Building back better means investing in energy efficiency

Aidan Braun is Frontier Group summer intern.

As COVID-19 remains at large, Americans are finding it increasingly difficult to make ends meet. Unprecedented stay-at-home orders have caused businesses to shutter and millions of people to claim unemployment every week. For months, there has been talk on Capitol Hill of additional economic “stimulus.” That conversation should include programs with a track record of improving the environment and household finances like the 2009 Energy Efficiency and Conservation Block Grant Program (EECBG).

In the wake of the Great Recession, the 2009 American Recovery and Investment Act channeled federal funding to help transform the U.S. energy system. The EECBG Program was allocated $3.2 billion to help states, counties and municipalities implement energy efficient technologies and promote conservation. Local governments could apply for funding and then utilize the money to fund a wide variety of energy efficiency-related projects. By 2015, 2,187 local and state governments had received funding through the program.

The successful implementation of the program can be largely credited to its hybrid structure. Rather than relying on the federal government to provide funding directly to businesses or individuals, the grant structure allowed communities to tailor the funding to fit local needs. The flexibility of the program is demonstrated in the array of funded projects. A survey of mayors whose cities received funding under the program found that 83% of their cities used EECBG grants to retrofit government buildings for improved energy efficiency, 42% installed LED street lighting, 31% installed solar panels on public facilities, 26% used funding to educate the public and businesses on the benefits of conservation or renewable energy, and 22% used the grants for energy retrofits for residential units. Other jurisdictions had even more creative uses for the funding. Loudoun County in Virginia, for example, used its funding to construct a parking lot fitted with LED lights and solar-powered electric vehicle charging stations.

The grant program framed energy efficiency investments as a means of creating jobs, while also delivering impressive environmental benefits. An evaluation of the program from 2011 to 2015 reviewed $2.28 billion worth of grant projects.The report found that the allocated funding will save 94.2 million metric tons of carbon dioxide equivalent (MMTCO2E) over the lifetime of the projects installed, an equivalent of 41.4 MTCO2E for every $1,000 spent.[1] The evaluation further estimated that between 2009 and 2050, a total of 413 million MMBtu of energy will be saved, enough to heat, cool and light 2.2 million households for a year. The reduction in energy use translated into $5.2 billion in savings, 70% of which was enjoyed by residential consumers.

The energy savings achieved by the program provided much needed financial relief in a time of economic turmoil, while also putting people to work building a cleaner energy system. The program created or supported the retention of a total of 62,900 jobs, boosting employment in places like Rowe, Massachusetts, which used grant funding to install a solar array at a local elementary school. The town contracted a local excavation company to dig holes for the array and conduits, a local solar company to provide the solar panels and local electricians to install the technology. Rowe’s grant allowed the town to sustain an array of struggling businesses and workers in the area.

The environmental, infrastructure and financial benefits of the block grant program demonstrate the profound impact of increased energy efficiency in our cities, towns and counties. Research shows that despite the uncertainty of federal politics, block grant programs allow for continued sustainability efforts on the sub-national level. The establishment of a block grant for local clean energy projects is an essential step in helping Americans in trying economic times. The ability for localities in need of investment to apply for grants also allows for a more nuanced implementation of energy efficient technology. Because the program works at the sub-national level, it is easier to complete a large number of projects, providing greater benefit to residents in communities across the country.

Aiding the American people in the unique circumstances created by COVID-19 requires creative and concrete solutions – and learning from past successes. The experience of the EECBG proves that taxpayers can be the direct beneficiaries of improving local infrastructure.

America, however, has lost time in the fight to establish the energy efficient economy we need. America has tens of millions of homes and businesses with walls that leak heat and inefficient appliances that waste energy. Doubling or tripling the $3.2 billion allocated to the 2009 program would make a significant dent in greenhouse gas emissions, position the nation for a clean energy future, and address the economic disruption caused by COVID-19.

Photo via pxfuel. 

[1] Converted from 25.7 million metric tons carbon equivalent as listed in report.