Posted By: Andrew Brix
When I agreed to write these few posts for Concentrate, I hardly expected to be commenting on such current events, but here I am, sitting down to tell you, my newly loyal readers, a tale of Fannie Mae and Freddie Mac... but let me start at the beginning.
In the beginning, there was Berkeley. (Actually, a whole heck of a lot happened before the first human set foot in the place we now call Berkeley, California, but this story starts in Berkeley. In 2007.) Berkeley had a lot of people who wanted to install solar panels on their homes, but even with the federal tax credits and California Solar Initiative incentives, they had a hard time coming up with enough cash to cover the upfront cost of a solar installation.
Fortunately, there were a few smart individuals working for the City of Berkeley and they realized they already had a solution available for these residents: the city could provide the upfront money for a resident's solar installation and assess the property over the next 10-15 years to effectively finance the cost of the solar panels. It's the same process cities around that country have used for 100 years to finance new sewer lines and sidewalks. After all, we don't expect everyone to be able to afford to buy a new car with a single check and electric companies don't bill us in advance for our next 20 years of electricity, so why wouldn't we allow folks to spread out the cost of a solar installation? Or, for that matter, insulation? Or a new furnace?
By 2009, the "Berkeley model" had become known as Property Assessed Clean Energy, or PACE, and Boulder County, Colorado had taken it to a whole 'nother level. Over the course of two application periods, Boulder County issued nearly $10 million in PACE assessments to homeowners for a wide variety of energy-saving measures, and the U.S. Department of Energy was offering significant stimulus funding for PACE programs through Energy Efficiency and Conservation Block Grants.
At the City of Ann Arbor, I like to think we know a good thing when we see it, and we put in to the Department of Energy for funding to start a PACE program here in Ann Arbor. Upon receiving notice that our funding was approved, one of our first tasks was to set about clarifying the legality of PACE in Michigan, which led to the introduction of the PACE Act (H.B. 5640) by Representative Rebekah Warren in December 2009. That bill passed the House on April 22, but has not yet been introduced in the State Senate, because this is where the games begin.
On May 5, 2010, Fannie Mae and Freddie Mac, the "government-sponsored entities" that hold trillions of dollars in mortgages reversed their previous support of PACE programs, stating in a lender letter that "[PACE] programs with first liens run contrary to the Fannie Mae-Freddie Mac Uniform Security Instrument and that [Fannie and Freddie] would provide additional guidance should the programs move beyond the experimental stage." This was followed by a July 6, 2010 FHFA Statement on Certain Energy Retrofit Loan Programs that effectively redlines communities that run PACE programs. The effect on PACE programs around the country?whether existing or in development?has been the policy equivalent of pulling the emergency brake on a train. Everything has come to a screeching halt. In California, Governor Schwarzenegger said in a statement that he is "deeply disappointed" with the Federal Housing Finance Agency's (FHFA) decision. In New York, the Town of Babylon is planning to sue FHFA in order to keep its Long Island Green Homes program active and avoid dozens of related layoffs.
What do you think? Are Fannie and Freddie simply doing their part to protect lenders or have they overstepped their regulatory bounds and shut down a great tool for economic development and environmental protection? I think it's clear where I stand on this one.
Posted By: Andrew Brix
In my previous post, I implied that technology is not the answer to our energy challenge. Or something like that, anyway. Of course, the answers are never that simple, and real life not only has shades of grey, it colors too! However, for the time being, we are going to concern ourselves with only one normally dull color: white. What's so exciting about white? It's that LED lighting?based around relatively new white LEDs?has the potential to save 25 percent of electricity used for lighting in the U.S over the next 20 years.
When I first learned about LED lighting back in 2005, white LEDs (light-emitting diodes) were still new to the lighting industry, and then-recent tests of LED lighting had been less-than-spectacular. But the potential was clearly there, and the city had previously had great success with LED traffic signals, so we starting testing LED streetlights around downtown Ann Arbor.
What's so great about LEDs? The short answer is they last longer and use less energy. As LEDs get less expensive, they are becoming the most economical choice in more and more lighting applications. As a bonus, they contain no mercury, and produce less heat than conventional lighting (that's part of being efficient).
For downtown streetlights in Ann Arbor, we're using half the energy as before (56 Watts vs. 120 Watts) and are projecting a ten-year lifetime rather than two years. The original test installation on Washington St., between Fourth Ave. and Fifth Ave. has now been in for over four years and has officially paid for itself! With the old metal halide fixtures, those bulbs would all have been changed twice now, but we haven't had to touch the LEDs yet. How many municipal employees does it take to change an LED light? None, it doesn't need changing! (Yet...obviously nothing lasts forever.)
Thinking about making the switch to LEDs yourself? You'll still have to do some homework and want to read a few reviews, especially if you haven't seen in person. The U.S. Department of Energy has some good information on LEDs, and what to look for in different applications. LEDs still cost more upfront than incandescent or fluorescent bulbs, so for those of you on a budget, Cree is giving away some of their excellent LR6 downlights?you can't beat that price! If you're still not ready to make the move to LEDs, go to compact fluorescents (CFLs) in the meantime to save energy and reduce those nasty CO2 emissions.
Finally, don't forget to have fun while you're saving the world!
Next: Michigan: The Sunshine State
Posted By: Andrew Brix
What if I told you we could reach the Kyoto Protocol's greenhouse gas emissions targets overnight? Seven percent below 1990 emissions levels tomorrow? I know, it sounds improbable, like something you might see advertised on the shopping network in the wee hours of the morning. "Free-energy powered CO2 vacuum sucks greenhouse gas emissions out of the atmosphere at no cost?just set it and forget it!"
If only we could buy our way out of trouble that easily! Especially when you consider that most of the world, Ann Arbor included, uses more energy and emits more carbon (in total and per capita) that it did in 1990, it sounds like some sort of pipedream that we could just snap our fingers, wake up the next morning and be done with it. (Of course, then we'd still have to keep working toward an 80% reduction in CO2 emissions by 2050 and eventual stabilization of atmospheric CO2 concentrations at 350 parts per million (ppm) – but Kyoto would be a great start!)
Now, I'm not talking about some sort of magic technological innovation that is going to rescue us here. Technology?wind power, solar energy, LED lighting, etc.?has a role to play, but it tends to provide silver BBs in the climate fight. What I'm talking about is more of a silver CO2-slaying rifle slug that you can put to use without tax credits, rebates, or grant funding. In fact, you can start right now, because the thing is, it's all in your head.
What I'm talking about is an energy conservation ethic: moving past dollars and cents, and "this is how we've always done it" and simply taking an active role in using less energy. Because it's the right thing to do. Because someone once said, "waste not, want not." Because it means sending less money out of Ann Arbor, out of the State of Michigan, and out of the country. Because you want to save some of the earth's bounty for your children and grandchildren. And their children and grandchildren. Because you don't think it's a good idea to return the earth to another carboniferous period.
So what happens when we all wake up tomorrow morning and start living according to this great new energy conservation ethic? Are we all going to start hanging our laundry out to dry and riding unicycles everywhere? I don't know, and I don't believe it particularly matters exactly what each of us does. Sure, there are some obvious things we can all do like dialing down the thermostat in the winter and getting by with a fan rather than A/C, but what matters is paying attention, noticing how and where we use energy and simply thinking about how to use less. And that's a lot better than looking at a list of "ten ways to save the planet" because you're going to come up with ideas that are specific to your life and your daily routines that no one else can.
Did I mention you can start today?
Next: The LED Revolution