Investigating, understanding, and harnessing energy has allowed our species to extend life and create a greater capacity for new life in ways previously unthinkable. From the beginning of recorded time until 1850, our population on the planet grew steadily to about one billion. After developing efficient ways to harvest and deploy intense stores of energy, we grew by another billion in the next hundred years - a growth rate 100 times faster than the previous centuries. In the next twenty years - 1950 to 1970, we grew by another billion, and have added about a billion every twenty years since. Meanwhile, life expectancy across the globe has increased, leisure time has increased, and overall quality of life has increased. None of this is possible without our ability to manipulate energy the way we have.
That said, the systems we have developed threaten to tear us apart, and we now know that the cycle we created: improved energy knowledge leading to efficient energy transfer systems leading to population growth leading to the need for more energy leading to more efficient energy transfer systems leading to population growth...that cycle must be interrupted, and in such a way as to not damage the quality of life for this or another future generation. The market for energy has finally started to respond to the stresses we have placed on it, and many great opportunities now exist to continue to develop our economies, improve quality of life, and establish a more stable and resilient future for our descendants.
Much has been made about the advances in utility-scale electricity generation (improved wind, concentrated solar, and hydroelectric). Those technologies all have shown economic parity with conventional fuels, but their development does little to impact the development and maintenance of our communities. The real opportunity comes in new opportunities at community and building scale. These offer not only a hope for improving our impact on the environment, but also show us a path to make this improvement while incentivizing development in our communities. Some ways we can do this include:
1. Building efficiency. One of the least discussed, yet most relevant, programs within ARRA (better known as "the stimulus") provided funding to communities to improve insulation in homes and businesses. We have the knowledge and the skill to make every building so resistant to heat loss or gain (the drivers in winter and summer respectively for our need to add heating or provide cooling to our buildings), but lack only the prioritization. Most communities have contractors and service providers skilled in the construction and maintenance of buildings, and those that do not can quickly develop the labor force through an existing network of robust community college and union training programs.
2. Geo-exchange thermal storage. Sometimes generically referred to as "geothermal" (and not to be confused with "hot springs"-type underground heat that can drive electricity generators), the process of removing heat from buildings in summer, then storing the heat in the natural capacity of the earth for use in winter has a long history and simple operation. These systems have gained widespread use in the climate belt where we experience both cold winter and warm summer to varying degrees. Since this climate zone uses the largest energy per capita, geo-exchange offers a great opportunity to significantly reduce energy need.
3. Solar thermal and photovoltaic. Five years ago, discussing solar as an option rolled eyes, and for good reason: it did not pay. Half a decade later, prices have fallen, installation methods improved, and obstacles have started to melt. A large portion of the country already has cost-effective solar installations, and that area grows monthly. The key development for our communities will come in deploying that solar not on large farms away from the city, but in our undeveloped lots, on our open rooftops, and within our building structures.
The way to capitalize on these strategies and technologies in a way that promotes community development revolves around legal tools called performance contracts and power purchase agreement. In these legal arrangements, an entity (more on who later) pledges capital to a project, a contractor and designer implement the project to save a guaranteed amount of energy (performance contract) or produce a guaranteed amount of energy (power purchase), and building owners agree to pay utility bills equivalent to their current conventional usage until the investor has recouped their capital. The manner that this can help community economies is this:
- The investor is a community bank, using investment tools that maximize capital pledged by members of the community.
- The contractors and designers come all, or mostly, from businesses within the community.
- The community building owners receive the maximum benefit when the contract ends and their energy bills drop dramatically.
As we saw in the previous posts, a typical community can have around $40 million a year they pay for energy. Capitalizing that over five to fifteen years gives us between $200 and $600 million that can be invested to make the improvements noted above. Done piecemeal, this can deliver slow and sporadic savings, but done aggressively, it can provide an opportunity for rapid and sustainable improvement in quality of life.
In order to accomplish this, we will need the help of government and industry. Investors will only risk capital if they know that the payments will continue, even if the present homeowner sells. We can accomplish this through several means: property assessed clean energy (PACE) and on-bill financing. PACE allows homeowners to pay for improvements through an additional assessment on the property taxes, and when they transfer the property, the next owner continues the assessment until the payments are complete. In on-bill financing, the same happens except through the utility account associated with the meter at the property. Either way, we mitigate some of the risk associated with the transaction. Currently, only utilities and municipalities (or similar units of local government) have the size to adequately handle the mitigation.
With an additional $40 million per year in potential, we can create much economic growth in our communities. If we can extend this to our transportation energy as well, we can affect another $70 million. Energy has given us an enhanced quality of life, and it can do it again...except this time, only if we are smarter with it.
In order to accomplish this, we will need the help of government and industry. Investors will only risk capital if they know that the payments will continue, even if the present homeowner sells. We can accomplish this through several means: property assessed clean energy (PACE) and on-bill financing. PACE allows homeowners to pay for improvements through an additional assessment on the property taxes, and when they transfer the property, the next owner continues the assessment until the payments are complete. In on-bill financing, the same happens except through the utility account associated with the meter at the property. Either way, we mitigate some of the risk associated with the transaction. Currently, only utilities and municipalities (or similar units of local government) have the size to adequately handle the mitigation.
With an additional $40 million per year in potential, we can create much economic growth in our communities. If we can extend this to our transportation energy as well, we can affect another $70 million. Energy has given us an enhanced quality of life, and it can do it again...except this time, only if we are smarter with it.
Part 1: Economy...We have found it more efficient to use cheap energy to deliver our quality of life.
Part 2: Energy...Our relationship with energy drives a loss of stability, and can just as easily restore it.
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