Energy efficiency improvements could be sped up if efficiency were “treated as a tradable resource, spurring business model innovation and private investment,” argued Matt Golden, principal of efficiency.org, in a post on Greentech Media earlier this week.
“With well over 100 million existing buildings in the United States to retrofit, energy efficiency needs all hands on deck, rather than a top-down approach. There is no single right answer to driving consumer demand, nor one perfect retrofit model, business model, or financial product that can be applied to every building or owner,” he writes.
“Scale in energy efficiency will come from aligned interests and a marketplace competing to fill many baskets with valuable savings.”
Golden points to the “explosive growth” of solar as an example of what efficiency could achieve.
“When it comes to keeping the lights on and reducing emissions, ‘negawatts’ of energy efficiency are every bit as valuable and significantly cheaper than generating energy. However, unlike power generation, energy efficiency lacks markets that value energy savings as a resource—equivalent to power plants being paid for the energy they produce,” he argues.
“Power generators finance their investments based on future cash flows from selling energy, also known as project finance. If energy efficiency is going to play its part in the new utility paradigm, it’s time we start financing it like an energy infrastructure investment.”