Green Carrot Incentivizes More Efficient Buildings; Will Owners and Utilities Bite?

Felicity Barringer looks at an innovative program being tested in Seattle to incentivize commercial property owners to undertake major energy efficiency retrofits. A partnership between skeptical building owners, investors, and utilities is key.
June 20, 2013, 5am PDT | Jonathan Nettler | @nettsj
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As Barringer explains, 'deep retrofits' are a hard sell to the owners of older, smaller commercial buildings, "which, according to a new report [PDF], account for 47 percent of all commercial real estate outside the world of malls."

"In a new twist, some investors, a technology company, a municipal utility and an environmentally oriented foundation have joined forces to show that major energy-efficiency improvements in commercial buildings may provide alluring new revenue to all involved."

"The basic plan intends to ensure that utilities lose none of the revenue that supports their fixed costs — wires and other infrastructure — while allowing them access to a new power source," she explains. "The energy not used by Bullitt or any other building is purchased by the utility in a 30-year contract, just as if they were purchasing hydropower or coal-fired electricity."

"The utility was not easy to convince," she adds. "As 'Disruptive Challenges,' a recent report [PDF] from the Edison Electric Institute shows, the industry is getting increasingly nervous about its long-term ability to finance its infrastructure costs in a new world of efficiency and renewable energy."

"As Jorge Carrasco, the superintendent of Seattle City Light, explained it, any utility executive must think 'about what does this new approach do from a financial standpoint to an entity that makes its living by selling energy?'"

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Published on Tuesday, June 18, 2013 in The New York Times
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