US Retrofits could yield $1 trillion of energy savings and
create 3.3 million job years; new financing models can unlock this
GLOBE-Net, March 6, 2012 - DB Climate Change
Advisors (DBCCA) and The Rockefeller Foundation have released a
research study which examines the potential size and investment
opportunity of upgrading and replacing energy-consuming equipment
in US real estate.
The paper, entitled, "United States Building Energy Efficiency Retrofits:
Market Sizing and Financing Models," highlights this investment
opportunity, with the potential for significant economic, climate,
and employment impact. DBCCA is the climate change investment and
research business of Deutsche Bank's Asset Management business.
The report estimates that upgrading and
replacing energy-consuming equipment in buildings offers an
important capital investment opportunity, with the potential
for significant economic, climate, and employment
In the United States alone, more than $279 billion could be
invested across the residential, commercial, and institutional
market segments. This investment could yield more than $1
trillion of energy savings over 10 years, equivalent to savings of
approximately 30% of the annual electricity spend in the
If all of these retrofits were undertaken, more than 3.3 million
cumulative job years of employment could be created. These
jobs would include a range of skill qualifications, and would be
geographically diverse across the United States. Additionally,
if all of these retrofits were successfully undertaken, it would
reduce U.S. emissions by nearly 10 percent.
Judith Rodin, President, The Rockefeller Foundation, noted
"buildings consume approximately 40% of the world's energy and are
responsible for 40% of global carbon emissions. However, proven
technologies to retrofit buildings can both conserve energy and -
even more importantly in these difficult economic times - have the
potential to create a large number of jobs. With the release of
this new report, outlining both the investment and job
opportunities, I am increasingly hopeful that this market can
achieve its full potential."
Mark Fulton, Global Head of Climate Change Investment Research
for DBCCA, stated "We believe that the emerging Energy Service
Agreement financing structure offers significant near term
potential to scale quickly and meet the needs of both real estate
owners and capital providers in the commercial and institutional
market, without the requirement for external enablers such as
regulation or subsidy."
In this report, DBCCA and The Rockefeller highlight that
mature and proven technologies, designed and manufactured
by established multi-national firms, can save energy and yield
significant returns when replacing older, less efficient systems.
However, the apparently simple act of upgrading and replacing
equipment in buildings - from upgrading lights to
replacing heating and cooling systems, or replacing building
controls - has never achieved its full potential.
In order to provide a clear understanding of this
opportunity, the report seeks to establish the potential
size of the retrofit market in the United States and
examines the emergence of new financing models that offer the
promise of overcoming historical barriers and unlocking the
true potential of this market and to overcome both the supply
and demand side barriers.
- ~$279 billion could be invested in
retrofitting the residential, commercial, and institutional market
segments in the US.
- This investment could yield more than $1 trillion of
energy savings over 10 years, equivalent to savings of
approximately 30% of the annual electricity spend in the United
- If all of these retrofits were undertaken, more than 3.3
million job years could be created.
These jobs would include a range of skill qualifications, and
would be geographically diverse across the United
- Additionally, if all of these retrofits were successfully
undertaken, it would reduce U.S. emissions by nearly 10%.
With respect to an enabling policy environment for overall
market development, the study suggests that policymakers consider
- Mandates (targets) that set comprehensive energy efficiency
- Disclosure and benchmarking laws, such as those implemented in
New York City or voluntary systems such as proposed by
- Leadership by example. Government can lead by example by
using its existing assets (e.g. GSA properties) to test emerging
financing models and prove out different approaches, as it did with
the LEED standards.
- Subsidies, incentives and guarantees to 'de-risk' energy
Utilizing the work done by the World Economic Forum as a
reference point, the report profiles these models, including the
Energy Services Agreement (ESAs), Property Assessed Clean Energy
(PACE) and On-Bill Finance (OBF), in addition to examining the
largest historical provider of energy efficiency upgrades, the
Energy Services Companies (ESCOs).
The study is available for download here