Summary
President Obama and Secretary Chu announced a $346 million investment from the “American Recovery and Reinvestment Act,” otherwise known as the U.S. economic stimulus package, to expand and accelerate the development, deployment, and use of energy efficient technologies in all major types of commercial buildings, in addition to new and existing homes and save Americans billions of dollars annually.
Analysis
After the recent victory in the U.S. House of Representatives in passing historic legislation such as the “American Clean Energy and Security Act of 2009” and other bills designed to help generate a clean energy economy, President Barack Obama and U.S. Energy Secretary Steven Chu announced on June 30, 2009 progressive actions to enhance energy efficiency in the U.S. and save American consumers billions of dollars per year.
President Obama and Secretary Chu announced a $346 million investment from the “American Recovery and Reinvestment Act,” otherwise known as the U.S. economic stimulus package, to expand and accelerate the development, deployment, and use of energy efficient technologies in all major types of commercial buildings, in addition to new and existing homes. The recent announcement emphasizes the emergence of the Green Revolution, not only preserving the environment, but aiding the revitalization of the American economy by developing a clean energy infrastructure via comprehensive policies. This funding program follows similarly-minded legislation to reduce American dependence on foreign oil through the new fuel efficiency and emissions standards for automobiles sold in the U.S.
Energy efficiency and renewable energy investments have been key focal points of the Recovery Act. Secretary Chu stated in the announcement that "when it comes to saving money and growing our economy, energy efficiency isn't just low hanging fruit; it's fruit lying on the ground.” This ruling includes major upgrades to outdated energy conservation standards, which are very liberal compared to most European and Asian countries, for numerous household and commercial lamps and lighting equipment. Seven percent of all energy consumed in the U.S. is a result of lighting, as noted by the Department of Energy (DOE). Moreover, residential and commercial buildings consume 40 percent of the energy and represent 40 percent of the carbon emissions in the United States.
In February 2009, President Obama requested the DOE to accelerate the upgrades to energy conservation standards for appliances. His plan regarding these standards, which will be implemented in 2012, focuses on General Service Fluorescent Lamps (GSFL), which are commonly found in residential and commercial buildings, and Incandescent Reflector Lamps (IRL), which are typically utilized in recessed and track lighting. These fluorescent and incandescent lamps (shards shown in photo) represent approximately 38 and 7 percent of total lighting energy consumption, respectively, which are supportive points mentioned in the plan.
The approved initiative has numerous proclaimed benefits including:
1. Avoiding the emission of up to 594 million tons of carbon dioxide (CO2) from 2012 through 2042 - equivalent to removing approximately 166 million cars from the road annually;
2. Saving enough electricity from 2012 through 2042 to power every home in the U.S. for up to 10 months (~$1 to $4 billion annually);
3. Eliminating the need for up to 7.3 gigawatts of new generating capacity by 2042 - equivalent to as many as fourteen 500MW coal-fired power plants;
4. Decreasing the electricity used in GSFLs by 15%, saving consumers up to $8.66 per lamp over its lifetime; decreasing electricity used by IRLs by 25%, saving consumers $7.95 per lamp over its lifetime.
The final plan, as issued by the Secretary of Energy on June 26, 2009, can be downloaded and reviewed at the Department of Energy website (listed below). This $346 million of stimulus funding will be distributed in five major areas as follows:
1. Advanced Building Systems Research ($100 million)
These projects will address research focused on the systems design, integration, and control of both new and existing buildings.
2. Residential Buildings Development and Deployment ($70 million)
The projects will provide technical support to train workers and create Green collar jobs, developing a new workforce qualified to improve American homes and will permit a major initiative to provide builders with technical assistance and training through states, utilities, and existing programs to increase the market share of new homes that offer substantial net house energy savings.
3. Commercial Buildings Initiative ($53.5 million)
These funds will be dedicated to accelerating and expanding partnerships with major companies that: design, build, own, manage, or operate large fleets of buildings and commit to achieving stellar energy performance.
4. Buildings and Appliance Market Transformation ($72.5 million)
Basic activities include expanding official ENERGY STAR standards to accelerate development of energy efficient products and shift the ENERGY STAR brand into new areas; preparing the design, construction, and enforcement community to initiate commercial building energy codes, while enlarging the DOE's Appliance Standards program.
5. Solid State Lighting Research (SSL) and Development ($50 million)
This element is focused on creating a U.S.-led industry for high-efficiency light sources that are based on high-brightness light-emitting diode technology, which saves more energy, reduce costs, and ultimately has less environmental impact due to the comparative carbon emissions reductions by replacing conventional light sources. The DOE will be seeking applications for projects to advance research, development, and market adoption of SSL technology by enabling cost effectiveness, which is one of the main issues delaying full-scale commercialization compared to competitive alternatives.
In general, the light emitting diode or SSL segment of the greater semiconductor or microelectronics industry has not been impacted as severely as most other areas of the overall industry, especially companies which offer accompanying solar portfolios. Furthermore, the LED industry is unique for semiconductors in that SSL or LED fixtures are the wave of the future and are eligible for stimulus money, unlike most semiconductor devices geared towards consumer electronics, which have been particularly affected by the global recession. Ultimately, companies such as Cree, Philips Lumileds and Avago Technologies will benefit from the federal stimulus funding for SSL.
Today's buildings consume more energy than any other sector of the U.S. economy, including transportation and industry, according to the DOE background study. Moreover, almost 75 percent of our nation's 81 million buildings were built before 1979, as many were designed and constructed for limited service. Thus, many buildings will eventually require either significant retrofits or complete replacement. Building efficiency represents one of the most fundamental and cost effective ways to reduce carbon emissions, while generating desperately needed new jobs, as the nation’s unemployment rate approaches double digits. Furthermore, the application of new and existing technologies would actually make buildings up to 80 percent more efficient and possibly even elevate them to the level of "net zero" energy buildings with the incorporation of renewable power generation sources such as solar, wind, and/or geothermal.
