Energy efficiency and the Solyndra effect

Not so long ago the green energy movement celebrated because President Obama used words like ‘renewable energy’ and ‘climate change’ in his inaugural speech. It wasa first for a US president.

Now comes the downside of being a political darling.

Opponents of green energy – or rather opponents of its proponents – are using the collapse of California solar manufacturer Solyndra as weaponry. As Scott Sklar of The Stella Group said in his recent blog, “With politicians throwing brickbats at each other, the green industries are right in the middle dodging these projectiles.”

Sure, Solyndra doesn’t embody the state of the green energy industry – it’s just one company. But the average person rushing to work hears only the thud of the brickbats… something about solar and financial collapse, scandal, expensive green energy and wasteful government spending. They are left with the impression that something is amiss with the world of green energy.

How will this affect the energy efficiency industry?

Energy insiders are quick to point out that in the scope of energy failings, the Solyndra collapse is small. And, of course, solar and energy efficiency are two different industries, even if both are ‘green.’ But those are fine points that most people miss, as they pick up only the background noise about the Solyndra collapse.

That’s the bad news for energy efficiency; the good news is that the industry has been getting a tremendous amount of positive press lately, and it may counter the Solyndra effect. Those reports leave the busy person rushing to work hearing something about energy efficiency jumpstarting a national market, creating jobs, and lowering electric bills. Consider some of this week’s news.

  • The New York Times reported Tuesday that Lockheed Martin and Barclays plan to invest up to $650 million over the next few years to retrofit buildings in Sacramento and Miami using Property Assessed Clean Energy financing.  The Carbon War Room put together the consortium, which the article said represents “the most ambitious effort yet to jump-start a national market for energy upgrades that many people believe could eventually be worth billions.” Interestingly, the deal also includes an insurance plan that backs the energy savings. Offered by Energi, such insurance is a relatively new product for the energy efficiency industry and one that could help projects secure financing.
  • Conservation Services Group, a national energy services firm, has signed more than $100 million in new, expanded and renewed contracts, much of it retrofit and weatherization work. The company says it is bucking the ailing economy. Since 2008 CSG’s employment has grown 68 percent, and its revenue has increased from $62 million to more than $100 million.
  • The American Council for an Energy-Efficient Economy found an “extremely” low default rate among energy efficiency loans in a report issued this week. The default rate hovered around 0-3% throughout the life of 24 loan programs studied. It remained that low even during the near collapse of the real estate market. Small commercial banks and credit unions do most of the lending, but bigger banks are now moving into the market. The loan market has barely begun to show its full potential, according to ACEEE.
  • And there is this quote from the New York Times review about Daniel Yergin’s new book, “The Quest: Energy, Security, and the Remaking of the Modern World.” The Pulitzer Prize-winner spends 800-pages exploring the energy industry, and in his conclusion “focuses on the importance of thinking seriously about one energy source that ‘has the potential to have the biggest impact of all.’ That source is efficiency.”  The Times goes on to say: “It’s a simple idea, he points out, but one that is oddly ‘the hardest to wrap one’s mind around.’ More efficient buildings, cars, airplanes, computers and other products have the potential to change our world.”

We will soon know whether Solyndra has any lasting influence on public perception or is a news cycle blip. If 10 percent of the population holds an unshakeable belief, a tipping point occurs, and the “idea spreads like flame,” according to a study by scientists at Rensselaer Polytechnic Institute reported by Intelligent Utility. The green energy industry has worked hard in recent years to capture public sentiment. Has it achieved the tipping point? Solyndra will be a test.

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