Managing Energy Efficiency: Translating Policy into Action
By Hayley Martinez
There is no question that our dependence on energy is enormous, and that reliance has grown quickly due to rapid population growth and the expanding use of technology and devices that are ever more energy-intensive. This won’t change. Global energy consumption has and will continue to increase, so providing clean, affordable and reliable energy is one of the greatest challenges we face.
Fortunately, there is ample opportunity for improvement in energy efficiency. It seems logical that conserving energy is good for everyone: reducing carbon pollution is good for the environment, and conserving resources makes financial sense. Yet, getting customers to participate in cost-saving, energy-efficient programs is not as straightforward as one might think.
To examine this issue further, on March 13, the Earth Institute co-hosted, with the Center on Global Energy Policy, a panel event with energy experts from New York, New Jersey and Connecticut (and across public and private sectors), who discussed energy efficiency and what needs to happen to encourage people to take part in these programs.
Our panelists, who provided diverse perspectives in the energy sector, included Elizabeth Ackerman, director of economic development and energy policy at the New Jersey Board of Public Utilities; Ron Araujo, the manager of the Connecticut Energy Efficiency Implementation department at Northeast Utilities; Frank Evans, regional vice president for Willdan Energy Solutions Northeastern Region; Richard Kauffman, chairman of the New York State Energy Research and Development Authority and chairman of energy and finance for New York; and Steve Cohen, executive director of the Earth Institute, who moderated the discussion.
The panelists recognized that energy efficiency is an industry still in its infancy, but that it’s an exciting time to get involved. They discussed the best methods to encourage customers to participate in energy efficiency projects. Elizabeth Ackerman noted that behavior change is key to making progress in energy efficiency, and that community engagement and public awareness must be made a priority to encourage that change, a statement that received unanimous nods of agreement by the rest of the panel.
The panelists also acknowledged the problem that even though there are vast opportunities for energy efficiency in the commercial space, there are a number of challenges that deter participation. One major challenge is the disconnect between who pays for capital-intensive projects and who receives the benefit. For example, building owners often pay the upfront costs of energy system retrofits, but the tenants receive the benefit of reduced electricity costs. In this structure, there is no direct incentive for owners to invest in energy efficiency.
Financing mechanisms such as on-bill financing and property assessed clean energy are starting to become part of the solution. Another challenge is that savings are often not realized immediately, and it’s hard to get people to spend more money to get less of something. To get over this hurdle, the panelists pointed out that we need to make energy efficiency and energy savings more tangible.
The need for consistency was also brought up, as panelists noted that consumers and investors can’t rely on government programs that start and stop and start again. We need to send a strong message that the money will not go away; a message that energy efficiency is a priority for state governments. Ron Araujo also stressed the importance of making energy efficiency measurable and demonstrable, with incentives and programs that are performance-based.
As panelist Richard Kauffman put it, energy efficiency is often seen as low-hanging fruit, but we still have a long way to go. The public and private sectors must work together to design, communicate and implement effective programs that serve to correct market failure and change behaviors in the long-term.
Hayley Martinez is program coordinator in the Executive Director’s Office of the Earth Institute.