By Eden Greenberger, Summer Associate
The recent California wildfires serve as a stark reminder of the dangerous effects of climate change on our environment. Due to climate change, our warming ocean are already rising. We’re experiencing all-time high summer temperatures. And you can now begin to see the wildfire dominos begin to fall.
- The wildfires cause nearby land ice to melt more rapidly. As a result, less ice means a weaker cooling effect on land temperatures. This only compounds the worldwide shrinkage of our land ice and polar caps.
- Smoke and ash from the fires have affected air quality throughout California and beyond.
- The loss of nearly 130 million trees has profound repercussions on erosion control.
- There are now that many fewer trees taking deadly carbon out of our air.
- The ecosystem that once thrived in these forests is now destroyed.
And dominos continue to fall.
In the midst of this firestorm, U.S. environmental policy continues to unravel. Our current administration has pulled out of the Paris Climate Accord and rolled back many important Obama administration environmental protections. We have turned a blind eye to climate change. As a result, our nation is actually aiding and abetting the inevitable disasters that affect lives worldwide.
California Fights Back.
Fortunately, California isn’t limiting its environmental actions to putting out the wildfires. It is also flexing its muscles as a national leader in environmental policy and stewardship.
One of its initiatives focuses on renewable energy and energy efficiency in buildings throughout the state. California’s 2015 Clean Energy & Pollution Reduction Act (SB 350) commits to increasing the state’s renewable energy mix to 50% and doubling the energy efficiency of existing buildings by 2030. Currently, there is a bill before the state Senate that ups that commitment to 65% renewable energy by 2030 and 100% by 2045.
California is further committed to sharing lessons learned from this and other efforts nationally so that other states can adopt comprehensive climate and energy policies that are not only good for the environment, but also essential drivers of the economy.
Finding the Capital for Energy Efficiency.
Clearly, it takes money to design and construct environmentally efficient buildings. For new construction, developers build sustainability measures into their pro forma and account for the cost in their initial loan. Thus, they immediately benefit from their expected utility savings. For those who look to retrofit efficiency measures into existing buildings, it’s not as easy. Any new capital is incremental to the debt of their existing loan. Take an office building or multi-family housing owner for example. To attract additional capital, they might have to raise rents to account for the additional debt service.
While this retrofit strategy can work for many such property owners, it doesn’t work for everyone. Multi-family, affordable housing property owners can neither raise their rents, nor take on the risk of a loan or lien on their property. Capital for energy and water efficiency isn’t easily available to this segment.
Unfortunately, the inability to perform retrofits in these buildings becomes an even bigger issue. Many of the properties are in neighborhoods with aging infrastructure and increased vulnerability to climate related outages. Without improvements, they seem destined to decreasing energy efficiency. Add to that the burden of ever rising utility costs that already stretch resident budgets. It’s bad news for the residents and for the environment.
A Story about an Effort to Leave No One Behind
Mercifully, the problem has been addressed through a collaboration of four socially minded organizations:
- Mercy Housing, California’s largest owner and manager of multi-family, affordable housing,
- Affordable Community Energy Services (ACE), a Risk-Free Energy Service Company (RESCO)
- Bright Power, a leader in energy analysis, general contracting, maintenance, resilience and measurement.
- Reinvestment Fund, a social impact lender helping those who might otherwise not have access to capital to make positive social change.
These four organizations have come together to fund and manage widespread energy and water efficiency retrofits for a significant portion of the Mercy Housing California portfolio. That includes nearly 90 properties and 6,000 units. And no property has to take the risk of a loan or lien. It’s a solution that brings a forgotten and important segment of housing into the current movement toward energy efficiency and environmental stewardship.
As a result, over the 10-year period of this project, Mercy Housing expects to reduce utility consumption somewhere in the area of:
- 1 million kWh electricity
- 23,000 therms natural gas
- 32 million gallons of water
It’s a significant contribution on many levels to California’s social and environmental leadership. It helps fuel a movement that has room to grow throughout California and beyond.
ACE (Affordable Community Energy Services Company) is a Risk-Free Energy Service Company (RESCO). ACE brings broad-based energy efficiency, water conservation and renewable energy improvements to the vastly under-served owners and residents of affordable housing. ACE is currently working with Mercy Housing in California, one of the nation’s largest affordable housing nonprofits. For more information about ACE, please email Dan Greenberger email@example.com
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