A recent decision by New Jersey utility regulators to standardize energy efficiency procedures for commercial buildings could have a major impact – not just on the Garden State – but on energy markets nationwide.
The reason: It gives investors more confidence in performance and returns which is exactly what can fuel a big push to make buildings across the United States more efficient. It might eventually transform our energy efficiency market into an economic power house.
Giving investors peace of mind
Energy efficiency is an untapped opportunity of enormous proportions. An estimated $279 billion could be invested in residential, institutional and commercial sector retrofits – with the latter holding the largest potential.
Enter Environmental Defense Fund’s Investor Confidence Project, which provides tools to help investors assess risk more accurately.
Through rigorous measurement and verification metrics, and by standardizing the way projects are developed and brought to market, the initiative brings better financial and environmental results. By reassuring developers, building owners and investors, it can fill the gap between a proposed energy efficiency project and the ability to finance it.
New Jersey is the first state in the nation to incorporate ICP protocols into an existing state energy efficiency program for commercial buildings, and we hope to deploy this model nationwide.
Saving potential: $1 trillion over 10 years
Taken as a whole, the energy efficiency market in the U.S. could yield more than $1 trillion in energy savings and 3.3 million new jobs over 10 years, a 2012 Deutsche Bank and Rockefeller Foundation study found.
Buildings use 40 percent of all energy consumed in the U.S. today. If we fully take advantage of the technology and know-how that exists today, building owners could thus save billions of dollars in combined annual energy costs.
Such opportunities multiply in other ways. Carbon emissions and other pollution decrease when we use less electricity – two-thirds of which is still supplied by fossil fuel sources in the U.S.
And as the market for building energy efficiency grows and investors leverage this opportunity, more jobs are created and real estate values increase.
Energy efficiency in demand
Long a clean energy pioneer, New Jersey can serve as a model for other states. So far, 12 development companies have undergone training in the state to participate on a voluntary basis in the ICP program, of which four have been certified.
Initial projects where ICP was implemented have also been launched in New York, California, Connecticut and Texas; and Europe joined the effort after the European Commission officially adopted the protocols earlier this month.
Once the building retrofit standards are adopted as part of state programs across the country, we can bring energy efficiency to market on a large scale – in the U.S. and overseas.