Sustainability Juxtaposition - Industry Drives GHG / Gov Drives EERE

The perspective of energy and environment in the US is: one half green house gas emissions [GHG/Cap-n-Trade] and the other half energy industry [EERE]. While the private industry is unable to act on the potential added cost of carbon dioxide emission due to an unknown policy climate they are able to respond to the demands of their biggest customer [Walmart et al] - to reduce GHG and social ill will [Sustainability Scorecard]. Why? Because pursuing sustainability saves money! ...and builds a green conscious brand. Obviously, thru a consumer product lens, there is a win win in pursuing environmental impact reduction: $ and $. And although our politicians are incapable of acting as a body, and therefore signaling the entire market to do nothing, some very large entities have stepped forward to lead the way through the almighty dollar and free market economics. While we applaud this new found religion of cost savings through sustainability we must also highlight the return of corporate social responsibility [CSR]. "Its good business" say CEOs, and that's because it represents the social aspect of triple bottom line - both customers and employees.

What is interesting is the tie of sustainability to energy. Most of these sustainability actions are energy savings which garner additional capital expenditure ROI with federal, state, and local EERE incentives... which are the result of citizen demand. The government has been unable to put in place appropriate carbon emission costs to society so instead we are spending our citizenries money to fund these energy reduction actions in the private sector... at least fund a good portion. Of the $767B American Recovery and Reinvestment Act $61B is targeted at energy ($21B in tax incentives); DOE's $32B pot has only spent $7B and will continue to allocate $1B/mo through 2011. http://www.gao.gov/recovery/ There is still much support for energy waste reduction to hit the streets, and then make its way to actually paying for projects over the ensuing two year period. New industries need big support early (unlike Cash for Clunkers, auto bail out, and Wall Street handout) and of course still needs additional appropriate policy to get the long lasting effect we're all looking for.

The point is that although we all thought that Govt would would see GHG at large and industry would see $ at home, when industry reads the Tarot cards and acts along with a supporting governmental acting on behalf of society (the Executive branch anyway but no reason that shouldn't be the Legislative branch!) we have the combined incentives to move in the right direction. Lest not forget that we the people continue to fund the transition, through all mighty democracy: social economics US style!

Now just imagine if the finance arm hadn't played us all during the Neocon political era of this last decade - we'd have that fourth branch of government [Walstreet] fully in play on the New Energy Economy (and that's expansion market capitalism).

Solar Electric (PV) Is Not The First Thing To Do

Solar electricity? Solar hot water? Wind? Weatherization? Efficient lights? Day lighting? Electric conditioning? Automated control? Heating? Geothermal?

If you are going to spend your money to make an impact on your energy use what is the best thing to do? Its a big question but it really comes down to "what have you already done"? It makes the most sense to work on efficiency first, that way you use less [fossil fuel] and need a smaller amount of renewable energy as offset. However, utilizing the various local, state, and federal incentives is important so that may be the driving decision. We also need to recognize easiest to implement. But hey, if its PV panels you want on your roof, as ego boo, then have at it. We love distributed generation. Just remember, it doesn't stop there and the real question is: what is your per capita energy profile? You may be higher than others, or lower, but as long as you are lower than you were a year ago that's all I ask.

I'll followup this post with a rules of thumb perspective, e.g.for $20k of each type energy project what is my impact?

The new IBMs of the world - ESCOs.

Amory Lovin's book back in the 90s -Natural Capitalism- exposed us all to the concept of the "negawatt", the inherent power in the energy never used. That in and of itself is a powerful concept. Once you begin to realize that the energy problem isn't about where it comes from, rather its about how its used, then its a fairly quick leap to understand that energy conservation can guide entirely different designs and break the mold of legacy configuration. Today, this is figurative for legacy thinking -renewable energy may be the long term goal, but the quickest path to energy independence, and to a high ratio of renewable energy is through a systems thinking framework. Simply put: if you consume less then you need to produce less and the alternative source ratio increases.

Energy efficiency is finally in vogue, largely supported through the Federal AARA stimulus but this use of public funds is by far and away going to make a much much bigger impact than electric vehicles or intelligent electric grid, both in psychology and in market opportunity. Interesting is that energy efficiency is driving renewables as well. Retrofits to alternative energy sources go hand in hand with conservation, or tuning the system first.

So who stands to capitalize on this shift? ESCOs. Energy services companies are the new IBMs and HPs of the world! Just look at the market opportunity - every commercial building and every mid to large organization (enterprise) will need to retool so to speak. Its like the era when ERP software became needed in order to run your business, but its bigger than that! So who will guide your organization and where to look and what to implement? Who will serve this new market opportunity? Comprehensive energy solutions that's who. We're not talking about GHG accounting, where talking about kW accounting which is easily seen directly in dollar impact -ROI, IRR, Payback, Lifetime Cumulative Cashflow. And guess what? You can measure this with our traditional accounting systems! Which means easy decisions and justifiable spends.

Supplement post will cover which ESCOs to be watching - AMERESCO is even going IPO this year.