Energy Efficiency, the Nerdy Brother of Renewables

Elisa Wood
April 18, 2011 | 7 Comments

The renewable energy business has done a remarkable job at positioning itself in the public psyche as the ‘it girl’ of our era. Just about everyone – politicians, celebrities, major industries – likes to be seen as pro-renewable.

But if renewable energy is the girl that everyone wants to be photographed near, energy efficiency is her nerdy tag-along little brother. Ever notice how when politicians say they support renewable energy they quickly throw in the words “and energy efficiency” as if it were a babysitting obligation?

Or consider the excitement with which homeowners talk about their recently installed rooftop solar panels. Does anyone wax on like that about new wall insulation? Let’s be honest, renewable energy is colorful, green to be exact. Energy efficiency, well, it’s “smart” energy.

What’s it going to take for energy efficiency to shed its big glasses and pencil pocket protector?

“Let’s face it; we’re selling to the lunatic fringe of green, the lunatic fringe of efficiency. The market is this small strata right now. And of course we want to grow the market outside of the small strata,” said Paul Holland of Foundation Capital, when he spoke recently at the ACI Home Energy Summit in San Francisco, Calif. “We need less kumbaya in this industry and less expectation. We preach to each other, when we really need to become better marketers.”

Speaking at the same conference, Sheeraz Hiji, CEO of Cleantech Group, pointed out that part of the problem is dollars and cents. The solar industry wisely has figured out how to make it very easy for homeowners to finance solar panels on homes. The energy efficiency industry has not been as successful.

“The key of unlocking the industry is in the financing. Consumers don’t care that much. You have to lower the transaction cost. Some of the companies in the solar side have done this very well. They’ve made it very easy. If anyone is doing that in the home energy retrofit industry, they need to stand up on the table and scream about it,” Hiji said. (Please feel free to do your screaming in the comments section of this blog.)

It’s not that energy efficiency doesn’t have its bragging rights; it’s just not so good – yet – about getting them out. But at the conference, attended by 2,000 people, speakers offered some good makeover material.

For example, Gavin Newsom, California’s Lieutenant Governor, provided the following about investing in various energy resources.

$1 billion in coal = 870 jobs.
$1 billion in a nuclear plant = 1,500 jobs
$1 billion in solar energy= 1,900 jobs
$1 billion in wind energy= 3,300 jobs
$1 billion in energy efficiency retrofits =7,000 jobs.

“Energy efficiency is a no brainer,” Newsom said. “We need to start talking about it more.”

Steve Cowell, chairman and CEO of Conservation Services Group, noted that in 2003 to 2005, energy costs accounted for 3.5% of US median household income in the United States and by 2007 to 2008 it had risen to 8.5%. What does that mean to the average household? A 12% drop in pre-tax income and 15% post tax. You took a pay cut without knowing it. By using less energy you can get some of your paycheck back.

More details about this and other discussions at the ACI Home Energy Summit are available here.

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

7 Comments

Patrick O'Leary
April 22, 2011

HJ,

Your point is well taken, but only a few steer clear of the herd. Commercial success is based on the default option.

But a small number of people will take a hard look and make what is represented as the hard choice, i.e. the smart one.

paul early
April 22, 2011

I get quite depressed at the constant linking of payback with energy efficiency measures other than as a guide to best direction of resources. Energy efficiency can often be related to improvement in quality of life (how do you monetise that?)and cost reduction of new renewable plant required due to demand reduction. As an example, we spent quite a bit (5% of house value funding local jobs)internally and externally insulating our 1870 house. We now have a very thermally comfortable house, unlike our neighbours, and have reduced the heat input required to the point that we can heat the house using a 5kw wood stove or from a couple of hours of gas central heating, hence some degree of energy security. Quality of life is up! I meet plenty of people that will spend as much on a gas guzzler without giving payback a passing glance.

I agree that a sticking point for many people will be the financing, and there is no doubt that this is a challenge. The conundrum to me is how to encourage people to be able finance energy efficiency and appreciate it for quality of life improvement, whilst not making a financial benefit (as per feed-in tariff) that can simply be spent on more consumer goods and hence more emissions.

Thomas M
April 21, 2011

Maybe we should start listening to the nerd. We also have to teach that energy efficiency starts with the user. Brainwashing them to turn off the lights when you leave a room should work the same way as "they" use brainwashing to get them accept other forms of ideas and ideals.

William Fitch
April 20, 2011

Hi #5:
Ah yes, the low fruit, you mean Tetrodotoxin, Arsenic and Cyanide.

The idea of Left and Right when overlayed on destroying the very place we live is funny isn't it.
Here we have someone calling people who want to live in a sustainable way with the planet being called far left, abnormal or wacky if you wish...LOL...

I think a more logical way to view living in your "home", is that the way you live should be defined by the least damaging and the most sustainable paradigm to promote harmony and longevity.
That occupies origin (0,0). Anything else that deviates from that position is what is abnormal and wacky, be it right, left, up or down.....

Wake up 5.....

.....Bill

Mike Edwards
April 20, 2011

I hear the music and the bias. Energy efficiency has been around since man lived in caves on a sunny cliff! What is funny is how one pro green space touts solar growth in Italy as they announce they will follow Germany, Spain and other in Europe by cutting
feed in tariffs. People are beginning to realize subsides are another way to say tax by Government. Th US green left is facing the headwind and not with turbines. It makes sense to grab the low hanging fruit first. Nuclear, coal and gas first.

Patrick O'Leary
April 20, 2011

In the bigger picture, lower energy costs (for businesses) translates into higher margins. Of course that requires hard headed decisions better suited to individual business owners than to corporate beaurocracies.

Still, where does America go from here? and how do we get there? The remaining resource to be explointed is our own energy inefficiency, the flip side of which is our OPEC bill.

William Fitch
April 18, 2011

Hi:

To me, talking about EE as fringe is very funny. It is load that determines energy need. No load, No need.
Its like saying the interest rate you pay on a loan has nothing to do with your monthly payment....LOL...

But hey, that's just me.....

.....Bill

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Elisa Wood

Elisa Wood is a long-time energy writer whose work appears in many of the industry's top magazines and newsletters. Her blog on energy efficiency appears on more than 100 sites and has been picked up by the New York Times and Reuters. She...