Cliff Majersik, IMT, Identifies Efficiency as Energy’s Biggest Asset

The Institute for Market Transformation (IMT) is a Washington, DC-based nonprofit working in the areas of energy efficiency, green building, and environmental protection. Much of IMT’s effort goes toward correcting inadequacies in the construction/remodeling vertical that prevents investors from taking a stake in energy efficiency and sustainability in the United States.

Cliff Majersik, Executive Director, referred in this interview to a guest post in another clean tech blog which details the 2013 end of a former U.S. – Russian nuclear energy program called Megatons to Megawatts.

As Majersik points out, the diminution of nuclear fuel stocks is not as disconcerting as it initially seems on paper, even though nuclear energy now provides about 20 percent of America’s electrical energy. The reason is simple: where nuclear energy historically leaves off, energy efficiency takes over.

This, as noted by John A. Laitner, a researcher at the American Council for an Energy-Efficient Economy (ACEEE), has been the case since 1970. In fact, Laitner observes, efficiency has met 75 percent of new service requirements in the nation.

For Laitner, the information is a selection of graphs and charts. In layman’s terms, between 2004 and 2010, the U.S. upped its energy efficiency spending by 80 percent, or about $574 billion in 2010. In that same year, energy providers spent 170 billion on infrastructure, but investment in energy efficiencies topped $90 billion, or more than half that amount.

Majersik stresses the importance of efficiency.

“The fact is that (since 1970) our economy has fundamentally transformed. Everyone used to drive around in clunkers that got 15 miles to the gallon, and everyone used to live in homes that were completely uninsulated and had incandescent lights and antiquated leaky ductwork serving furnaces and air conditioning.

“That has changed, and as a result energy use occupies a far smaller portion of the overall economy, even as population rises and engineering develops more and more products which run on that energy use.”

Majersik hesitates to pinpoint the largest area of potential future energy conservation, but suggests that buildings, both commercial and residential, are the likely – if often unsung – heroes.

“But don’t ignore the whole landscape. Homes, businesses, offices, cars, heavy vehicles, and industry; all have become more energy efficient.”

On a city-by-city basis, Majersik favors New York City, and is it any wonder given its energy conservation policies from benchmarking through mandatory sub-metering for large tenants? Not to mention the mandatory audits that provide information to occupants, building departments, energy providers and a host of other interests on the real cost of energy. New York even has retrocommissioning – a long name for a building “tune-up” which evaluates the total structure and suggests ways in which owners and landlords can increase efficiency without breaking the bank.

Tack on a mandatory decadal lighting upgrade, from incandescents to compact fluorescents, or CFLs – and then one more step to the LED technology that is taking the industry by storm – and you have one of t he world’s biggest cities sipping energy instead of gulping it.

The  result? New York now spends considerably more money on people, by making buildings more comfortable, than it does on energy, which often has to be imported, at considerable expense and without the attendant job creation if the same energy were generated in the U.S.   

Even so, there’s a long way to go. Majersik points to mortgage underwriting, which may evaluate the thickness of the glass doors in front of your future home’s fireplace, but not the thickness of the insulation in the attic.

“At the federal level (Fannie Mae or Freddie Mac),  mortgage loan guidelines tell the lender to look at the potential borrower’s income, credit score, mortgage payment, home insurance and real estate taxes.  They do not look at the new home’s potential energy bills, even though those bills are larger than either insurance costs or property taxes.”

Not surprisingly, an IMT-generated study has shown that people who choose energy efficient homes are better at paying their mortgages in a timely fashion. This might simply be the result of having more money in their bank accounts after the energy bills are paid. But it might also tie in to their higher sense of what is good for the planet.

Whatever the cause, these eco-neighbors are 32 percent less likely to default on their mortgage, and 25 percent less likely to prepay a mortgage – which is good for homeowners, but bad for lenders.

Majersik sums it up:

“By not factoring energy efficiency into mortgages, we are under-investing in energy efficiency. This initially provides hopeful homeowners fewer options for financing. It also forces them to eventually deal with their energy-hog dwellings as the price of electricity skyrockets on the back of natural gas supplies (which peak oil supporters say was reached in the 1990s).”

This dealing is prohibitively expensive. While a builder can buy and install solar panels and efficient windows at a discount from retail because they buy in bulk, a homeowner will be forced into top-dollar negotiation or into less energy efficient alternatives, whether windows,  solar panels, or an Energy Star furnace and air-conditioning unit.

“More than 90 percent of new mortgages are issued following federal mortgage underwriting guidelines.” Majersik notes.

But that is changing, as people from all walks of life and all lifestyles see the looming danger in an earth overheated by burning fossil fuels. In fact, it would be fair to call these initial decades of the 21st Century “The Race to the Finish”, as clean energy technologies struggle to replace a century’s worth of fossil-fuel excess before we pass the climactic point of no return.

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