July 30th, 2010

Energy Efficiency is Sexy if You’re Wearing Carbon Goggles

BOSTON -

I was lucky enough to have a seat at the packed GLD Cleantech Kingpins event last week at the Nexus Green Building Center.  It turned out to be a nice back-and-forth discussion about why energy efficiency isn’t catching on in the mainstream.  This discussion was appropriately timed on the day that the Senate killed the climate bill.  Although it was already on life support, its termination was still surprising for this optimist, since I am convinced a cap on carbon is the best, most straightforward, way to incentivize individuals and companies to turn around our economy.

Meanwhile, the panelists, from leading and emerging companies in energy efficiency, as well as a vocal crowd, pontificated on reasons why energy efficiency hasn’t caught on in the mainstream, and the consensus in the room was:

Energy efficiency isn’t sexy.

Too many people do not find energy efficiency attractive.  This got me thinking, and elaborating, probably too much in my depressed state, on this attractiveness metaphor.  If energy efficiency is not perceived as sexy normally then when is it perceived as sexy sometimes?

I was thinking about this on the bus ride home when I had my Aha! moment.  Energy efficiency is like a girl you see on a bus who you’ve never considered sexy, because you’re on your way from work when you see her and you don’t want to talk to anyone, let alone to her.  But when you’re out on the weekend—let’s say the bar or the beach—you see the same girl and you talk to her.  Then BAM! This girl seems sexy to you.

The Senate just ruined America’s chances of scoring with Ms. Energy Efficiency, and it’s pretty unlikely that we will dance any time soon with Lady Wind or Senorita Solar.  To me, it is as simple as placing a price on carbon – that’s really all it will take to force mainstream America to give these girls a chance.

Beauty is in the eye of the beholder, and the inherent beauty of energy efficiency won’t appear in the mainstream unless the public is prepared to see it.  The government was really close to opening the public’s eye, but it couldn’t seal the deal.

What do you think?  How long will America be stuck on the bus?

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Aaron Lindenbaum

About Aaron Lindenbaum

Aaron Lindenbaum is an Account Executive at Rasky Baerlein Strategic Communications in Boston. At the intersection of media and politics, Aaron works in the Energy, Environment and Emerging Tech practice group where he provides essential support in developing and executing campaigns that include community, media and government relations for a wide range of energy and cleantech companies and organizations. Connect with Aaron @lindybomb

  • Carrington_Ward

    Elisa Wood had an interesting post on efficiency at the cleantechies blog:
    http://blog.cleantechies.com/2010/07/30/what-en…

    For my part, just a couple quick comments:

    1) To a degree we can talk about 'conspicuous production' as a 'consumer' goal: people like solar panels (and businesses like big windmills) because they make a statement. I tend to think there's some truth to this. We are more closely related to chimps and bonobos than we are to homo economicus, so reputation and standing likely means more to us than 'getting and spending.'

    (It's interesting, btw, to note that, as environmentalists, we now see reason to lament people's stubborn unwillingness to act like good rational maximizers — this is a major change from the granola era.)

    2) That said, it is still worth thinking about the economics of efficiency. One of the big problems that came up (and, I think, one of the common themes to the 'kingpins' success) was how to build efficiencies of scale.

    Chris Williams has argued persuasively that we need to think about returns on investment and rates of return (instead, of, e.g. 'payback time'). The problem is that these financial calculations are a little bit 'squishy' because they need to account for effort as well as payback. As an example, I live in a fairly drafty 4 br New England house built in the 1920s. Give me $5k to cut my energy bills, one of my big decisions would be between investing in a portfolio of weatherizations — caulking, repainting, insulating, etc — and slapping a nice big solar system on the roof. The latter might not be optimal, but it would provide a satisfactory return, for far less effort and management time on my part.

    It's a similar issue for service providers, as one commenter mentioned — it's somewhat easier to specialize retail-scale solar or wind installation than to build a business that does 'home energy makeovers.' Even though a 'holistic' portfolio of home energy improvements might achieve a better return on investment, it demands a wider range of competencies, faces competition from DIY punters, and suffers from dispersion.

    Of course I am disappointed by our inability to enact a national cap and trade regime — it's a significant defeat for the Obama Administration and a harbinger of rifts within the Progressive coalition. Still, RGGI and the Western Climate Initiative do impose a price on carbon within their respective regions. Nationally, the avenue of attack on the Oil-congressional complex is probably not raising revenues but stripping subsidies (to research and development, to drilling/mining on federal land, to insurance against liability for environmental damage). The larger political climate aside, wind and solar remain excellent investments in the context of a parlous economy and increasingly volatile markets for oil.

  • http://www.thegreenlightdistrikt.com Chris Williams

    Carrington,

    Thanks for the awesome reply, you bring up a lot of points. I'm in the process of writing up my follow up post to the event which will bring out a little more of what you've talked about. A couple things you brought up that I think are awesome is

    1) Transaction cost. When people talk about ROI yadda yadaa, they rarely take into account transaction cost. This is huge in the economics of any decision, yes, I could drive 40 minutes to save 50% on a gallon of water, but I'd spend more getting there. You tough up when you mention the simplicity of buying solar.

    2) Duality. Our brain seems to always put thing in either or, good/bad left/right, I think we learned from the event that EE is based on finance for the commercial clients and not for the residential.

    Thanks again for your comment!

    Chris

  • Alexandra

    I agree – efficiency isn't sexy. People are much more interested in renewable energy technologies because they make a direct statement, but also, because I don't think that people understand how efficiency influences the effectiveness of renewables. I myself did not take much time to think about this as a student while advocating for climate legislation until a friend pointed it out to me.

    The national government has repeatedly failed us in passing energy/climate legislation that will actually make any sort of impact (I, by the way, am a proponent of the cap-and-dividend approach to carbon taxing that returns a portion of the money earned through taxing to the people). This doesn't mean that local communities and state governments cannot take action, though. I think that municipalities and states can make efficiency sexy and chat her up, or at least slip her into the conversation under the radar, by coupling renewable energy tax credits and other renewable incentives with efficiency incentives. For example, if you weatherize your home, you receive a larger tax credit or a rebate on a solar hot water system or panel installation.

    On the commercial scale, business is business. Efficiency projects most often have a far greater rate of return on investment than renewables. They should be marketed as such. Efficiency = making money. This language is universal, and in most industrialized countries, especially the US, and especially for businesses, money = sexy.

  • Pingback: 6 Reasons the High ROI of Energy Efficiency Doesn’t Matter | The Green Light Distrikt

  • p manke

    Unless we accept several observations truthfully, we will not have a chance of altering the ruinous course of U.S. climate and business responsibility. First, we may not allow the corporate and the very wealthy influence in government to continue because they are too often opposed in purpose. We must accept thst the US Constitution is a workable document when applied for all people, and did not intend to allow wealth to be the deciding factor in policies and direction. Lobbiests and PAC;s must be eliminated from Washington DC and corporate funding of elections must be made illegal.
    We must honor the scientists who we have charged with assesing our world and biosystemic view.