Energy Efficiency Incentives Touted in State of the Union

In his State of the Union address on Wednesday night, President Obama suggested that financial incentives for energy efficiency may be here to stay. Well, at least for the next few years.

As part of a laundry list of ways the U.S. could reduce its energy consumption, he argued that providing rebates and other incentives to people who make concerted efforts to save energy should be a top priority. “To create more clean energy jobs, we need more production, more efficiency, more incentives,” he said.

This would be good news for consumers and business owners. Energy Smart helps businesses lower their energy consumption and save money. And we’ve found that, the more incentives available -- whether they're utility rebates, grants or low-interest loans -- the more likely a business owner will take action and make upgrades. It also can drastically help speed up the payback time by putting money in the business owners' pockets. (Some utility rebates, for instance, cover 40% or more of the energy upgrade’s cost.)

Businesses can take any savings they get from their incentives and their upgrades and invest it in their operations and new jobs. It’s a win for them, and a win for the U.S. economy.

What kind of financial incentives for energy efficiency would you like to see from the federal government?

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Why Green Buildings Make Financial Sense

Sure, it’s not easy being green. But the payoff can be big.

At a recent meeting of the U.S. Green Building Council's Minnesota Chapter, presenters quantified the financial benefits for owners and tenants of “LEED”-certified or Energy Star-labeled building. (LEED – or “Leader in Energy and Environmental Design” – is a certification by the U.S. Green Building Council awarded to buildings that meet a suite of environmental sustainability benchmarks. Energy Star-labeled buildings and plants are certified by the U.S. Environmental Protection Agency as meeting high benchmarks for energy efficiency.)

These esteemed certifications –- though they require money and time to achieve -- offer big competitive advantages. Beyond wasting fewer natural resources, eco-friendly buildings have lower vacancy rates, better indoor air quality, fewer sick days among employees working in them, lower liability insurance premiums and can fetch higher rents from tenants. They also attract higher-caliber workers and have higher occupancy rates because people desire to work in environmentally friendlier conditions.

Adam Fransen, sustainability project manager for multinational commercial real-estate firm CB Richard Ellis, shared findings from a University of San Diego study called “Do Green Buildings Make Dollars and Sense?” The researchers compared 154 Energy Star-labeled buildings in 10 large U.S. markets with non-Energy Star general office buildings in those same markets. All buildings in the study were owned by CB Richard Ellis.

The study found that overall operating costs of the Energy Star-labeled buildings didn’t decrease despite their environmental practices – likely because they were more intensely managed than other buildings, Mr. Fransen said. But the Energy Star-labeld buildings had a 3.5% lower vacancy rate and charged 13.5% more for rent than the other buildings. Energy costs were also much lower in the Energy Star-labled properties: Every one-point increase in a building’s Energy Star rating, for instance, saved .83% electricity costs.

Mr. Fransen said that while the competitive advantages of being a “green” building are substantial today, they likely won’t last forever as green practices become mainstream and expected. “There’s a unique window” over the next five to 10 years,” he added.

Have questions about how to get Energy Star-labeled or LEED certification? Call Energy Smart at (651)292-4653.

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The Power of Peer Pressure in Energy Savings

With the federal government putting so much emphasis on energy-efficiency, researchers, business executives and politicians are trying to solve a key problem: How do you compel consumers and businesses to actually want to save energy?

It’s been widely recognized for a long time that people’s prime motivators for making environmentally friendlier choices are often personal -- saving money or staying healthy. But research is increasingly finding another big motivator: social pressure.

The Sacramento Municipal Utility District in California was among the first to test the theory that consumers would lower their energy usage if they knew how much energy they consumed compared to their neighbors and were recognized for their good deed. The idea: Everybody wants their neighbors to like and admire them.

According to a New York Times article, the Sacramento non-profit utility began sending out report cards to customers in 2008 showing how their home energy consumption compared to others in their area. Those who used less energy than their neighbors got smiley faces on their bills; those who used more got frowny faces. (The city eventually stopped sending out frowns because of some complaints.)

Six months into the experiment, the city noted a 2 percent drop in energy usage among those who received the personalized report cards, compared with those who received standard statements.

Since the Sacramento success, utilities in several other cities followed suit and started using report cards and positive reinforcement like smiley faces. (Xcel Energy, one of the largest electric and gas utilities serving Minnesota, recently started sending report cards to 35,000 of its gas and electric customers in St. Paul.)

But using social pressure tactics as a way to drive consumers to save energy is still evolving, and researchers say utilities and other businesses should find more ways to use peer pressure to their advantage.

Dan Ariely, a behavioral economist at Duke University and author of the book “Predictably Irrational,” claims the success of the Toyota Prius – the most popular hybrid auto on the road – shows that people are even willing to spend more money to reduce their environmental footprint. But the Prius’s success is largely tied to the fact that people drive their cars around, so others see them in them. Home and business energy consumption is far less visible and tangible, and so even though people spend far more on heating and lighting their homes than on gas, they’re less motivated to do something about it.

Mr. Ariely wrote in a 2008 blog post about his findings: “We don’t remember the price of heating, lighting, etc. We don’t see other people and think about how much they are paying to heat and cool their homes, and we don’t get any social bonus points for making our homes more efficient. What is the point of all of this? I think we can look at the success of the Prius, and by understanding the underpinning of its success, we can design incentives so that people start caring about making their homes more efficient.”

Do you think social pressure plays a big role in the decisions you make? What other ways could utilities and other businesses use it to get people to voluntarily reduce their energy usage?

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When Space Heaters Make Cents - And When They Don't

When winter gets cold, the cold get…. space heaters.

Many people use electric, gas or radiant space heaters as a way to warm less-toasty areas in their home or business, such as basements, three-season porches or even office cubicles. The assumption is that space heating is more energy efficient (hence, more economical) than cranking up the furnace.

But while space heaters can sometimes be a practical heating solution, many people who use them end up inflating their heating bills. The reason: They’re often used for “comfort heat” on top of central heating systems and to solve heating inadequacies that can be resolved in more cost-effective ways.

So when does using space heaters make sense?

According to the Department of Energy, space heaters “can be less expensive to use if you only want to heat one room or supplement inadequate heating in one room.” So it might make sense to turn down the thermostat and use a space heater to just heat one small area. (Of course you’ll want to turn off the space heater then when you’re not in the space it’s heating.)

Space heaters are not, however, more cost-effective than central heating systems when they are used beyond one or two small areas in a home or business: When used to heat a whole home or business, gas furnaces cost 43% the cost of using electric space heaters to heat the same area, the Energy Department estimates.

But before you turn to space heaters to solve heating issues, try addressing the root problems causing you to need them, such as cold air seeping into your home or a poorly functioning furnace. (Read our blog post on ways to shave winter heating bills.)

If you do need to use a space heater, do it wisely. Here are some tips:

-- Purchase an energy-efficient portable one. Check out this recommendation list.

-- Turn down the thermostat if you’re using it. You will drastically ramp up your bills if you’re using a space heater on top of another heating source.

-- Dress adequately. The more layers you wear, the less you’ll feel the need to crank up the heat.

Also keep in mind that space heaters can be dangerous. The U.S. Consumer Product Safety Commission estimates that space heaters spark nearly 22,000 residential fires annually, leading to about 300 deaths and thousands of burns.

Do you use a space heater? Does it help your heating bills, or cost you more?

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How to Lower Your Heating Bills

It’s been an unusually cold winter in many parts of the U.S., and that means heating bills may be burning a hole in your bank account. How can you minimize the costs, but still stay warm?

One possible solution is installing an Energy Star-qualified furnace or water heater, which may cut those heating costs by nearly 30%. (An added bonus: Utilities and state overnments are now offering rebates to home owners and businesses replacing older models with highly efficient ones. Find out about rebates in your area here.)

But even if that’s not an option, here are some lower-cost strategies for keeping winter heating bills in check:

1. Use a programmable thermostat. This lets you preset the temperature in your home or business over the course of the day, so you can lower the temperature at times when it’s less important to keep it warm – such as while you’re sleeping or nobody's around. For every one degree you lower the temp, you can save 2% of your heating costs.


2. Use less hot water. Heating water for tasks such as washing, food preparation and production, accounts for a big chunk of heating bills. One strategy: Set the controls on your hot water heater at 120 degrees or lower. You can also cut down on hot water use by up to 50% by installing faucet aerators and low-flow showerheads. Use cold or warm water for tasks that don’t require hot, such as washing many types of clothes.

3. Seal drafts. Many people overuse the furnace – or needlessly shiver – because their building or home is drafty. Cold air can seep in through door and window frames, roofs, and fireplaces, and other cavities. It’s sometimes obvious where cold air is leaking in because you feel it; other times not so much. Once you identify the draft culprits, seal them up (and make sure your fireplace damper is shut when not in use.) Here's some advice on how to do that.

4. Use ceiling fans. Fans aren’t just for summer. Using ceiling fans in the winter can help push down and circulate warm air near the ceiling and distribute it around the room, so the space requires less heat.

5. Maintain your furnace. Getting periodic checks of your furnace and replacing or cleaning the filter every few months months will ensure you’re getting optimum performance. 

6. Insulate properly. Making sure you have proper insulation in areas such as attics, crawl spaces, and basements where hot air often escapes can help. An energy auditor will identify areas where insulating makes sense, but this primer on insulation from Oak Ridge National Laboratory can also help. 

Have you found other ways to reduce your home or business’s heating costs?

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Xcel Energy Sweetens Rebate Programs for Minnesota Customers

If you’re a Minnesota customer of Xcel Energy, take note: The utility is handing out even bigger financial incentives for making energy-efficiency upgrades in 2010.

Xcel Energy, a large electric and gas utility serving Minnesota, just rolled out greatly enhanced rebate programs for the state's residential and business customers in 2010. For many types of energy-efficiency upgrades, Xcel Energy customers will be able to pocket a lot more money in 2010 compared with previous years. It’s also introducing rebates for certain types of upgrades that didn’t exist before, such as installing an exit sign illuminated by light-emitting crystals ("LEC").

At a training program for vendors last week, Xcel Energy representatives said that some of the rebates have more than doubled from 2009 levels. The reason for the bigger rebates, they explained, is that Xcel must meet new state-mandated energy-conservation goals in Minnesota requiring it to reduce its energy retail sales by 1.5% annually. (Read more about the Next Generation Energy Act.)

How much the Xcel Energy rebate increases for 2010 depends on the type of upgrade. Some upgrades, such as replacing standard incandescent exit signs with LED lights will climb to $25 per exit sign in 2010, from $6 per sign in 2009 – more than four times as much. Here’s a sampling of some of the rebate changes for common energy upgrades, according to rebate forms:

- Replacing an incandescent or T-12 lighting system with one- or two-lamp T-8 systems provides an $18 rebate per system in 2010, up from $8 in 2009.

- Installing a wall-mounted occupancy sensor for lighting provides a $25 rebate in 2010, compared with $12 in 2009.

- Purchasing a new non-condensing hot-water boiler with less than 10 million British thermal units per hour (BTUH) and a 92% efficiency rating provides a $800 rebate for every 1 million BTUH in 2010. That would have provided a $300 to $500 rebate per 1 million BTUH in 2009.

You can find information about Xcel Energy's rebates and conservation programs in Minnesota, along with rebate forms, here.

Keep in mind that 2010 rebates only pertain to upgrades invoiced after Dec. 31, 2009 – all upgrades made in calendar-year 2009 qualify for 2009 rebate amounts. Upgrades that are not offered rebates in 2010, but qualified in 2009, can be eligible for Xcel Energy rebates if they are invoiced by March 31, 2010.

Have questions about whether you qualify for a rebate or need help qualifying? Give Energy Smart a call at (651)292-4653 or e-mail us at info@mnenergysmart.com.

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Workshop: How to Make Your Office Equipment Greener

Office technologies – think computers, monitors, printers, external hard drives and copiers – are among the fastest-growing energy sappers at U.S. businesses, according to the American Council for an Energy-Efficient Economy. And that’s just a piece of their carbon footprint: What happens to all that bulky equipment after a business gets rid of it? And what about the huge data centers that support the information technology?

Minnesota Waste Wise, the nonprofit that oversees Energy Smart, is hosting a workshop on Jan. 26 to help businesses make eco-conscious decisions when it comes to their electronics and information-technology systems. The workshop – “Green Electronics/IT” -- will be at 400 North Robert St., Suite 1500, in St. Paul, from 8:45 a.m to noon. Registration is $20 for Minnesota Waste Wise members and $30 for non-members. Coffee and pastries will be served.

Speakers will address how businesses can find and purchase electronics made with eco-friendly materials and in sustainable ways, easy steps for reducing the energy consumption of these technologies, and the array of options for recycling or reusing them once the business no longer needs them. The event will also explore the environmental toll of data centers, and answer any questions from attendees.

Read the full agenda and register for the event here.

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Minnesota Unveils New Grant Program for Energy-Efficiency Projects

Minnesota businesses planning significant energy-efficiency or renewable-energy projects in the next two years may be eligible for some big financial help. But they must act quickly.

As part of the federal-stimulus package, states received money to spend on energy-conservation projects.  Minnesota recently unveiled plans to spend $4.1 million of its stimulus funds providing grants to commercial and industrial property owners looking to make energy upgrades before mid-2011. The grants are intended for large-scale improvement projects, and can include anything from lighting, heating and industrial equipment upgrades to purchasing renewable energy power sources. Nonprofit 501(c)3s and economic development organizations can also apply for grants to create their own grant programs. (Energy Smart put together a two-page summary with basics on the grant program and the criteria and rules . Read it here.)

The full grant proposal and application is due Feb. 12, but applicants must provide a short notice of intent by Jan. 29 that gives basic details about the project. Businesses receiving money for improvement projects will be expected to be able to match at least 50% of the project's total estimated cost. (You can read the full official request for proposal and get the necessary paperwork to apply here.)

Projects covered by the grant must be completed by June 30, 2011.

Have questions or need help? Feel free to give Energy Smart a call at (651)292-4653. We can help businesses determine if they qualify for a grant and answer questions about the program.

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