What’s Slowing Down Energy Efficiency Adoption?

Posted on 30. Aug, 2010 by Shay Walsh in Blog

Energy Efficiency adoption is slow

What is keeping us as a nation from moving forward with energy efficiency?

The Clean Tech Open National Conference took place this summer in San Jose, California assembling the brightest and most talented minds to debate how energy entrepreneurship can power our economy back to life. The Energy Efficiency Panel brought up the important state of improvements made in energy efficiency and the elements of the movement that need more work. According to experts, the Nation has made a generally steady progression with items like household appliances but where advancement in improved efficiency is slowing is in markets of more complex systems such as the home structures we’re creating or the energy grid. The implementations made in household appliances have cut their energy use in half over the past 30 years so imagine if these processes could be coordinated at a more developed level of use. The adoption of energy efficiency has slowed down in general due to a variety of problems that are keeping us as a nation from moving forward with implementing key energy efficiency elements on a more wide-spread and larger scale. The government is touting energy efficiency as the fastest path to mass adoption and job creation, so in reality, why is energy efficiency adoption taking so long?

The panelists at the Clean Tech Open addressed the key points which they feel are restricting the nation from keeping a strong tread in the energy efficiency standards department. Some of the issues they addressed are as follows:

Regulatory problems

Regulating our power utilities so that the sale of power is separate from profits, and instead creating incentives which  promote efficiency has been a major driver of increased energy efficiency for the state of California, in particular. If other states could embrace the idea of incentives and rebates, the increase of the adoption of energy efficiency efforts are limitless. Policies should be clearly articulated and incentives should be performance based so the consumer can understand how to benefit from making the switch to more energy efficient lifestyles.

Commercial building owners versus building management

It is hard to get an energy efficiency retrofit contract signed because of the focus on payback instead of return on investment. The payback time demanded by companies today is 18 months, however, over the ten year life of an asset such as new lighting, companies can realize up to a 50% ROI or more. But often the decision makers are not the building owners; they are facility or property managers focused on annual expense management and are usually distrustful of the energy savings promised by building technologies.

Access to capital

The sales velocity and deal flow is very slow in the energy efficiency space. This all makes it hard to be a start-up. Venture capitalists aren’t interested in funding firms that only provide energy efficiency consulting.  However, if your company can find the funds to endure the wait for a deal to close, the payoff is large.

The residential consumer value proposition

It seems that the lure of saving money on energy bills isn’t enough to convince residential consumers to have an entire house retrofit. Other benefits such as a quieter, less drafty, warmer homes with better air quality that will cure your child’s asthma will help make the sale.  Panelists concern definitely displayed how residential consumers just don’t seem inspired to buy.

One way to motivate them would be through certifications and building labels, which are helping to identify and raise property values for home and building owners that invest in energy efficiency. Consideration of incorporating requirements of energy efficiency standards in the building codes would be a great beginning to take initiative from the construction standpoint. Another great idea would be to involve home insurance companies by creating an annual or bi-annual energy efficiency inspection as an aspect of insurance rates.

What do you feel would continue to push the adoption of an overall energy efficiency lifestyle and continue to inspire job creation? Feel free to leave a comment and share your ideas on how to keep up the progression toward a more energy efficient future.

[via TriplePundit]

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  • Dan Magyar

    Most of the potential end users (Homeowners) that I have had direct contact with regarding energy efficiency projects are motivated by overall cost and how long to re-coup that respective investment. A percentage of that sampling don’t necessarily believe that they will actually see the savings presented. Some believe that their electrical meter is not reporting correctly and that somehow they have an “electrical” leak which is raising their electrical bill, subsequently they don’t believe they’re using as much energy as they are.

    With the existing tech gadgets which allow homeowners and businesses to have a real-time monitor to see their power consumption they have a tool to start the most important aspect in lowering overall electrical usage, behavior modification. After someone can see where the air conditioner is costing $1.75 per hour of use, it starts to sink in, if they (the meters) were sophisticated enough to show which tier the power was being supplied at, it would even be a better deterrent. When time of use is adopted we’re going to hear alot of screaming from the goups of people mentioned above who still don’t get it, to use less especially at peak times.

    The idea of having annual home inspections by insurance companies is I think D.O.A. besides being controversial. I have spoken with insurance agents who now don’t care if their insured homeowners have had electrical improvements completed by a qualified electrician or licensed contractor. To generate any momentum for the idea of home inspections by insurance companies would be a large undertaking and have an “Orwellian” big brother overtone, which I don’t think would be acceptable to the public.

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