$1 Trillion Savings - Report on US Energy Efficiency Building Retrofit

US ENERGY efficiency retrofits could yield $1 trillion of energy savings and create 3.3 million job years; new financing models can unlock this opportunity.

Deutshe Bank Climate Change Advisors (DBCCA) and The Rockefeller Foundation today released a research study which examines the potential size and investment opportunity of upgrading and replacing energy-consuming equipment in US real estate.

The paper, entitled, “United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models,” highlights this investment opportunity, with the potential for significant economic, climate, and employment impact. DBCCA is the climate change investment and research business of Deutsche Bank’s Asset Management business.

Judith Rodin, President, The Rockefeller Foundation, noted “buildings consume approximately 40% of the world’s energy and are responsible for 40% of global carbon emissions. However, proven technologies to retrofit buildings can both conserve energy and - even more importantly in these difficult economic times – have the potential to create a large number of jobs. With the release of this new report, outlining both the investment and job opportunities, I am increasingly hopeful that this market can achieve its full potential.”

Mark Fulton, Global Head of Climate Change Investment Research for DBCCA, stated “We believe that the emerging Energy Service Agreement financing structure offers significant near term potential to scale quickly and meet the needs of both real estate owners and capital providers in the commercial and institutional market, without the requirement for external enablers such as regulation or subsidy.”

 In this report, DBCCA and The Rockefeller highlight that:

  • $279 billion could be invested in retrofitting the residential, commercial, and institutional market segments in the US. 
  • This investment could yield more than $1 trillion of energy savings over 10 years, equivalent to savings of approximately 30% of the annual electricity spend in the United States. 
  • If all of these retrofits were undertaken, more than 3.3 million job years could be created. (These jobs would include a range of skill qualifications, and would be geographically diverse across the United States.)
  • Additionally, if all of these retrofits were successfully undertaken, it would reduce U.S. emissions by nearly 10%.

The report goes on to investigate a number of financing models which offer the potential to scale investment in these markets and overcome both the supply and demand side barriers. Utilising the work done by the World Economic Forum as a reference point, the report profiles these models, including the Energy Services Agreement (ESAs), Property Assessed Clean Energy (PACE) and On-Bill Finance (OBF), in addition to examining the largest historical provider of energy efficiency upgrades, the Energy Services Companies (ESCOs).

Picture - New York City - Pier 17 © 2008 VirtualLight

Tuesday 6th March 2012

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