This very timely article discusses residential energy efficiency initiatives and really goes to show how mainstream some of these ideas are becoming. The three main take-aways from this should be:
1) Energy upgrades have a 10-to-1 multiplier effect when it comes to home values. People need more education to understand how well prioritized efficiency measures are an investment, not a cost
2) There are a a number of approaches to address market failures and incentivize energy efficiency, but there is no magic bullet. Every type of building and every community will have different strengths, weaknesses, and priorities that must be taken into account when crafting strategies and solutions that meet their needs within the confines of their local economic and political realities.
3) Banks and other private finance organizations have an incentive to get involved, but need more experience and familiarity with the investments before they will get fully involved
The bottom line of energy efficiency is to create value by increasing the economic/physical, social, and environmental sustainability of a property. However, a number of market failures, including education, financial, and technical issues are still inhibiting broad action. To solve these problems, there are a number of approaches being experimented with across the country. They include Propert Assessed Clean Energy (PACE), rebate programs like Home Star, Green Bank initiatives, tax incentives, loan guarantees, and grants. States, counties, and municipalities across the country are considering their options and beginning to implements strategies. The problem is communicating these often complex initiative to homeowners, policy makers, and financial institutions in a way that clearly identifies the market failure and how these can solve the problem.
Ultimately, any strategy to stimulate residential energy efficiency should accomplish the same fundamental goal: to save more money than it costs. Underlying all of these programs are homeowners, so we need to start there. On one end of the spectrum are people who want to save from day one, and at the other end of the spectrum are people that are willing to make longer-term investments that may not provide immediate benefit, but will be over loan/improvements lifecycle. Most homeowners are going to fall somewhere in the middle, but regardless of where your preference fall on the continuum, the bottom line should always eventually be satisfied.
The next problem is that homeowners rarely have the time or expertise to needed to ensure they are making the best decisions. In the commercial real estate market, project developers will provide turnkey services for a fee, but residential real estate's relatively small scale projects are rarely worth a developer's time. The best way to solve the 'business case' problem for developers who want to break into residential energy efficiency services is to aggregate homeowners into groups.
One way to aggregate homeowner is in a cooperative model where neighbors voluntary come together to pool their collective buying power for mutual benefit. While there are existing examples, particularly with renewables like solar, it is still untested for energy efficiency services and is not without an organizational burden.
The other way to aggregate homeowners is through property management companies. These organizations are arguably the most naturally inclines and able to develop larger-scale residential efficiency projects. One particular type of organization are the companies that focus on the management of common ownership communities such as HOAs, condos, and coops. Their mission is to maintain the collective property value of a community or building on behalf of the owners. In essence, their job is to serve as a community's agent for ensure the physical and economic sustainability of property.
Based on the ability of association management companies to aggregate large groups of homeowners, they can develop larger projects that take advantage of the economies of scale. Aside from providing time and expertise, these companies can consolidate buying power to provide home energy auditing, lending, and contracted services at prices more competitive than the homeowner would otherwise be able to obtain alone on the open market.
Ultimately, providing these turnkey services should be a win for everyone involved:
-Homeowners save money on their bills and increase the value of their property and its comfort
-Banks can offer lending to make investments in local communities that creates real value and strengthens the financial positions of their customers
-Property management companies find a new way to advocate for homeowners, servicing their physical and economic sustainability by addressing their environmental sustainability
-Services provides see increased demand for their work, creating green jobs and economic development
-We all share in the collective savings of a better environment.
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http://www.slate.com/id/2249412
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