives me pause. If I am wrong about the RMI study, I would be interested to know that and understand why. Thank you.

  • Jim (unverified)
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    HB 2626 is a critical piece of implementing energy efficiency more quickly to save Oregonians money , fuel, and carbon. The financing assistance will be very helpful.

    The other important energy efficiency bill in this session is SB 79 which will result in significant savings in energy codes in new buildings, aiming to decrease to near zero by 2030. These investments in more energy efficient buildings and homes will last for decades and centuries to come.

  • The Libertarian Guy (unverified)
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    Some of the barriers that need to be removed are those that prevent, or make owning a private public transportation business difficult.

    I have seen some information that suggests we could save 30% or more of fuel used in public transportation if we had more alternatives.

  • Adam Zielinski (unverified)
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    HB 2626 is a great idea and will definitely help a lot more people upgrade the energy efficiency of their homes, saving money and energy while saving the planet in the process.

    As a Home Performance with Energy Star contractor and Energy Trust Trade Ally, I see customers every day that want to do all they can to make their home as efficient as possible, but they can't afford to do everything. Financing is the big bottleneck. And although the Energy Trust currently has a great partnership with Umpqua Bank called Green Street Lending, sometimes it still isn't enough. HB 2626 promises to go further and allow more people to have their homes upgraded.

    The only thing we don't need would be for this legislation to accidentally undermine the Home Performance with Energy Star program and contractors, by forcing people to use the Energy Trust or Oregon Dept of Energy as general contractors.

    Home Performance contractors are highly trained, skilled, and certified to take a holistic approach to home energy efficiency, taking into account health and safety, indoor air quality, lighting, insulation, heating and cooling, windows, air sealing, and duct sealing, you name it. We are experts at testing and assessing a home with high tech equipment and coming up with a comprehensive scope of work to make the home as efficient and as comfortable as possible, even up to Energy Star or LEED standards.

    But if this legislation ends up requiring people to have Energy Trust or ODOE staff do the testing, assessing, and scope of work identification instead of Home Performance contractors, it will undermine our businesses and deprive customers of our expertise, relegating us to compete with typical lowest bid contractors to install individual measures.

    I strongly support HB 2626 in concept and theory. I just hope the final legislation ends up being a win win for taxpayers, customers, and the Home Performance contractors that are already out there in the marketplace doing this work.

  • dan (unverified)
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    Energy efficiency is not the silver bullet to reducing greenhouses gases. Take an economics lesson or two.

    Take a look at this article here that explains it:

    http://www.cascadepolicy.org/pdf/env/2008_34.pdf

  • dan (unverified)
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    A second note. Mandating energy efficiency in homes and buildings and giving out millions of dollars in taxpayer funds to pay for energy efficiency upgrades is one of the dumbest ideas you could dream up.

    "SB 79 makes it seem easy to pass mandates that force home and business construction to become energy efficient or, in this case, zero emission. Although passing the bill may be easy, achieving that goal is the true challenge. If a goal of net zero emission homes and buildings were mandated and stringent building codes were enforced, this would significantly increase the cost of homes and commercial buildings in Oregon and would have far reaching economic effects due to inflated commercial and residential building costs. "

    "The government is supposed to reflect the needs/values/desires of the people that it represents. If Oregon citizens want extremely efficient buildings, then they will demand it via the market, and construction companies will respond to this market demand by providing these types of buildings. Forcing builders to provide a “product” that may not be valued as much by consumers will put even more pressure on a sector of the economy that is doing poorly in this economic downturn. "

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    Haha, cascade policy! Argument lost. :)

  • Peter Greenberg (unverified)
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    Great website, I just found it. We manufacture energy efficient lighting for industrial spaces in Eugene and save a lot of energy, 75,000,000 kwh/yr and climbing. I have many thoughts on the ODOE BETC program having worked closely with it for years. 1. The folks there are way over worked, need to bring the system on line and if the legislature mandates more eligible projects, needs to give them more personnel. 2. The set up now, where there is a 1 year and a 5 year BETC cutoff at $20,000 could be much more equitable. If you are a non profit or a business not making much money (lots of them) and need to sell your BETC the pass thru rate goes from 30.5% to 25.5% at $20,000. Also the payout goes from 1 years to 5 years. An example Job cost of $19,999 BETC amount $6,999, Tax credit "payout" 1 year. Pass thru rate of 30.5% or $6099 Job cost $20,000 BETC amount $7,000, Tax credit "payout" 5 years with $2,000 years 1 and 2 and $1000 years 3,4 and 5. Passthru amount $5100 For a $1 more folks who sell their tax credit lose $999 and the person who buys their credit has to wait for 5 years to get the tax credits.

    Its tough to think of innovative ways to use the BEtC without costing the state money.

    Idea 1 Treat everyone the same, that is 35% credit of $19,999 ($6,999, lets call it $7,000) is for the smaller jobs, why not let everyone with jobs over $20k, get at least the same as the folks who do smaller jobs, the first year, there's no sense in treating people who do larger jobs worse than folks who do smaller jobs. If they get a credit of $7,000 the first year, they would get their money credited faster. Ideally an interim rate of 3 years could be set up. So far no savings to the state, but wait its coming. An example Job of $30,000. Currently $3,000 years 1,2 $1500 yr 3,4,5 Change it to $7,000 the first year, then split the rest over the next 4 years.

    Giving out more credits sooner won't help the state, but this could be offset by lowering the tax credit to 30% from 35%. People would rather get more upfront than wait longer.

    Big Idea 2 As people sell more and more tax credits, they lose more and more of the benefits, which far outweighs any savings with low interest financing of Bill 2626. The gov. wanted to make a fund like the Cultural Arts fund to buy some of the credits, I haven't heard of this idea for a while. I think it was a great idea in the right direction. I would go much further. PERS and the College Fund, are I imagine losing their ass with the stock market, why not make it so that the State could somehow sell the BETC credits at a discount to PERS, College Fund...at a rate of 30% rather then 35%, and then PERS makes some money by paying the customer who is doing the energy efficient project 25%. PERS would make 15% over 5 years, which would be a little more as the first few years are larger than the last 3. Currently when people sell their tax credit it makes no difference to the state. If someone buys a 1 yr BETC they make 13%. 100% -(30.5%/35%) and much more if they buy 5 year BETC 100%-(25.5%/35%) or 27%. the 5 year tax credit sells for more as you have to wait for longer to get your money back. Investors who buy the credits are one thing, PERS and other funds would be happy making less (making anything is a good thing these days). In this way, these state funds would be supporting energy efficiency projects in the state, I wouldn't have to waste so much time looking for pass thru partners and PERS would be happy. Buying a credit would take some thinking of a vehicle to do this, but it certainly could be done.

    thanks Peter

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