Energy Efficiency

"Cash for Clunkers" Rebate Program Explained

The so-called "Cash for Clunkers" program formally took effect on July 24, offering up to $1 billion in rebates to U.S. residents who trade in their older cars and trucks for more efficient vehicles. The new program, which the U.S. Department of Transportation (DOT) calls the Car Allowance Rebate System (CARS), covers sales or leases starting on July 1, and is scheduled to run through October 31 or until the funding runs out. Rebates range from $3,500 to $4,500, depending on the fuel economy of the vehicles involved, and the DOT estimates that the program will remove from the roads about 250,000 inefficient vehicles. The DOT has established a toll-free hotline for consumers at 866-227-7891.

Generally, to qualify for the stipend, the vehicles must not be older than 25 years, must be drivable, and must have a combined fuel economy of 18 miles per gallon (mpg) or less as certified by the U.S. Environmental Protection Agency. New vehicles must have a combined fuel economy of at least 22 mpg, while new sport utility vehicles and small and medium-sized pickup trucks and vans (collectively called "category 1 trucks") must have a combined fuel economy of at least 18 mpg. To earn the maximum rebate, the new cars must have a combined fuel economy of at least 10 mpg higher than the traded-in cars. A Category 1 truck earns the maximum rebate with a 5 mph improvement over the surrendered truck. Under CARS, all vehicles traded in must be junked, though some parts may be salvaged. The DOT issued the final rule for the program on July 24, but the rule has not yet been published in the Federal Register.

^ Top of page

Schools use energy performance contracts

About a year and a half ago, Ron Wilcox, the superintendent of schools in Madison County, North Carolina, had a big problem. Electricity bills for the district were 38 percent higher than budgeted. Apparently the local utility had been burning oil to make power, and oil prices were way up back then. Wilcox went to the county commissioners to ask for more money and got it -- along with a lecture about energy efficiency.

Since then, Wilcox has become an evangelist for efficiency and for renewable energy, and so he was invited to speak at the 2009 Energy Efficiency Forum in Washington sponsored by Johnson Controls. His little school system -- 2,600 students, one high school -- has an energy-efficiency success story to tell, albeit one only indirectly related to the forum's topic: "How Stimulating is the Stimulus?"

First, some background: Madison County is a beautiful place, according to Wilcox, but it's a poor and rural country, dependent on tobacco farming, which is in decline. The uptick in its energy bill last year was $118,000. That's a lot of money for local taxpayers who finance about $2.6 million of the school's budget, most of which comes from state and federal sources.

Madison County borrowed about $3.7 million from a bank. Johnson Controls says that, after repaying the loan, the district would realize $5.9 million in energy savings over 15 years. The company estimates that "facility improvements and behavior modifications strategies" (that sounds ominous, but it's mostly about turning out lights and regulating building temperatures) would reduce energy use by 36 percent across six schools and three administrative buildings. Of course that's good for the environment, as well as for teachers and students. The project's reduced emissions will be equivalent to removing 8,250 passenger vehicles from the road, according to this press release.

Once Wilcox got to thinking about energy, he didn't stop. So he turned to his local utility company, which in partnership with the Appalachian Regional Commission, came up with federal money to buy three small windmills (about 2-3 kw each) for the county's schools. The utility company is also helping Madison County finance solar photovoltaic panels on school roofs and solar hot water heating. "We're rural. We're small. But it's our goal to be the school system in NC that leads the way with alternative energy," Wilcox says. One thing led to another, as it does in small towns. The owner of the local landfill called to say that if the schools got serious about saving and recycling all of their cardboard, he'd buy it from them. "Last year, we made $16,000 by recycling," Wilcox said. That money is used to help the district's low-income kids take school trips and participate in more activities.

Madison County is also expanding its curriculum. "They're going to have a solar energy class in the high school," says Felicia McDade, a Johnson Controls executive who works with school districts across the south to promote efficiency. It must be fun for the elementary school kids to look out their window and see a wind turbine, although ideally you'd want them paying rapt attention to the teacher.

What does all this have to do with the stimulus package? Well, Wilcox is now getting creative about financing the improvements. It turns out that the project may be eligible for something called "Qualified Energy Conservation Bonds," which can be used to finance energy efficiency projects in public buildings. The stimulus package provides $3.2 billion in bonds, and Madison County is getting in line. These will lower his interest rate to close to zero, and make the efficiency project an even better deal for the county. Of course they won't "stimulate" anything since the project was under way already.

In fact, these energy performance contracts have been around for more than 20 years, and they are designed to work without government subsidies. Johnson Controls has about $4.5 billion in performance guarantees in place, all around the U.S.A., one of its execs told me.

The bigger question is why so many buildings, particularly in the private sector, remain so inefficient. As Kevin Kampschroer, a buildings expert with the General Services Administration, put it: "Buildings in this country are operating with the same degree of energy efficiency, on average, as they were 20 years ago. Why hasn't it changed?"

That's complicated. One answer is that there's a market disconnect around commercial buildings -- owners and developers don't have much incentive to make capital improvements to the energy systems because they don't pay the electricity bills. Homeowners, meanwhile, are famously indifferent to efficiency until prices get very high. And most corporations demand a rapid payback, say, three to five years, before they will invest in efficiency. This is one arena where government works better than markets. People like Wilcox can think long term.

Then there's the human factor. "It's nice and fun and glitzy to build a new building. I've done it," said Kampshroer of the GSA. No one gets excited about upgraded the HVAC system and installing more insulation. But it's smarter to invest in existing buildings, and to make what we have last longer, than it is to build new.

^ Top of page

Google enters Energy Efficiency Equation

Imagine if you walked into a grocery store, chose the food you want (no price tags), took it home and then, at the end of the month, got the bill in the mail. "That's essentially what we are doing with electricity and natural gas right now," says Dan Reicher, who heads energy and climate policy at Google, which is aiming to change that.

Instead giving energy consumers a monthly bill that arrives after the fact and is hard for even a geek to decipher, Google wants to give them a way to track their electricity use in real time, or close to, through a free, open-protocol piece of software called Google's PowerMeter.

It's being rolled out in cooperation with eight utility companies, six in the U.S., one in Canada and one in India, that feed the software data through smart meters or other devices.

"Just the simple act of getting people information can really change the way they use energy," Reicher says.

The software, for now, tracks electricity use, but there's no reason it can't be adapted to meter natural gas or water in the future. The software can be installed on a Google home page (alongside stock prices or sports scores) or on a mobile device. "You get data, numbers, graphics, all kinds of interesting things," he says.

Making consumers smarter about energy has real potential, especially when it is combined with time-of-day pricing. If utilities (and their allies like Google) can persuade people to use less electricity during summer days when it is expensive and more during off peak hours, they won't have to build as many new power plants to meet peak loads and everyone will save money.

Google employees have been testing the PowerMeter for some time, with amusing results. One tenant in a San Francisco apartment saw unusual spikes in his usage and learned that he was paying for the washer and dryer for his entire building. Another found that her swimming pool pump never turned off. A third replaced old refrigerators in the kitchen and garage and cut his utility bill by 45 percent.

The scope of Google's work around energy and climate is quite remarkable, as Reicher explained. (He's a typically smart Google exec, a former energy investor and policymaker during the Clinton administration.) Google is investing in geothermal energy, doing its own research on solar thermal power, pushing hard for plug-in hybrids and "greening" its data centers. I'm hoping to dig deeper into Google's energy work in a future post.

^ Top of page

Light Emitting Diode (LED) Lighting is the Future of Savings!

It is imperative for society to move to solid-state lighting to save money in the built environment and lessen the impacts to the broader environment -- but in the U.S. it may take a policy change to force the nation to use more sustainable lighting, according to a recent study by Carnegie Mellon engineering and public policy researchers.

Lighting for commercial buildings, streets and houses constitutes more than 20 percent of total electricity consumption in the U.S., and using light emitting diodes can reduce consumption and greenhouse gases because of the way that LEDS convert electricity to light, says Ines Lima Azevedo, a researcher at the Carnegie Mellon Climate Decision Making Center and its Electricity Industry Center.

LEDs are a type of solid-state lighting, so called because light is emitted from a solid object, a semiconductor, instead of a vacuum or gas tube as in incandescent light bulbs and fluorescent lights. LEDs generate less heat and have a longer lifespan than non-solid state lighting.

Some LED technology is cheaper than traditional lighting and white LEDs can be a cost-effective, energy efficient way to reduce emissions, in addition to being mercury-free from mercury unlike fluorescent tubes, say the other members of the research team, M. Granger Morgan and Fritz Morgan. M. Granger Morgan is the Lord Chair Professor of Engineering at Carnegie Mellon and head of the Department of Engineering and Public Policy. Fritz Morgan is chief technology officer of Philips-Color Kinetics and a Carnegie Mellon alumnus.

The U.S. Department of Energy's Energy Efficiency and Renewable Energy section calls solid-state lighting "a pivotal emerging technology that promises to fundamentally alter lighting in the future." The EERE also says, "No other lighting technology offers as much potential to save energy and enhance the quality of our building environments, contributing to our nation's energy and climate change solutions."

The Carnegie Mellon researchers say, however, that there are barriers to widespread use of LEDs. The group recommends development of nationwide lighting standards for new commercial and residential construction in the U.S., and contends the country will not move to more environmentally friendly lighting without such a directive. "Even if the LED technology is cheaper on a lifecycle basis, consumers are likely to stick to what they know," Azevedo said in a statement. "We need the design of smart policies to make this transition."

^ Top of page