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My organization, the Carbon War Room, has put together a consortium to tackle, as was reported in the New York Times this week, “one of the nation’s biggest energy problems — waste in older buildings — without new money from Washington.”
With the consortium, we’re also tackling another case of waste: developed technologies that are not being deployed. Business can halve the world’s emissions using current technology, acting within existing policy frameworks, and despite the global economic slowdown.
In fact, this emissions challenge is the largest wealth-creation opportunity on the planet. There are technologies that exist today that can solve our energy issues that could be scaled much faster. This new business consortium is an example.
The new consortium
As reported, the business consortium, led by the Ygrene Energy Fund of Santa Rosa, Calif., will unlock millions of dollars of investment in renewable energy and energy efficiency technologies for U.S. commercial real estate.
Lockheed Martin and Barclays bank plans to invest as much as $650 million over the next few years to cut energy consumption of older buildings in Miami and Sacramento, Calif. We are confident these cities’ programs alone could stimulate $2.3 billion and more than 17,000 jobs across the two cities.
Imagine if this is carried over to Cleveland, Detroit, Pittsburgh, Boston, St. Louis and every city in the U.S. There are probably a trillion dollars that can be invested, which will drive jobs now.
In this case, while we have technologies sitting on the sidelines to make our buildings more efficient, we also have legislation that is not being fully deployed.
Wasted legislation, tech
The Property Assessed Clean Energy (PACE) legislation enables property owners to accept a voluntary tax assessment as a means of repaying up-front financing of energy efficiency and renewable energy improvements. Twenty-six states in the United States, along with Australia and New Zealand, have enacted legislation enabling the secure and scalable financing PACE structure. PACE has yet to take off in the U.S. for homes because of uncertainties in the financing of the program from Freddie Mac and Fannie Mae. But the commercial side, now solidly financed, can take off.
The key motivator behind PACE is a sound one: There’s “no up-front capital cost.” No up-front capital cost was a key in unlocking the deployment of solar when, at SunEdison, I created the power purchase agreement for the solar industry. It enabled companies like Wal-Mart, Staples and Whole Foods to buy energy rather than buying a solar system. They pay for the energy used over time. It made solar make business sense.
When I tell most people about this new program, the immediate reaction is, “Well that’s a no-brainer.” But simple, obvious, powerful, business-sense solutions take brains. It then becomes a “no-brainer decision” for buyers creating $500 billion industries.
Jigar Shah is the CEO of the Carbon War Room, a nonprofit that harnesses the power of entrepreneurs to implement market-driven solutions to climate change and create a post-carbon economy. By bringing project finance and growth capital together with infrastructure entrepreneurs, corporations, governments and nongovernmental organizations (NGOs), he identifies and eliminates market barriers, driving environmental improvements alongside economic growth. Shah founded SunEdison in 2003 with a new business model, the solar power services agreement business (SPSA). The SPSA uses mature technologies and required no new legislative action. The SPSA model launched solar services into a multibillion dollar industry. SunEdison now has more solar energy systems and megawatts under management than any other company.
Image courtesy of JoeInSouthernCA