In any city, the
business sector is a major user of energy, and thus an emitter of
greenhouse gases (GHGs). There is a great deal that businesses can do
to reduce their emissions profitably, but businesses, especially the
small businesses that are the backbone of any community’s economy need
help to capture these opportunities. Most small businesses give little
thought to how they use energy, have few resources to help them reduce
their energy bills, and are reluctant to devote scarce management time,
or scarcer funds to implementing significant changes in the way they do
around the country are implementing programs to help their business
community become more energy efficient.
One of the
easiest programs to encourage a business to implement is a lighting
retrofit. The U.S. Environmental Protection Agency (EPA) offers the
ENERGY STARÒprogram to help business
people cut their use of energy.
It works with local partners to help businesses implement lighting
retrofits and other energy savings programs. The following example is
described on the ENERGY STARÒ website:
owner Joel Whitaker added $800 per year to the bottom line of Whitaker
Newsletters by installing more energy efficient light bulbs in the 24
fixtures in his 2,000 square foot office. The cost was partly financed
by his local utility, an ENERGY STARÒUtility Ally, and partly by savings on his electric bill. The upgrades
paid back in less than two years. After that even this very small
office started saving almost $800 per year.
utility, Public Service Electric & Gas (PSE&G), sent him a flyer about
energy efficient. Soon after calling the utility's 800 number, he
signed a Memorandum of Understanding with EPA. Mr. Whitaker had
previously called a local electrician to learn more about lighting
efficiency, but found he knew more than the electrician. EPA's
Financing Directory guided Whitaker to Atlantic Lighting and Supply Co.,
an ENERGY STARÒDistributor Ally. Atlantic surveyed his space for free and provided
specifications, a cost analysis, and an environmental analysis. This
process took Atlantic less than one hour. Atlantic included PSE&G
rebates in their economic analysis and predicted the payback.
applied for financial assistance. Atlantic agreed to finance more than
half of the upgrade cost. Whitaker simply repaid Atlantic with the
savings from its electric bill, including signing over the rebate check
it received from PSE&G. Once Atlantic
delivered the project materials, Mr. Whitaker contracted a different
electrician he found listed on a church flyer to install them. The
entire upgrade process, from survey to installation, took a little over
a month. "Our lighting upgrade," Mr. Whitaker explains, "was a piece of
cake: the financing was easily handled, and we got a local electrician
to install everything. It was really no sweat."
upgrade, Whitaker Newsletter's 24 fixtures were inefficient T-12
florescent lamps with magnetic ballasts. Such fixtures are common in
small businesses. The electrician had never before
performed this type of lighting upgrade, but the straightforward
directions make installation of 24 energy-efficient T-8 florescent lamps
with electronic ballasts easy. Although the number of lamps per fixture
was decreased, the employees thought the lighting was improved. And the
improvement in lighting color gave the office a nice glow.
revamped one exit sign from incandescent to LED, an upgrade that
increased the lamp life from 9 months to 50 years. This is especially
important to Whitaker, since the local fire inspector had, in the past,
warned the company about a burned-out exit lamp.
Mr. Whitaker was
particularly impressed with the pollution prevention equivalency
information supplied by EPA. His employees were impressed that he had
done something good for the environment. Mr. Whitaker was so happy with
the results of his lighting upgrade that he convinced a local
municipality and a local school district to upgrade their facilities.
He also helped PSE&G publicize energy efficiency programs by
participating on the radio spots.
ENERGY STARÒhelps businesses with energy efficiency information about lights and
appliances, buildings and facilities, manufacturing, retail operations,
and much more.
The building sector
is the major consumer of energy in the U.S, using over one third of all
energy and two thirds of electricity.
Yet it is cost effective to fix up almost any existing building to use
dramatically less energy. New buildings can be 10 times more efficient
than an ordinary building, existing ones three fold more efficient.
Many businesses own their own building, but the majority rent space in
someone else’s building. Programs to reduce the carbon footprint of
buildings need to address both owner-occupied spaces and rental space.
As described in the
municipal building section of this chapter, many cities have made it
mandatory to perform energy, waste and water audits on their municipal
buildings. Because of these audits, cities have retrofitted numerous
buildings, updating technology and capturing financial savings. Many
communities support their businesses in conducting their own audits and
making retrofits and updates to their buildings, but all should do this.
Energy Trust Building tune-up and operations program
operates on the premise that buildings are like cars; they run
most efficiently when they are properly cared for and
periodically tuned up. The Energy Trust of Oregon, Inc.,
a public purpose organization helping Oregon citizens increase
energy efficiency and renewable energy generation, enables businesses to receive subsidized tune ups by
qualified technicians to help save on energy costs and
ultimately, carbon emissions.
The program is available to owners of large
commercial buildings, and focuses on boiler and whole building
tune-ups. On average, the program saves 10% of energy costs
The Energy Trust expects to save about 300,000
therms and 6,700,000 kWh through this program annually, enough
electricity and gas to heat about 1,000 homes in the Portland area
for a year, and prevent the release of a significant amount of
carbon. If a building qualifies, the city will provide the
Provided by Program, in collaboration with Service
Provider when applicable
Custom incentive ranging from $0.05 - $0.10 per
square foot, paid to Service Provider
Up to $2,000, paid to Service Provider
Up to $0.03 per square foot, applies to measures
with a simple payback of longer than one year, paid
Up to $4,500, paid to Customer
has significant programs to encourage the use of renewable
resources by businesses. For instance, the biofuels program
supports businesses that seek to create energy through the use
of biofuels available in the state of Oregon.
These fuels include, but are not limited to landfill gas, energy
crops, and solid fuels based on residual material from forestry.
Energy Trust provides 100% of operating costs for
the program to make it viable for a business. In addition, they
will also provide assistance with initial feasibility studies.
Energy Trust also provides incentives of 35% of the
system cost for businesses to install solar energy systems.
During its first year, this program provided $1.4 million in
incentives for 126 different
projects. Energy Trust also provides similar incentives for
businesses to install solar water heaters.
Anaheim, California has developed
a program to retrofit required exit signs in buildings with
efficient light-emitting diode (LED) or photo luminescent (glow
in the dark) technology. Estimated savings per exit sign is
at least 90%. Because these
signs must be on 24 hours a day, 7 days a week, and are required
of all public buildings, the reduction can represent a
significant energy decrease over a year.
The city subsidizes the cost of
retrofit at 50% of the total cost, or $30 per fixture, whichever
is less, at a total cost of up to $10,000.
Savings Achieved by Converting to LED Lighting Technology
5 Exit Signs
50 Exit Signs
100 Exit Signs
Energy Savings on Incandescent Lamps
(based on 50 total watts)
One-time Incentive Amount
8,740 annual operating hours for old and new exit lighting system.
Two watts to operate LED lighting.
$0.10 composite kWh cost used for purposes of this illustration; your average energy may vary.
Anaheim Public Utilities
There are more than
76 million residential buildings and nearly five million commercial
buildings in the U.S. today. By the year 2010, another 38 million
buildings will be constructed. It is possible to make buildings that
use little or no non-renewable energy, yet are far more comfortable and
affordable. Such buildings,
called “green buildings” are healthier to live and work in, enhance the
productivity of workers and enhance the security of the community.
Cities can encourage developers to build using energy efficiency
standards, even if no regulations are in place.
Many incentives to
encourage developers to use best practices require little investment for
the city. For example, cities can offer:
processing for builder/ developers who propose low-carbon projects
recognition for developers who use energy efficient, or renewable energy
The following cases
provide examples of effective incentives being utilized by
municipalities to encourage businesses to increase the efficiency of
Flower Mound, TX
Green Building Program offers free advertising and referrals if
builders comply with the town’s criteria for more energy
efficient green buildings. By voluntarily complying with green
building criteria set forth by the town, participating
contractors can display a certification emblem in their
advertising and get free publicity on the town’s website.
In order to
qualify, participants must use a minimum of 30 best management
practices from the town approved list for each project, as well
as meet the following minimum practices:
projects must be at least 25% more efficient than the guidelines
set forth by current International Energy Conservation Codes.
be LEED certified and demonstrate continuous compliance of those
construction begins, builders must submit a waste reuse,
recycling and reduction plan to be agreed upon by the city.
paving requirements not directly pertaining to carbon reductions
This program is
an easy way to promote efficient building design with minimal
use of public funds.
Arizona has implemented a program to promote the building of
more energy efficient and solar energy fueled buildings within
the municipality through a series of economically enticing
First, if a builder submits a qualified proposal for a green
building, the permit process is expedited through the city’s
fast track plan review process. In other words, green building
projects will receive permits in roughly half the time of regular
projects, thus promoting green design from the beginning.
Builders incorporating solar energy into their
projects are eligible for a 25% tax credit for the cost of the
solar energy system. In addition, the city will provide signs
to go up at the job site to let the surrounding community know
of the project’s environmental benefits.
Participating architects, designers and builders are
also offered free promotional space on the city website and in
green building information packets that are distributed at
various events and through the mail.
Green Building Program
San Diego, CA
instituted a Green Building Incentive Program
to increase voluntary commitments to energy and resource
efficient design. The program requires compliance with at least
one of three resource conservation measures. The requirements
assist builders and developers in reducing GHG emissions through
increased recycled content or meeting energy efficiency
To qualify for
the incentives, the project must comply with one of the resource
conservation measures listed:
Recycled Content: A builder would be eligible for the incentive
program by doing one of the following
- Show that 20% or more of primary building materials being used contain, in aggregate, a minimum weighted average of 20% post-consumer recycled content materials (reused materials count as 100%).
Show that at least one primary building material (such as roofing) is 50% or more post-consumer recycled content.
Straw Bale Construction: New buildings using baled straw from harvested grain for the construction of the exterior walls will qualify for the incentives.
The installation of a graywater system in new or renovated
buildings will qualify for the incentives. Graywater is the
wastewater produced from bathtubs, showers, and clothes
washers. In order to conserve water, it can be used for
irrigation through subsurface distribution systems. A permit
is required from the Department of Environmental Health for the
offers incentives of reduced review process turnaround time,
saving approximately 7-10 days, a 7.5% reduction in plan check
and building permit fees for projects meeting program
requirements and no fees for the building permit and plan check
of residential photovoltaic systems.
151 East Carmel Street
San Marcos, CA 92078-4309
El Cajon Office
200 E. Main St.,
El Cajon, CA 92020-3912
Many cities have
energy efficiency standards for their own buildings and have set a good
example of how energy efficiency retrofits can pay back costs. Cities
should extend these standards to commercial buildings.
The types of codes used to encourage
energy efficiency standards can be categorized into two categories: Prescriptive and
Performance codes set a mandatory target for the building to meet.
These codes drive innovation for building developers, architects,
contractors, etc. by allowing them to decide how to meet set targets.
For example, builders must determine the best way to meet Santa Monica’s allowable energy budget for multi-family homes
Prescriptive codes establish specific requirements for materials: for
example, efficient boiler and furnace units with a minimum combustion
efficiency of 80%.
The following case
studies demonstrate how cities and states are setting energy efficiency
standards using both prescriptive and performance codes.
Santa Monica, CA
green building requirements were designed to increase
sustainability without putting excessive burdens on builders or
developers. Many of the measures have some higher initial cost,
though others can actually reduce first costs and operating
costs. However, all of them increase the overall value of the
The basis for
the green building code is found in the following two
performance based Ordinances and the Municipal Code
Green Building Ordinance
This city Ordinance establishes prescriptive energy-saving
measures for small residential projects, and energy performance
targets beyond Title 24 for all commercial and larger
provides a design adviser to assist developers in understanding
the process, what they must do to comply, what they should be
doing to achieve a greater design and strategies to assist in
Building Program Advisor
1212 5th Street,
First Floor Santa Monica, CA 90401
State of California
California has developed a list of possible energy efficiency and
sustainable building measures that builders should use to comply
with state building codes.
These checklists (Tier 1 and Tier 2) are
updated annually and attached to the Department of General
Services' Standard Contract for Architectural and Engineering
Services, Exhibit C.
The items on Tier 1 have been evaluated as “cost effective” and all are recommended for
inclusion in building designs. Tier 2 items may or may not be
cost effective, but should be considered for inclusion in
projects. Both checklists are submitted at the completion of
the preliminary plan phase.
The checklists include a few performance standards, but are more
prescriptive in nature.
These prescriptive codes provide direction for California builders about the minimum measures needed to meet
energy efficiency codes.
After reviewing the
community’s GHG baseline inventory, it is important to identify any
businesses that emit higher levels of GHGs through their operations. If
these businesses are present within the boundaries of a city, addressing
these emissions is a critical means of managing emissions in the
In several states,
power plants’ emissions are already or will soon be regulated at the
state level in the near future. Until recently, the state of Oregon and
Massachusetts were the only states to have CO2 standards for power
However, several Northeast and Mid-Atlantic states have
initiated a Regional Greenhouse Gas Initiative to regulate the carbon
dioxide emissions of power plants in the region. Under Assembly Bill
32, California will begin regulating emissions from businesses and power
plants in California and even power plants outside the state that wish
to sell into California. These regulations will soon influence power
plants, but not other high emitters in the region.
to reduce emissions without or beyond regulations can create their own
incentives or encourage high GHG emitters to commit to a variety of
voluntary reduction programs and networks. For example, the EPA Climate
Leaders program helps, “companies to develop long-term comprehensive
climate change strategies,” such as
developing GHG inventories and reduction plans.
Similarly, The Pew Center's Business Environmental Leadership Council
is an association of corporations working together to address the
challenges of climate change.
In addition to the
resources listed below, such programs as the EPA Climate Leaders and the
BELC websites, illustrate state and utility initiatives to work with
large commercial emitters.
banks have begun to put pressure on their major clients who have
significant carbon footprints. JP Morgan Chase recently issued a
statement to their clients that any who were significant emitters should
put in place a plan to reduce emissions. This followed similar programs
by Bank of America Corp and CitiBank.
State of Oregon
In 1997, the
Oregon Legislature gave the Energy Facility Siting Council
authority to set carbon dioxide emissions standards for new
of the Council’s rules, beginning at OAR 345-024-0500, there are
specific regulations, known as the Oregon Standard for CO2, for
base load gas plants,
non-base load (peaking) power plants and non-generating energy
facilities that emit carbon dioxide.
are as follows:
load gas plants
lb. CO2 / kWh
Non-base load gas plants
lb. CO2 / kWh
lb. CO2 / horsepower-hour
for base load gas plants applies only to natural gas-fired
plants. The standards for non-base load plants and
non-generating facilities apply to all fuels. The Council has
not yet set carbon dioxide emissions standards for base load
power plants using other fossil fuels. Rules allow base load
gas plants that have power augmentation equipment to meet both
the base load and non-base load standards for the respective
parts of the plant. The definitions for the facilities are in
calculations for compliance with the standard account for the efficiency of
the facility. Generating plants have the option of offsetting
part or all of their excess carbon dioxide emissions through
discretion, applicants can propose carbon dioxide offset
projects they or a third party will manage, or they can provide
funds via the "monetary path" to the
The Climate Trust.
The Council recognizes The Climate Trust as a "qualified
organization," as defined in
(ORS 469.503). This definition
appears also in Council
(OAR 345-001-0010(45)). The Climate Trust takes responsibility
for obtaining offsets when an applicant uses the "monetary
path." Once a site certificate holder has provided adequate
funds to The Climate Trust, it has met its obligations under the
carbon dioxide standard.
While the Oregon
Standard has helped the Northwest become more climate friendly
at the regulatory level, Seattle,
Washington’s public utility, Seattle City Light demonstrates how
a utility can engage in voluntary emissions reductions. The
utility is on the leading edge of climate protection by managing
its own emissions, as well as working with other businesses in
the city to reduce emissions.
In 2005, Seattle City Light announced that it had reached
its goal of becoming “carbon neutral”, meaning having
no "net emissions" of GHG. The utility has a natural advantage for
reducing emissions; last year over 90% of its electricity came
from hydroelectric dams. Another 4% of electricity originated
from nuclear plants and the remaining electricity was generated
from wind farms and natural gas- and coal-fired power plants.
Despite the high percentage of renewables in its portfolio, it
is still responsible for releasing about 200,000 metric tons of carbon
dioxide each year. To claim no "net emissions" of GHG Seattle
City Lights pays to offset (see Chapter 5Infrastructure section)
its emissions by investing in activities that reduce GHG
For example, the city has spent up to $756,000
purchasing offset credits generated by activities such as
converting city vehicles and buses to a mix of diesel and
biodiesel and concrete plants to a cleaner manufacturing
While claiming these offsets, the city notes the importance of
being proactive while also “transparent and accountable.”
Seattle City Light also operates the Climate
Wise Program, which encourages local voluntary businesses and
institutions to combat global warming. According to the
. . . partners assess their business opportunities, invest in
new, more efficient equipment and practices, and share these
achievements with peers and the public. As leading companies
know, environmental performance provides a competitive edge.
Partners in the project agree to identify and
implement practices that reduce GHG; complete, update, and
strive to improve upon a Climate Wise Action Plan; and inform
others about Climate Wise activities.
Members of the Climate Wise include several companies with
typically higher emissions businesses, such as Ace Galvanizing,
The Boeing Company and the cement producer LaFarge Corporation.
Climate Wise Partners
emissions of large corporations is essential in mitigating GHGs, but the
role of smaller businesses is also important and is often neglected. As
the story of Joel Wittaker at the beginning of
this chapter shows, with proper incentives small businesses can save
money on energy costs and significantly contribute reducing greenhouse
gases in a community.
The objective of the city run “Smart
Business Program” is to encourage businesses to convert old lighting fixtures to
newer, highly energy efficient technology through city rebates
on retrofit costs. Interior lighting can sometimes account for
up to 60% of a small business’ energy bills. Replacing
inefficient lighting with newer technology can thus deliver
large energy savings. In addition, better lighting can promote
increased worker productivity and a safer working environment.
Seattle offers the program to small businesses that are not part
of an institution, chain or campus. One eligible business, a
glass company, replaced their T-12
fluorescent lights with technologically superior T-8 fluorescent
lights. The retrofit dramatically increased light levels,
increased productivity and decreased the electricity bill,
resulting in a happy businessowner and decreased reliance on
grid energy. This particular client’s overall bill for the
retrofit was $6,291. With a smart business rebate of $4,380,
the overall cost to the client came to $1,911. Given the
estimated annual savings from the retrofit of $1,170, this
client’s retrofit is expected to pay for itself in just over a
year and a half.
In 2005, the Smart Business Program served 364 small businesses
and achieved a yearly energy
savings of 4,113,135 kWh, or 11,300 kWh per business. The
ratepayers of Seattle’s publicly owned power utility, Seattle
City Light, fund the program. Seattle City Light seeking to
diversify into other renewable energy sources in the coming
years. In 2000 they sold 8% of their holdings in the Centralia
coal fired plant in a step toward decreasing carbon emissions.
California Department of Energy provides information on incentives in the areas of Energy,
Water, Materials, Siting, Green Building, Landscaping
and Transportation. This list will be updated quarterly and does not
claim to contain all existing funding options. If you know of a
financial assistance program that is not on this list or should no
longer be on this list then please contact:
[email protected] or
including conservation, efficiency, renewables, self-generation and
including conservation, effiency and re-use.
including brownfield redevelopment and "Smart Growth" strategic
including grants for projects and programs, plan review expediency and
Leadership in Energy and Environmental Design (LEED) submission cost
including education, tree-planting, mitigation and restoration.
including: bicycle and pedestrian safety and facilities construction and
alternatively fueled vehicles.
including: financing programs granted by private institutions.
Center for Small
Business and the Environmentoffers an array of information for small businesses interested in
climate protection. Contact: Byron Kennard, Executive Director, The Center for Small
Business and the Environment P.O. Box 53127, Washington DC, 20009, 202 – 332-6875