August 14, 2011
Investing in energy efficiency measures makes sense, as they pay for themselves over time through savings on the utility bills. The challenge is often finding the means of financing the up-front costs. As this article points out, many states used the economic stimulus money from the American Recovery and Reinvestment Act (ARRA) to pay for energy efficiency programs. Another approach is using energy performance contracts, where companies (such as Johnson Controls) handle installation of the measures and guarantee a contracted-for level of savings. In addition, third-party lenders are willing to invest in energy efficiency, given that the savings on utility bills provides a relatively secure revenue stream to repay the loans. In the case of New York City, utility rates are very high, which makes the economic case for energy efficiency more compelling. But even at electricity rates prevailing in most parts of the country, energy efficiency investments are cost-effective, and represent the cheapest way of reducing greenhouse gas emissions.