In his State of the Union speech, the president posed a challenge to the states: reduce the energy our homes and businesses waste by half over the next 20 years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.
That’s a big goal, but we can do better. We can set a path to reduce the energy consumed by our homes and businesses by half—and we can do it in just 10 years—in a way that saves governments, business, and private citizens billions of dollars. It starts with three simple steps:
Mandating that we make energy usage and efficiency of buildings available to users and purchasers will place the power in the hands of the consumer, much as we’ve done with food labeling. This will drive efficiency because people will be able to see the direct benefits accruing from being efficient. It will spur competition amongst commercial building owners and construction companies in competing for tenants, and it will serve as a value add for tenants who want a lease that will afford them lower energy bills. States have the power to implement building labeling systems within their jurisdictions, and they can implement these systems in the same way that restaurants receive grades for cleanliness, which are prominently displayed in windows of eateries. Progressive cities like New York, Austin, Philadelphia, San Francisco, Seattle, Minneapolis, and Washington, D.C., are already doing this.
We can do a variation of this for homeowners as well. State governments and regulatory bodies should push for energy disclosure statements on residential utility bills, allowing homeowners to understand their energy usage and how it compares to other homes in their neighborhood and region. With this information, homeowners can better understand their energy bill and how to reduce it. A little positive reinforcement for those who do and peer pressure for those who don’t doesn’t hurt either.
Building energy codes are set and enforced at the state level. Creating more efficient homes and buildings at the base requires stronger enforcement of these codes and more ambitious mandates in terms of baseline energy efficiency through new construction and building retrofits. These investments will largely be made by the private sector, and the ROI will be millions of dollars saved that businesses can reinvest elsewhere within their portfolios.
This isn’t just a state problem, though, and it begins with the nation’s number one user of energy: the federal government. The federal government needs to walk the talk on energy efficiency. We’ve made some good progress over the past few years, but the opportunity in government buildings is still immense. Using financial vehicles such as Energy Savings Performance Contracts (ESPCs), cash-strapped building owners in government and education can invest in capital upgrades using no appropriated funds or tax payer dollars. Energy retrofits can easily achieve up to 30 percent energy savings while creating thousands of local jobs. It’s estimated that a typical $10 million ESPC creates about 100 of these jobs.
We as business leaders and government need to play our part, and the time to act is now. The United States currently ranks ninth in energy efficiency among the world’s 12 largest economies. We should all find that unacceptable. With energy efficiency touching some of the most critical issues facing our country, the government has an opportunity to come together on a policy that everyone can stand behind. This is an easy win—save money for taxpayers, create jobs, build a more sustainable future, and work together in a meaningful way. What are we waiting for?