Data Points: Energy Efficiency

Energy efficiency is one of the tools in The New Apollo Program toolbox that will create a clean energy, good jobs economy.  And it’s a big tool, one that offers great opportunity.  By 2035, three-quarters of U.S. buildings will be either new or substantially renovated.  And energy efficiency pays for itself with energy savings and creates high-quality jobs.

ENERGY CONSUMPTION

According to the Energy Information Administration, residential and commercial buildings are responsible for 40% of all U.S. energy consumption.

The largest “end-uses” of primary energy in residential buildings in 2005:

– Space heating (32%).
– Air conditioning or space cooling (13%).
– Water heating (13%).
– Lighting (12%).

The largest “end-uses” of primary energy in commercial buildings in 2005:

–  Lighting (27%).
– Space heating (15%).
– Space cooling (14%). 
– Water heating (7%).

These four end uses account for 63% of primary energy consumption.

ENERGY SAVINGS FOR INSTITUTIONS

In larger buildings, the savings that result from energy efficiency upgrades are substantial.  According to a report for the California Sustainable Building Task Force, a 2% increase in upfront building costs to support green design would, on average, result in life cycle savings of 20% of total construction costs — more than ten times the initial investment. This means that, for an initial upfront investment of up to $100,000 to incorporate green building features into a $5 million project would result in a savings of $1 million in today’s dollars over the life of the building.

The first Leadership in Energy and Environmental Design (LEED) certified school recently opened in Maryland.  Though the $17 million cost of constructing the school is steep, district officials have measured a 35% energy savings, which translates to $100,000 saved per year on energy bills.

An analysis of the full array of U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) building energy efficiency programs, including the Weatherization Assistance Program, the State Energy Program, Rebuild America, Energy Efficiency Information Outreach, and Building Codes Training and Assistance, finds that in 2005 an investment of $1.3 billion led to $491 million in energy savings.

A New York City program to retrofit public buildings performed upgrades in 164 buildings in 2003, which has generated $14 million per year in energy savings.

In 2006, $2.6 billion was spent on state-level commercial and residential energy efficiency programs, including approximately $338 million for low-income programs.  This led to a total savings of $35 billion in electricity and $212 million in natural gas, or the equivalent of removing 6.6 million passenger cars from the road for one year.

By mixing combined heat and power technology at power plants, energy efficient building codes, Research, Development & Deployment initiatives, appliance standards, and state and utility rebate programs, Maryland will achieve a 29% reduction in electricity demand by 2025.  In total, approximately $3.4 billion in program spending and a $9.3 billion efficiency investment will displace the need for $3.9 billion in utility investments and lead to a savings of $21 billion to consumers in avoided energy bills between 2008 and 2025.

ENERGY SAVINGS FOR HOUSEHOLDS

The National Energy Assistance Directors Association reports that average winter heating bills for U.S. homeowners in 2007 were $880 for natural gas and electricity customers, and as high as $1,800 for those who use heating oil and propane. For families who already struggle to pay their energy bills, higher prices this season could be detrimental. Energy bills already account for about 14% of a low-income families’ gross income, and for many it may account for 20% or more.

Indeed, the second leading cause of foreclosures for low income homeowners is unanticipated utility bills.

With around $2,500 in energy efficiency upgrades, such as more efficient insulation and lighting, elimination of infiltration and duct leakage, upgraded furnaces and air conditioners, and energy-efficient appliances, the energy consumption of existing residential buildings can be reduced 15% to 30%.

According to the Department of Energy, this set of upgrades can also generate a carbon dioxide reduction of up to 25% and generates a savings of around $360 a year on energy bills.

Such measures pay for themselves through energy savings within 3-5 years.  With the installation of more intensive efficiency measures, costing around $3,700, homeowners can achieve savings on the order of 50-60 percent with a payback from energy savings in 8-10 years, and an approximately 34% carbon reduction. Additionally, savings on energy bills turns into increased spending power, which benefits local communities.

The Department of Energy reports that the Weatherization Assistance Program provides an average of $2,862 in upgrades per home to more than 60,000 families every year.  This supports 8,000 technical jobs in low-income communities performing home improvements.

President Bush signed a continuing resolution that funds most government programs through March 6, 2009, and provides $5.1 billion for the Low Income Home Energy Assistance Program (LIHEAP) in Fiscal Year 2009.  The $5.1 billion is double the FY 2008 level and would fund the program at its fully authorized level.  According to the House Appropriations Committee, the increased funding will allow LIHEAP to serve an additional 2 million households and raise the average grant from $355 to $550. Out of the overall appropriation for LIHEAP, $4.5 billion will be spent on the basic grant program and $590.3 million will be provided as emergency contingency funds, the same level as provided in FY 08. The president signed the measure on September 30.

JOB CREATION

The EERE estimates that an investment of $2.2 billion in building energy efficiency programs would create 23,600 direct jobs by 2010.

American Council for an Energy-Efficient Economy estimates that public and private sector investment in residential and commercial energy efficiency totaled $86 billion in 2004.  This generated 618,000 jobs and $4.6 billion in energy savings.  This equals a total of 14 jobs per million invested in energy efficiency.

The American Solar Energy Society estimates that federal, state, and local governments spent $8.6 billion on energy efficiency in 2006, creating 64,000 direct jobs and 83,000 indirect jobs.   An additional $3.2 billion was invested in renewable energy by federal, state, and local governments 2006, creating 6,900 direct jobs and 8,970 indirect jobs.

It is estimated, in general, that every $1 million spent on energy efficiency retrofits generates about 10 person years of employment in direct installation of efficiency measures and another 3-4 person years in the production of relevant materials.

In its annual evaluation of the New York Energy Smart program, a comprehensive statewide energy efficiency program, the New York State Energy Research and Development Authority (NYSERDA) reports an annual budget in 2007 of $234 million.  NYSERDA estimates that this investment creates or retains 4,700 direct jobs per year and saves 2 million tons of Carbon Dioxide, or the equivalent of removing 400,000 cars from New York roadways.

RESOURCES

American Council for an Energy-Efficient Economy

American Solar Energy Society

Energy Information Administration

National Association of Energy Services Companies

National Energy Assistance Directors Association

United States Green Building Council

U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy

Photo credits:  thingermejig and Brooke Novak, respectively.