August 21, 2020
Communities throughout California and beyond are continuing to face a multitude of adverse impacts due to COVID-19. Black, Indigenous, and People of Color (BIPOC) and other marginalized populations have been disproportionately affected due to historical and ongoing systemic inequity, exclusion, and under-investment. These impacts are now being further exacerbated with the current heat wave as low-income households often face higher energy cost burdens with fewer resources to implement energy saving measures.
At the same time, the ongoing pandemic has created opportunities for building owners, managers, and tenants to complete energy efficiency retrofits as a cost-saving measure, as well as to target vacant and/or underutilized buildings due to shelter-in-place orders. Expanding energy efficiency initiatives during the COVID-19 pandemic offers multiple co-benefits – from energy cost savings to job preservation and workforce development.
Job Creation and Workforce Development
April saw 975,000 job losses in the US building and construction trade. Roughly 600,000 people in clean energy jobs have been laid off due to COVID-19 impacts – more than double the number of clean energy jobs created since 2017. By expanding energy efficiency initiatives, local governments can create opportunities for the large reserve of skilled energy professionals that are now unemployed.
Efficiency investments direct funds from less labor-intensive to more labor-intensive sectors, creating more employment opportunities. For example, investing in an energy efficiency project creates openings in the labor-intensive construction industry which sees 20 jobs per $1 million spent compared to the national average of 17 jobs per $1 million spent. Savings realized from the energy efficiency upgrades will continue to generate money each year that is redirected away from less labor-intensive energy generation and distribution jobs which support only 10 jobs per $1 million in investments.
Local example: The SoCalREN Integrated Comprehensive Whole Building Retrofits Public Agency Program provides technical assistance to local governments and districts to implement energy efficiency retrofits for public buildings. In 2018, the program completed 118 energy and/or water efficiency projects, and produced nearly 15.6 Million kWh in energy savings. Since the launch of the program in 2013, more than 504 jobs have been created.
Local governments can use Coronavirus Aid, Relief, and Economic Security (CARES) Act funding to create and supplement job training programs in energy efficiency that provide opportunities for community members most affected by COVID.
Local example: The City of Charlotte, North Carolina launched the Renewable Energy and Efficiency Workforce (RENEW) training program in April 2020 with funds from the COVID response CARES Act. This program is a partnership between the City and the Urban League of the Central Carolinas. Public-private partnerships are another avenue that local governments can utilize to develop job training opportunities. The City recognized the importance of developing “life-changing career opportunities for the residents in our community most affected by COVID-19” and will recruit their first cohort of residents from those most impacted by COVID-19.
Local governments can also align energy efficiency priorities with workforce development strategies or programs to accelerate implementation and maximize economic and social benefits.
Local example: The City of Boston’s energy efficiency apprenticeship program prioritizes young adults and low-income Bostonians. The City has identified complementing steps to create a pathway for employment that includes career and technical education (CTE) at local high schools and partnerships with stakeholders such as trade unions and construction companies.
Local Government Cost Savings
There are a wide array of building improvements and projects that produce long-term cost savings that significantly outweigh initial upfront costs and maintenance. At a time when local jurisdictions are facing budget shortfalls, energy efficiency can be used to permanently lower municipal energy bills.
Local example: Los Angeles’ LED Street Lighting Retrofit project converted over 140,000 public lights to LEDs. Even after accounting for the cost of repaying the project loan, the project saved the city more than $7 million annually and reduced energy use by 63%.
Local example: Culver City used on-bill financing to finance a large energy efficiency project that included installation of an Energy Management System (EMS) at the Police Station, Senior Center, City Hall, Veterans Memorial Center, and Transportation Center, as well as interior and exterior lighting retrofits at select sites. The City received financing of $442,000, leaving $53,600 in expenses. The project is anticipated to save at least $68,000 annually in savings, allowing the city to realize cost savings in as soon as one year.
Local example: The City of West Hollywood worked with SoCalREN and Westside Energy Partnership to implement energy efficiency programs in city buildings, notably City Hall. Built in 1962, City Hall was due for a major renovation. After conducting an energy audit, the City decided to add multiple efficiency upgrades into an existing and budgeted capital project. The City Hall Improvements project has an estimated 5.8-year payback including an energy savings of over 154,063 kWh per year, $23,415 in project incentive dollars, and is projected to save 20% to 30% of the facility’s energy use.
Funding Opportunities and Incentives
Local governments can leverage a range of different funding programs, policies, and incentives to complete these projects and incentivize residents and businesses to use energy efficiency as a means of increasing economic and energy resilience.
Local example: The City of Berkeley uses Property Assessed Clean Energy (PACE) financing in an effort to encourage residents to invest in energy and water efficiency projects and renewable energy systems. The California Statewide Communities Development Authority provides additional funding support with their Public Agency Programs.
Local example: The Town of Windsor’s Windsor Energy PAYS® program allows residents and businesses to finance water and energy saving upgrades with no up-front cost and immediate savings on utility bills. Average customer savings amount to $30 per utility bill, 10% reduction in energy use, and 20% reduction in indoor water use, generating estimated annual savings of 9.2 million gallons of water, 88,000 kWh, and 25,000 therms.
Local example: The City of San Jose challenges public sector building managers, as well as commercial building managers, to become a Building Performance Leader and commit to reduce GHG emissions by 10% over the course of one year. The City participated in the first year of the program to reduce municipal building energy use. While the program is voluntary and encourages leadership, local governments can formalize performance goals through ordinances such as the San Jose Energy and Water Building Ordinance, which requires buildings of a certain size to track and share their energy and water usage through ENERGY STAR Portfolio Manager®
Local example: The County of San Luis Obispo is launching a revolving loan fund for energy efficiency projects with seed funding from a $2.2 million California Energy Commission (CEC) loan.
Local example: The City of Holland, Michigan’s municipal utility made over $440,000 in improvements to the city’s inefficient housing stock through its on-bill financing program.
Local example: The City of Tallahassee, Florida’s on-bill financing program has loaned $130 million for 17,000 retrofits since 1983. The program has roughly an 18% participation rate among the City’s utility customers.
Resource: The Environmental and Energy Study Institute offers resources for electricity cooperatives and municipal utilities interested in joining the more than 80 other electric cooperatives and MOUs that offer on-bill financing programs across the nation.
When offering services to small businesses that are struggling during shutdown orders or changes to their operating procedures, local governments should point to cost saving opportunities available through energy efficiency upgrades. Many local governments are offering grant programs to small businesses in their jurisdiction. Earmarking specific funds for energy efficiency retrofits, especially for businesses that had to temporarily shut down operations, is an opportunity for cost savings that will decrease operating costs upon reopening.
Local example: Burlington, Vermont is using CARES Act funding to grow their Revolving Loan Fund which local businesses can access to make building ventilation (to meet public health guidelines) and energy efficiency improvements including duct work and heating and cooling measures. The funds include targeted outreach to BIPOC-owned businesses and seek to contribute to Burlington’s goal of reaching Net Zero Energy city status.
State and local government pensions can be used to finance loans on the “secondary market,” which then get repaid into the pension fund.
Local example: The Fresno County Employee’s Retirement Association (FCREA) allocated millions of dollars from the pension fund to invest in community projects with social benefits, such as affordable rental construction, disaster recovery, and green infrastructure. FCREA grew this initiative in the wake of COVID-19, anticipating greater need for local capital during recovery.