The Green Column #2
Green Retrofits Would Stimulate Lincoln Economy
May 5 2009— Lincoln has a new green opportunity at this moment, with its share of the federal stimulus funding, to demonstrate in dramatic fashion how to reshape its economy for the future.
In this time of peak energy, experts have pointed out that the easiest barrel of oil to have available is the barrel saved through efficient uses. And we know that buildings, especially those residential buildings constructed before the 1980s, are the largest consumers of energy, as well as the largest source of carbon emissions into the atmosphere.
Lincoln, over the years has paid special attention to preserving its older neighborhoods and specific historic structures throughout the community. Many of these structures were built before the need and recognition of insulated, conservation-based construction technologies. Now, in today’s economy, with the rising costs of energy supplies, we have multiple reasons for careful assessment of upgrading and retrofitting these large energy consumers. What is the magnitude of the opportunity?
Follow along with these assumptions:
- LES reports that there are approximately 87,000 residential customers
- Assume that approximately 70% of the existing residential buildings are candidates for upgraded efficiency retrofits (approximately 61,000 residential units)
- Assume that a combination of stimulus, tax credits, LES subsidies and personal funds available for energy efficiency retrofits would average approximately $5,000/residential unit
- Also, assume that a modest, but reasonable target for community-wide energy savings would be 1.5% per year over 10 years (approximates Lincoln’s annual population growth rate)
- LES reports that the average residential customer pays about $70/month for electricity
- The payroll calculation assumes jobs at an average of $40,000/year
Lincoln’s Green Retrofit Opportunity: Existing Residential Buildings:
- 87,000 x .70 = 61,000 x $5,000 = $305,000,000 net revenue into the city over 10 years
- $70/mo x 12 x .015 x 61,000 x 10 yr = $7,686,000 (Aggregate household savings in electrical energy costs over 10 years)
- Assume that both the retrofit revenue, plus the household savings would ultimately accrue new sales tax revenue to the city: $305,000,000 + $7,686,000 = $312,686,000 x .015 = $4,690,000 sales tax income
- Potential jobs created: $312,686,000 divided by $40,000 divided by 10 yrs = 782 annual new jobs
These assumptions do not account for additional net savings from gas-based energy systems, or for net energy savings from commercial and institutional buildings that would also experience weatherization retrofits. Aggregately, these steps could set the standard for all private retrofit and renovation construction in the city for years to come.
Additionally, the potential adoption of a citywide green municipal building program would even further increase the returns to Lincoln’s sustainable future. Numerous cities across the nation have adopted requirements for all public buildings to achieve minimum U.S. Green Building Council LEED standards for energy, materials, water and indoor health, for both new and renovation construction.
Admittedly these are assumptions of the possible, but we strongly believe that the timing is optimal for a confluence of resources, local expertise and new conservation-based principles of materials selection and design. Catching this wave of opportunity could lead Lincoln into one of the greenest, most sustainable consumption profiles in the nation.
Better design, green-supported financing, and good trades and materials decisions will lead Lincoln into more jobs, a stimulated economy, and better emissions control, as well as conserved energy and precious materials. Other communities have already experienced new growth and new residual economic opportunities specifically because of similar programs.
And by the way, under these assumptions, our publicly owned LES (we) would not need a decade from now to build another $150 million power plant, saving more public funds and eliminating more than 9,000 tons/year of coal-fired emissions.
For the sake of sustainability, not to mention the new local economy, we cannot afford to miss this opportunity.
© Lincoln Green by Design