Posts Tagged ‘efficiency’
Clean energy funding hot (and cold) in Ohio
Energy-efficient ice cream freezers installed at a new Pierre’s factory in Cleveland. (Photo Courtesy of Pierre’s Ice Cream Co.)
The Midwest is a hot spot for Clean Energy Funds, and an ice cream business is among the beneficiaries.
The scoop? So-called Clean Energy Funds, or CEFs, from sources including monthly surcharges on utility bills, have helped pay for energy efficiency and other improvements at places like Pierre’s Ice Cream Co., which opened a new, 35,000-square-foot factory in Cleveland almost a year ago.
Pierre’s used a state grant as part of a project that’s allowed the company to spend less money on the electricity needed to make its tasty treat — and keep the final product at an optimal temperature of minus 20 degrees when it’s stored in an on-site distribution center.
“The beauty of having all of this installed is that as we can increase volume, we will not be consuming more energy,” said Shelley Roth, president of Pierre’s Ice Cream Co.
“We’re hoping to see a savings of anywhere between 15 to 25 percent (on electricity costs).”
There are numerous other examples of states using CEFs for energy efficiency and renewable energy projects in the U.S. But Ohio is among a number of states working to change the recipe for funding projects. Ohio’s version of the CEF was called the Advanced Energy Fund, or AEF. Pierre’s received money for its upgrades through an Ohio program supported by the AEF and federal funding.
The Ohio experience
Ohio’s Advanced Energy Fund was in place for a decade, until legislation that allowed for a 9-cent monthly surcharge on utility bills expired in December 2010, said Chad Smith, deputy chief of the Office of Energy at the Ohio Department of Development.
The state estimates that 120 companies are saving a total of $13 million in annual electricity and natural gas costs due to improvements supported by the Advanced Energy Fund.
Since the expiration, Ohio has restructured its remaining program dollars into an Energy Loan Fund, using payments from previous Advanced Energy Fund investments and supplemental federal funding.
“It was successful,” Smith said of the former AEF program. “One of the things we saw, however, was that the demand (for grants) exceeded the supply. So we ended up looking toward financing that could be sustainable, into the future.”
Under the state’s new Energy Loan Fund, money given to companies for efficiency improvements will be recycled, Smith said. Eligible projects include upgrades like insulation, lighting, heating and cooling systems, renewable-energy projects and improved production processes.
“The projects that we do will be repaid with a financing program,” he said. “The funds will come back into the program, and they can be loaned out again and again.”
The program is structured so companies can design a schedule that uses savings from reduced energy costs to pay back the loan, in 15 years or less and at an interest rate below prime, Smith said.
The Energy Loan Fund, with about $10 million per year available, received 60 pre-applications after its December launch. After a round of evaluations, 47 companies have enrolled in the program, said Penny Martin, communications specialist at the Ohio Department of Development. The surcharge collected a similar annual amount for AEF grants, via a 9-cent monthly fee on all investor-owned utility bills.
Christina O’Keeffe, assistant deputy chief at the Ohio energy office, said the Energy Loan Fund seems to fill a gap in the marketplace.
“Some of our customers cannot get loans from commercial banks because there’s not an understanding of the technology involved,” O’Keeffe said. “When we look, we’re looking at estimated energy savings from a project, and using that as a source to repay the loan.”
Experts Say Coordination is the Key
According to a January report from The Brookings Institution, a public policy think-tank based in Washington, D.C., CEFs exist in more than 20 states, mostly in the Northeast, West Coast and Midwest, generating more than $500 million annually, mostly from utility surcharges.
Programs in Minnesota, Wisconsin, Michigan, Illinois and Ohio will have collectively distributed more than $600 million in assistance by 2017, according the report.
States with clean energy funds, via the Brookings Institution.
Over the last decade, the state funds have invested more than $2.7 billion to support renewable energy markets while leveraging another $9.7 billion in federal and private sector investment, the report states. As a result, $12 billion has gone to more than 72,000 projects in the U.S., including solar and wind installations, hydrokinetic projects in rivers, and biomass generation plants on farms.
But authors of the Brookings report caution that such programs need to better coordinate activities with their respective state and federal economic development agencies, and go beyond per-project financing measures like grants.
Smith said he’s familiar with the Brookings report, and agrees that clean energy and economic development efforts in states work best if they’re merged.
“That’s something we’ve always thought was a good idea,” he said. “It really creates an environment that allows a company, in the future, to pursue job expansion and job creation.”
Cool Savings
For Pierre’s Ice Cream, shifting from grants to loans also seems to make good sense, said Roth, company president.
“We have a very large electrical bill,” she said. “Our goal was to have a new state-of-the-art facility that allows us to grow. And as we grow, the per-gallon, cost-per-unit in electricity will decrease due to what we’ve invested.”
Energy-saving features in Pierre’s new factory include:
- Using the hot and cold air created during the ice-cream making process to heat and cool rooms in other parts of the building;
- Insulated panels to save on energy use;
- Making use of natural light with strategically placed windows and skylights;
- Motion sensors and timers that make sure the lights are on only when rooms are in use;
- Programmable equipment control panels that optimize utility consumption;
- Pumps and equipment controls designed to reduce water consumption and process waste;
- A recycling program for corrugated packaging.
Roth said she’s not sure if her company will take advantage of Ohio’s new clean energy loans in the future, but she encourages other companies to look into ways to save energy.
“I thought what was great about the program was they made us really evaluate all aspects of our energy consumption and our training and our focus,” she said. “They made us quantify things that were eye-opening.”
Jeff Kart is a longtime environmental journalist, blogger and writer in the Great Lakes region, and principal of Enviroprose consulting. He lives in Bay City, Michigan.
Minnesota glassmaker says DOE loan delay didn’t prompt sale
>> Minneapolis Star Tribune
The founder of high-tech window factory in Minnesota is denying a suggestion that two years of government foot-dragging over a promised loan guarantee triggered the company’s sale to a French firm.
Senate bill aims to appraise value of home efficiency
For appraisers, it may not matter how green your house is. (Photo by Sean Marshall via Creative Commons)
Say you were getting ready to put your home on the market and wanted to make a quick investment to boost the selling price.
Would you be better off buying a granite countertop for your kitchen, or an ultra-efficient furnace that would lower heating bills by hundreds of dollars every year?
The answer in almost every case is going to be the granite countertop.
The reason is that appraisers rarely consider energy use when determining a home’s value. Two homes that are identical except for energy efficiency are likely to be appraised for the same amount.
That makes it difficult for home builders and sellers to recoup the cost of efficiency improvements, even when they would clearly benefit buyers.
A coalition of builders, business groups and efficiency advocates is now lobbying to change federal underwriting guidelines so that energy use becomes a factor.
A bipartisan bill called the Sensible Accounting to Value Energy (SAVE) Act was introduced in the U.S. Senate Banking, Housing and Urban Affairs committee in October.
The legislation would require lenders to consider energy costs as well as the mortgage when determining whether a borrower can afford the monthly payments.
For homes with below-average energy costs, appraisers would be instructed to add the net present value of those savings to the appraised value of the home. Savings would be estimated using a U.S. Department of Energy formula, or calculated in an optional, “qualified, independent” energy audit.
The rules would apply to any loans issued, insured, purchased or securitized by the federal government — about 90 percent of all new loans.
Appraisers are allowed to incorporate energy efficiency into home values, but in practice it rarely happens, says Cliff Majersik, executive director of the Institute for Market Transformation, one of the SAVE Act’s main supporters.
Home appraisers need to churn through a lot of work quickly to make a living, and calculating efficiency is something that normally gets skipped over. Plus, appraisers aren’t trained energy auditors.
When a seller seeks a higher price because of efficiency, the lender’s appraisal often won’t cover that premium, leaving it up to the buyer to come up with the difference in cash.
“That’s a real problem” for buyers, who often can’t afford the extra down payment, says Majersik. And for builders and sellers, it creates a disincentive.
“They don’t want to invest in energy efficiency in their homes because they’re worried when they go to sell it they won’t recoup that investment,” he says.
The SAVE Act aims to eliminate that problem. Builders and sellers could be assured that the value of efficiency would be reflected in appraisals, and buyers will be more easily able to qualify for loans.
Jim Petersen, research and development director for Michigan-based Pulte Homes, the nation’s largest home builder by sales, says the SAVE Act could help resolve some of the opposition among builders to energy code updates.
“As the energy codes increase, new homes are on an unlevel playing field with existing homes,” says Petersen. “We have to put in better furnaces, better windows, better insulations, etc., etc., but the current mortgage process gives no value for all of those items.”
Energy code updates have added costs for builders, but it’s a tough sell for builders to convince buyers or their lenders that the added efficiency justifies the higher price, which is why the SAVE Act is needed, says Petersen.
The law would also allow existing home owners to pay for energy projects through refinancing, making it a potential alternative to property assessed clean energy, or PACE, financing in some cases, says Majersik.
The Institute for Market Transformation and the American Council for an Energy Efficient Economy (ACEEE) estimate the act would create 83,000 jobs and $1.1 billion in energy bill savings by 2020.
Other supporters of the legislation include the U.S. Chamber of Commerce, the Leading Builders of America, the Appraisal Institute, and the U.S. Green Building Council.
New LED bulb ‘breathes’ to outshine 100-watt incandescents
>> Cleveland Plain Dealer
GE Lighting’s new 27-watt replacement for the old 100-watt incandescent bulb does something no household light has ever done before — it breathes.
Republican congressman plans to revive GOP light bulb war
>> The Hill
Rep. Michael Burgess (R-Texas) will offer an amendment in coming weeks to Energy Department spending legislation that would block funding for implementation of federal light bulb efficiency standards.
Habitat homes achieve efficiency and affordability
A Habitat for Humanity chapter in North Carolina built this zero-energy house in 2005, thought to be the first of its kind in the state. (Photo by skrobotic via Creative Commons)
Volunteers last year helped East Central Minnesota Habitat for Humanity build one of the state’s most energy-efficient homes.
The 1,100-square-foot ranch-style house in Princeton, Minnesota, includes a solar water heater, exterior insulation, and Energy Star appliances.
Altogether, those and other energy saving features are expected to help the single mother who bought the home save $769 annually on her utility bills.
Across the country, Habitat for Humanity is demonstrating that efficiency and affordability can go together. Its leaders are making the case that a little extra upfront investment in efficiency pays off in the long run.
“We can’t afford not to,” says Molly Berg, sustainable buildings specialist at Habitat for Humanity of Minnesota. “Small changes that we can make up front during the planning and construction process actually result in long-term, large changes in the abilities of a family to meet their basic needs.”
As energy efficiency advocates (including Fresh Energy, which publishes Midwest Energy News) press for tougher energy codes in Minnesota, Illinois and elsewhere, they’re pointing to affordable housing supporters such as Habitat to help make their case.
Bill Fay, executive director of the Energy Efficient Codes Coalition, a program of the Alliance to Save Energy, said he began reaching out to low-income housing groups about five years ago in California.
“I was getting a little tired of the National Association of Home Builders trying to speak for low-income families,” says Fay.
A common argument made by home builders’ associations is that requiring them to build more efficient homes will put ownership out of reach for people with lower incomes.
But many Habitat for Humanity chapters have taken the opposite approach in recent years, putting more money into efficiency even during a severe recession.
All of the homes built since 2008 by Habitat for Humanity St. Louis have been LEED Platinum certified, and one project in 2010 achieve LEED Gold.
In Lansing, Michigan, officials and donors broke ground last week on the first of four green, energy efficient Habitat homes.
And in Iowa City, a chapter is getting ready to build its first net-zero-energy home, which will draw the little energy it needs from solar panels and solar water heaters.
Habitat is made up of scores of independent chapters around the country and world. The organization’s state and national offices support the local chapters, but doesn’t speak for them or set policy.
A survey sent to Minnesota chapters five years ago showed a desire for more resources on sustainable building, which led to a green building conference in 2008 and the hiring of a sustainable building specialist.
Several local chapters were already moving in the same direction, and Berg now helps coordinate training and other support around sustainable building in the state.
All but a few of Minnesota’s 33 chapters have since built homes that meet or exceed Energy Star for homes. The methods and materials being used include installing windows that transfer less heat, covering homes with exterior “blue board” insulation and spacing studs 24 inches apart instead of 16 inches, which creates fewer gaps in wall insulation.
The state office has been tracking Habitat homes’ energy use since the 2009-2010 heating season. The average monthly heating bill has been $110, compared to almost $170 for an average Minnesota home.
“Affiliates have seen the value and the continuous return on investment these things have for families that don’t make as much money a year,” says Berg.
That nearly $60 average monthly wintertime savings has a greater impact for families making 30 percent to 80 percent of median income, the target demographic for Habitat buyers.
There is an added upfront cost, which gets passed on to the home buyer (Habitat sells its homes at-cost with zero-interest loans to families that qualify).
“We have seen a little bit of an uptick [in costs],” says Matt Clark, Habitat’s national director for construction technologies, “but nothing that throws it way out of whack.”
Often its just a couple thousand dollars or less. In the Iowa City the solar and other improvements are expected to add about $15,000 for a home that would otherwise cost about $125,000 to build.
“My guess is that the extra item payback will be [in] 10 to 15 years, but the life of those [additions] will be over 20 years, so there’s actually a net gain there,” Iowa Valley Habitat for Humanity Director Mark Patton told The Daily Iowan.
While many Habitat chapters are deciding efficiency is a worthwhile investment, they’ve been quiet in the arguments over state energy code updates.
For Clark and others in the organization, it’s less a political concern and more a practical one: “It just makes sense for us.”
Future of lighting plays out in Iowa town, global courts
>> Bloomberg
The gold rush for LED makers has also spawned patent lawsuits around the globe over inventions that make lights brighter and more economical.
Cincinnati public schools approve $27M efficiency plan
>> Cincinnati Enquirer
Cincinnati Public Schools board of education Monday approved 5-1 taking out a $26.8 million low-interest loan for energy-saving renovations at 28 schools.
Minnesota builders divided on energy code update
(Photo by kingdafy via Creative Commons)
The home builders association in Minnesota is on the offensive against an updated state energy code currently being considered by state regulators.
The Builders Association of Minnesota claims the set of efficiency-related code changes would add more than $7,000 to the cost of building a typical home in the state.
But some of its members — builders who already use energy saving methods and materials in their construction — say the association is exaggerating the costs.
The rules, known as IECC 2012, would require better insulation, tighter ductwork, and mandatory blower door tests on all new homes. If adopted, they would replace the state’s existing energy code from 2007.
The home builders association held a meeting in St. Paul three weeks ago to outline the problems it foresees for the industry if the code is adopted. Costs will surge, buyers will be priced out of the market, and moisture problems may occur in some homes.
The claims didn’t sound right to Ray Pruban, whose company, Amaris Custom Homes in White Bear Lake, specializes in building highly efficient homes that cost about the same as conventional ones.
“They were mixing some facts with misinformation,” whether on purpose or not, said Pruban.
Pruban later described his concerns in a letter to the editor published in the Duluth News Tribune. Fresh Energy, which also publishes Midwest Energy News, has advocated for the code changes and encouraged Pruban to tell his side.
Meanwhile, six other builders signed an open letter accusing the association of misrepresenting the cost of complying with the code.
“[T]he Builders Association of Minnesota’s publicity machine has been hard at work, and unfortunately they are grossly misrepresenting and confusing issues for a purpose that does not serve Minnesotans or those builders who believe in building responsibly,” the letter said.
Updating the code
Every three years, the International Code Council publishes an updated version of its International Energy Conservation Code, a set of suggested rules for state and local governments to use for encouraging energy efficient home building.
States aren’t required to adopt the rules. Some don’t have energy codes at all and leave it up to local governments to set standards. Others have codes based on IECC versions from 2006 or earlier.
Recent updates to the model code have included significant efficiency improvements. One study determined that a home built to the 2012 code would be 30 percent more efficient compared to the 2009 code.
Those big gains have caused energy-efficiency advocates to campaign for states to adopt newer versions of the code. In every state, they’ve faced strong opposition from state home builders associations.
In Minnesota, the state’s labor and industry department last fall started soliciting feedback from builders, efficiency advocates and other stakeholders about IECC 2012. As in most states, the energy code is changed through an administrative rule-making process rather than going through the legislature.
The Builders Association of Minnesota released materials that claim moving to the 2012 code would create thousands of dollars in new costs as well as durability issues for some homes.
In materials handed out at the association’s event earlier this month, the association says a typical 2,500-square-foot home is going to cost $7,300 more to build under the 2012 rules compared to the state’s existing code. More than $4,600 of that, the association says, would come from meeting new wall insulation requirements.
Numbers challenged
The only way to arrive at that number, Pruban said, is to assume for several worst case scenarios.
“They took the worst of the worst of the worst possibilities,” said Pruban, who suspects the calculation might reflect a misunderstanding of how newer insulating materials are actually used in building projects.
One of the materials called for in the suggested 2012 code is a rigid, exterior insulation. When used correctly, the hard panel insulation allows builders to use less of other materials, such as lumber and plywood, Pruban said.
“It’s not costing us anything,” he said. And in some cases, he’s actually able to save money using the improved insulation.
The counter-claims by individual builders that the association is exaggerating costs are supported by an analysis from the Building Codes Assistance Project (BCAP), funded by the pro-efficiency Alliance to Save Energy.
The BCAP paper projects the cost of complying with the 2012 code will be in the range of $2,700 to $4,000 per home, and that home owners will save between $19,000 and $23,000 in energy costs over a 30-year mortgage.
The builders association wrote a letter to BCAP demanding that it retract its analysis, which it says understates costs and overestimates savings.
The BCAP cost estimate is closer to what builders like Pruban said they have experienced, but even its numbers are on the high end, they said. There does appear to be a flaw in BCAP’s cost savings calculations, however, stemming from the fact it compared energy use to a national average, Pruban said. Minnesota homes are already far more efficient than the national average, meaning actual savings would be less.
An honest dialogue?
Michael Anschel, owner and principal of Otogawa-Anschel Design Build in Minneapolis, thinks the builders association’s opposition is more about politics than good policy.
“I think the association is looking to show its members that it’s fighting government and fighting regulation,” Anschel said.
In this case, though, Anschel believes regulation will be beneficial. Most of what’s in the code are things responsible builders already do, such as making sure duct work is sealed. Making them requirements will level the playing field so they don’t have to compete will cheap, corner-cutting contractors.
Anschel, who wrote the critical letter signed by himself and five other builders, also thinks the association is using one flaw in the code as a red herring to attack the entire work.
The 2012 code contains a rule that involves insulation coming into contact with basement walls in a way that might cause moisture issues in cold climates. Anschel said everyone involved in the Minnesota process recognizes that it won’t apply here and needs to be amended, but the association continues to attack it.
In an interview Wednesday, Pam Perri, executive vice president of the Builders Association of Minnesota, focused at length on the basement insulation flaw and said she was frustrated with criticism from builders like Anschel.
“We’re the only ones doing their homework,” Perri said. “It’s our job to be detail-oriented. We can’t afford to not pay attention to what the details of the code say.”
But builders are a diverse group with different opinions, Anschel said. While the association does good work on many issues, this is one where he believes the association is acting on its own and not representative of its members.
Pruban said he’s requested a more detailed breakdown of how the association arrived at its cost projections, but so far he hasn’t received them. He said he’s disappointed his industry has decided to defend the status quo rather than push for better quality homes for Minnesotans.
While he believes the association is being disingenuous with some of its cost projections, he also says some environmentalists seem willing to push for efficiency gains at any cost.
“I do believe there’s a middle ground here that does make sense,” Pruban said. “I just think let’s at least get the right facts on the table so there can be an honest dialogue.”
Milwaukee program helps boost efficiency retrofits
Cross-posted from EarthTechling with permission
By Susan DeFreitas
Milwaukee, one of the greenest cities in the country? Scoff all you want, Left Coasters, but the city has announced that it will be leveraging funds it received through the American Recovery and Reinvestment Act to provide up to $60 million in enhanced private-sector financing for building owners to pursue energy-efficient retrofits and renovations.
The program, known as the Me2 Clean Energy Financing Program, works to connect property owners with energy contractors and private lenders, eliminating those upfront costs that keep so many of those who’d like to make energy efficient improvements from pursuing them. As with other such financing programs we’ve seen (for instance, in Louisiana), costs are then recouped via the savings that result from reduced energy use.
The program has secured a high-profile partner in Johnson Controls, which brings extensive experience in building efficiency upgrades to the table, having led or participated in numerous retrofit projects around the world, including the Empire State ReBuilding project expected to decrease the iconic New York City highrise’s energy bills by 38 percent and save $4.4 million per year.
The first Me2 project has already launched at The Newport, a co-op project located at 1620 N. Prospect Avenue in Milwaukee, where Johnson Controls is implementing the removal of existing heating, ventilating and air conditioning systems and replacing them with more energy-efficient equipment. A new building automation system will also be installed to control the HVAC equipment that serves the building.
The overall goals of the Me2 program—which, it has been emphasized, is conducted entirely without the aid of local public funds—are to reduce pollution, create hundreds of private-sector green jobs in the area, reduce energy bills and improve the commercial buildings and houses in Milwaukee. More about the program is available online.
