Chicken or the Egg? A brief history of Energy Efficiency Funding (continued)

Energy production output in the US has grown 3 times since 1970 and demand has only increased 50%. And despite the growth in average home size, more and bigger vehicles driven, and the rapid growth in all kinds of energy-consuming devices, energy used per American has decreased over the last several decades, from 2,700 gallons of fuel per person in 1970 to 2,500 gallons in 2010.

My family drives hybrid vehicles, has all LED lamps in our home and solar panels on our roof. However, energy efficiency measures, investments, and behaviors are not the only factors contributing to the increase in energy productivity over the last few decades.

The US has designed its economic structure to drive greater activity in less energy intensive industries and outsourced some heavy-pollution industries. Both of which have improved energy productivity as a byproduct and ultimately have affected the buildings, transportation, and industrial sectors.

Due to the 1973 oil embargo, exposing the US to global vulnerability, and its aftermath of high prices for energy and commodities there have been federal policies put into effect that also impact energy efficiency. The Environmental Protection Act (EPA) and Ford’s Energy Policy and Conservation act were born in 1975 and Carter introduced first National Energy Plan in 1977, implementing the Department of Energy (DOE). However, fuel prices stabilized in the 1980’s and consequently the interest in energy efficiency and its respective policies declined.

In 1992, in effort to regain interest in the issue, the Energy Policy Act (EPAct) was made law. As a result, building energy codes and equipment efficiency were standardized and grants for regional lighting and building centers were established. And the most recent policy of 2009, The American Recovery and Reinvestment Act (ARRA) was implemented to provide the single largest investment in US history, allocating more than $25 billion for core energy efficiency. This “Stimulus Act” funds appliance rebate programs, energy efficiency and conservation block programs, state energy programs, weatherization assistance program, federal high performance green buildings, tax incentives and Smart Grid grants.

Each administration has made changes, added or removed certain policies that change the money available for energy efficiency upgrades. A project proposed by an ESCO last year may have changed significantly this year as far as return on investment and payback. These changes depend on the change in rates from the utility companies and the available incentive dollars, and shall remain unstable until the funds are eliminated altogether. Personally, I have taken advantage of the demand and invested in the industry both for career purposes as well as utilizing the technology that has come available due to the demands. Although, the true drive behind the industry is still in question; is it the technology that drives the demand or the demand that drives the technology, and who is truly in control of the demand?


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