Change RegionGlobal WorkPlace... Capitol Hill
On 24 February 2009 Iain Campbell, Vice President and General Manager, North American Service and Global WorkPlace Solutions was invited by the U.S. House of Representatives Subcommittee on Energy and Environment to give testimony on behalf of Johnson Controls on the subject: “Energy Efficiency: Complementary Policies for Climate Legislation”. Following is an excerpt from Mr. Campbell’s testimony. For the full text click here.
As a world leader in providing energy efficiency products and services within commercial and industrial buildings, we believe we have a unique “on-the-ground” view of the opportunities and barriers to energy efficiency. We believe that complementary policies, including an Energy Efficiency Resource Standard, are a critical component of any effective and comprehensive climate change policy. These policies must focus on unlocking the vast energy efficiency potential within the existing commercial and industrial building market; it is our view that the performance contracting approach represents a proven and highly effective model.
Improvements on energy efficiency have rapid impacts
Compared to other climate solutions, energy efficiency improvements have rapid impacts. Efficiency projects don’t face multi-year lead times or potential delays due to community resistance or legal disputes. We don’t have to conduct long studies to build certainty that efficiency will indeed reduce emissions. We realize energy savings opportunities for customers in a few short months through whole-building retrofits. Energy efficiency resources available today can be the bridge fuel to the low-carbon economy we need in coming decades.
Barriers in the private sector
Barriers to adoption of performance contracting in the private-sector include the mismatch of incentives between property owners and tenants and the frequency of ownership turnover results in requirement for extremely short investment paybacks. To address this, we recommend establishing a program that would encourage large scale, deep retrofitting of privately-owned commercial buildings or portfolios of buildings. The program should provide incentives for efficiency improvements based on demonstrated energy reductions of no less than 20%. Increased incentives should be available to encourage 30% or greater reductions. The incentive would take the form of a rebate per square foot and would be provided to building owners, or their agents, on an annual basis after measurement and verification.
Another barrier is the availability of third-party financing because of the difficulty in using building assets as collateral to secure the loans. A loan guarantee, proportional to the targeted energy savings level, should be established to help attract capital from private sources to fund the improvements.
And lastly, finding and training workers to do the important work of improving energy efficiency within buildings is a central and significant challenge. It also represents a significant opportunity.
We at Johnson Controls strongly believe in the need to increase the nation’s focus and investment in energy efficiency. Energy efficiency should be the first priority in addressing climate change as a way of containing the cost of climate protection policies and creating new jobs. We need to focus on efficiency now…it’s never been more important.”
“Thank you for inviting us to introduce you to our company, and to share our perspective on complementary policies for climate legislation. As you consider options for addressing climate change, we hope this testimony will provide useful insights and recommendations.
In my role at Johnson Controls I am responsible for three businesses uniquely focused on driving energy efficiency. The first is our Technical Service business which focuses on maintaining, repairing and replacing building automation systems as well as heating, cooling and refrigeration equipment. Second is our Solutions business, focused on delivering deep energy savings at the whole-building level in a self-funding manner.
This work is typically delivered in what is known as “performance contracting”. We have been delivering performance contracting for over 20 years, with over 1900 projects executed, and $4B in energy performance guarantees, and over 11 million metric tons of GHG emissions avoided since 2001. The third business is Global WorkPlace Solutions which offers integrated facility management for Fortune 500 companies, managing massive property portfolios for our clients across the globe, focusing on providing the highest level performance using the fewest resources.
Complementary policies are criticalThis work is typically delivered in what is known as “performance contracting”. We have been delivering performance contracting for over 20 years, with over 1900 projects executed, and $4B in energy performance guarantees, and over 11 million metric tons of GHG emissions avoided since 2001. The third business is Global WorkPlace Solutions which offers integrated facility management for Fortune 500 companies, managing massive property portfolios for our clients across the globe, focusing on providing the highest level performance using the fewest resources.
As a world leader in providing energy efficiency products and services within commercial and industrial buildings, we believe we have a unique “on-the-ground” view of the opportunities and barriers to energy efficiency. We believe that complementary policies, including an Energy Efficiency Resource Standard, are a critical component of any effective and comprehensive climate change policy. These policies must focus on unlocking the vast energy efficiency potential within the existing commercial and industrial building market; it is our view that the performance contracting approach represents a proven and highly effective model.
Improvements on energy efficiency have rapid impacts
Compared to other climate solutions, energy efficiency improvements have rapid impacts. Efficiency projects don’t face multi-year lead times or potential delays due to community resistance or legal disputes. We don’t have to conduct long studies to build certainty that efficiency will indeed reduce emissions. We realize energy savings opportunities for customers in a few short months through whole-building retrofits. Energy efficiency resources available today can be the bridge fuel to the low-carbon economy we need in coming decades.
Barriers in the private sector
Barriers to adoption of performance contracting in the private-sector include the mismatch of incentives between property owners and tenants and the frequency of ownership turnover results in requirement for extremely short investment paybacks. To address this, we recommend establishing a program that would encourage large scale, deep retrofitting of privately-owned commercial buildings or portfolios of buildings. The program should provide incentives for efficiency improvements based on demonstrated energy reductions of no less than 20%. Increased incentives should be available to encourage 30% or greater reductions. The incentive would take the form of a rebate per square foot and would be provided to building owners, or their agents, on an annual basis after measurement and verification.
Another barrier is the availability of third-party financing because of the difficulty in using building assets as collateral to secure the loans. A loan guarantee, proportional to the targeted energy savings level, should be established to help attract capital from private sources to fund the improvements.
And lastly, finding and training workers to do the important work of improving energy efficiency within buildings is a central and significant challenge. It also represents a significant opportunity.
We at Johnson Controls strongly believe in the need to increase the nation’s focus and investment in energy efficiency. Energy efficiency should be the first priority in addressing climate change as a way of containing the cost of climate protection policies and creating new jobs. We need to focus on efficiency now…it’s never been more important.”
WORKPLACE NOW HOME
