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Republican senators who want energy efficiency programs in the next COVID-19 relief bill can choose from plenty in a Democratic plan

image credit: ID 110988527 © Melpomenem | Dreamstime.com

Seven Republican U.S. senators recently wrote Senate Majority Leader Mitch McConnell a letter urging the coal-lovin’ Kentuckian to consider policies meant to boost clean energy innovation and employment in the next COVID-19 relief package. Sectors and technologies they mentioned in the letter included renewables, nuclear, carbon capture, energy efficiency, advanced transportation and energy storage.

If the GOP senators don’t mind cribbing from their colleagues on the other side of the aisle, they can easily come up with some policies meant to give energy efficiency a boost. “Solving the Climate Crisis,” the plan to combat climate change that was released by the Democrats’ House Select Committee on the Climate Crisis on June 30, contains plenty of them. (“The Biden Plan to Build a Modern, Sustainable Infrastructure and an Equitable Clean Energy Future” also has energy efficiency policy suggestions, most notably upgrading 4 million commercial buildings and weatherizing 2 million homes over four years, but I suspect borrowing from it would be a bridge too far for even the one of the seven senators most fearful of posting an election loss in November, or whenever the ballots finally get counted.)

The policy that appealed the most to me was detailed in the subsection of the report titled, “Building Block: Help Farmers Make Energy Efficiency Improvements and Reduce On-Farm Fuel Use,” which recommends significantly increasing funding for the Department of Agriculture’s Rural Energy for America Program, or REAP. The program provides grants and loans to farmers and rural businesses for energy efficiency improvements and renewable energy systems, as well as grants to state and local governments, land-grant universities, rural electric cooperatives, and public utilities to assist farmers and rural businesses with energy audits. A bill introduced last year by Rep. Deb Haaland (D-NM) and Sen. Cory Booker (D-NJ) would increase its annual funding from $50 million to $3 billion by 2024. I liked the policy, however, not because of its substance, but because it would enable the question posed by the World War I song “How Ya Gonna Keep ‘Em Down on the Farm After They’ve Seen Paree?” to be answered by, “Lure ‘em back with energy efficiency!”

While that policy was included in the section of the report entitled, “Invest in American Agriculture for Climate Solutions,” most of the policies dealing with energy efficiency are in the report’s first section of recommendations, which is called, “Invest in Infrastructure to Build a Just, Equitable and Resilient Clean Energy Economy.” That section’s “Maximize Energy Efficiency” subsection has three “Building Blocks,” while its “Reduce Energy Use in New and Existing Buildings” subsection has 14 “Building Blocks.”

The first "Building Block" for boosting energy efficiency in the “Maximize Energy Efficiency” subsection recommends that Congress set national energy efficiency targets “based on the maximum achievable level of cost-effective energy efficiency potential,” with the term “cost-effective” defined in a way that “include[s] the costs that greenhouse gas pollution imposes on society.”

The second “Building Block” is “Congress should reauthorize and increase funding for the Energy Efficiency and Conservation Block Grant Program.” Established by 2007 legislation and funded by the American Recovery and Reinvestment Act in 2009, the program generated lifetime cost savings of $5.2 billion and created 63,000 jobs, according to an evaluation of it prepared for the Department of Energy in 2015.

The subsection’s last “Building Block” involves “the energy-water nexus,” which refers to the fact that generating electricity from fossil or nuclear fuels uses lots of water while treating and delivering drinking water requires lots of energy. It recommends that Congress establish “a Water Efficiency and Conservation Block Grant Program to provide funding for states, local governments, tribes, territories, and water districts to use innovative strategies focused on the energy-water nexus” and “require federal science agencies to incorporate energy-water nexus considerations in all relevant research activities.”

The “Reduce Energy Use in New and Existing Buildings” subsection begins by saying: “Several factors converge to slow deployment of energy-efficient technologies, including the upfront cost of investing in energy efficiency improvements, split incentives for owners and renters, and the undervaluing of energy efficiency in energy pricing and utility rate design.” To overcome those factors, it says, “local, state, and federal policies need to work together to unlock the environmental and economic potential of energy efficiency retrofits and energy-efficient new construction.”

On the federal level, the subsection envisions using tax incentives to get homeowners and commercial building owners to invest in energy efficiency improvements and to get builders of residential and commercial properties to make them energy efficient from the get-go. Specifically, it recommends that Congress extend and update the Section 25C tax credit for homeowner investments in energy efficiency improvements; extend and update the Section 179D tax deduction for commercial investments in energy efficiency improvements; extend the Section 45L tax credit for new, energy-efficient homes and update the energy efficiency requirements to receive the credit; extend the combined heat and power tax credit, establish a tax credit for installing mechanical insulation and provide direct pay options for both; and create tax credits for the construction of new net-zero energy homes and commercial buildings that phase out once a significant portion of new homes and buildings achieve net-zero emissions.

The subsection also has recommendations involving incentives other than taxes. Two for present and would-be homeowners are that Congress should establish federal rebates for homeowners who have energy efficiency retrofits done on their residences and fund programs to train workers to perform the retrofits; and enable home buyers to leverage energy efficiency investments to increase the size of the mortgage they can get. A third would incentivize states, local governments, tribes and territories to adopt the most updated residential and commercial building energy codes, with the goal of having them all adopt net-zero-emission codes by 2030.

Three of the subsection’s “Building Blocks” involve establishing standards or benchmarks. One recommends that Congress direct the Environmental Protection Agency and Department of Energy to establish an energy benchmarking and transparency requirement for all commercial buildings, study the feasibility and effectiveness of an energy benchmarking and transparency requirement for residential buildings, and recommend which federal policies or incentives, if any, should be implemented to better provide home energy and emissions information to consumers. Another recommends that Congress direct DOE to analyze the effectiveness of existing building performance standards, create a model building energy and emissions standard for local jurisdictions to adopt, and advance the adoption of performance-based codes in future model code deliberations. And the third recommends that Congress pass legislation to codify the energy efficiency standards for appliances and equipment that the Trump administration has delayed implementing or attempted to weaken and direct DOE to set additional standards based on energy and emissions reduction potential.

Two “Building Blocks” contain recommendations involving research. One says Congress should direct DOE to survey privately owned commercial and residential smart buildings; develop smart building accelerators to facilitate the deployment of smart building technologies; establish a grant program for demonstrating smart energy and water efficiency technologies; and direct DOE and the General Services Administration to implement smart building technology in federal buildings. The other says Congress should provide “robust funding” for DOE to ramp up research in and development of advanced building technologies.

Technology plays a factor in the recommendations in two other “Building Blocks.” One calls for Congress to expand urban and rural broadband infrastructure, which would open the door to enabling more buildings to be equipped with smart thermostats and energy management systems. The other says Congress should establish standards and incentives for states to adopt programs that give power customers access to their own usage data and consider funding grant programs for the creation of mobile phone apps that can provide them with that data, as well as more general information about the electric grid. 

And in the direct funding area, one “Building Block” recommends creating a Department of Energy grant program to enable small businesses to make cost-saving energy efficiency upgrades, saying that the program should leverage existing utility demand side management programs, as well as other third-party programs, to cover the small businesses’ share of the upgrades.

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