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Building Decarbonization Movement Leads Stealth Attack On Fossil Fuels

Knowledge is power: New building decarbonization technologies are mainstreaming, with an assist from new financial instruments.

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That fancy new EV in the driveway is a planet-saver, but that driveway is probably attached to a building of some kind, and that’s where the buzzkill kicks in. Millions of buildings are out there sucking fossil energy from the ground and spewing carbon into the air, regardless of who is driving what. On the bright side, investors are beginning to perk up, pay attention, and juice the building decarbonization movement with fresh dollars to push coal, oil, and natural gas out of the picture.

Building Electrification Good…

To put things into perspective, the latest figures from the US Environmental Protection Agency show that commercial and residential buildings accounted for 13% of greenhouse gas emissions in the US in 2021.

Greenhouse gas emissions from the commercial and residential sector include fossil fuels burned for heat, lighting and the use of gases for refrigeration and cooling in businesses and homes, and non-building specific emissions such as the handling of waste,” EPA explains.

The building electrification movement is helping to tamp down carbon emissions from the point of use, much as electric vehicles eliminate tailpipe emissions (more CleanTechnica coverage here).

The problem kicks in when the source of electricity comes into play. EPA calculates that commercial and residential buildings account for 30% of electricity use, and that has an impact on overall carbon emissions related to energy use in buildings.

“Greenhouse gas emissions from commercial and residential buildings…increase substantially when emissions from electricity end-use are included, due to the relatively large share of electricity use (e.g., heating, ventilation, and air conditioning; lighting; and appliances) in these sectors,” EPA notes.


…Building Decarbonization Better

The electrification conundrum is fading away as the power generation sector decarbonizes. However, the fade has been a slow one, and it’s going to take a lot longer. As of last year, fossil fuels still accounted for 60% of utility-scale electricity generation in the US, with renewables and nuclear coming in a distant second, at 22% and 18% respectively.

Those hoping for rooftop solar and other small-scale solar arrays to solve the problem also have a long wait ahead of them. According to the US Energy Information Agency, utility-scale power generation accounted for about 4,243 billion kilowatt-hours in 2022, and small-scale solar only added another 58 billion kilowatt-hours.

Until the nation’s power generation stakeholders fix their carbon problem, making buildings more energy efficient is just as important as it was back in the 1970s, when the OPEC first oil crisis began to spark a change in perspective about the nation’s energy profile. That’s where the building decarbonization movement really kicks into gear, by combining energy management with electrification.

Building Decarbonization Made Easy

This more holistic approach to building decarbonization began to take shape in 2011 during the Obama administration, with the launch of the EPA’s Better Buildings initiative. The building decarbonization project assumed a lower profile after the criminally indicted former President Trump took office in 2017 with a fossil energy free-for-all agenda. Nevertheless, the building decarbonization movement was still bubbling under the surface, especially in the all-important area of financing.

“The good news is that major US businesses have picked up the efficiency upgrade mantle for obvious reasons: the payback justifies the investment,” CleanTechnica observed back in 2019.

There being no such thing as a free lunch, businesses that can’t swing the up-front cost of an energy efficiency upgrade are left in the lurch. By 2019, though, a solution was emerging as building decarbonization stakeholders borrowed the power purchase model from renewable energy developers.

“Like the now familiar power purchase agreement, an efficiency-as-a-service contract allows for companies to pay for the upgrade through a savings on their utility bills, month by month,” CleanTechnica observed.

Building Decarbonization: What Are You Waiting For?

The energy efficiency-as-a-service model has gone mainstream, with the US Department of Defense among its many fans. The challenge now is to coax the financing pipeline up to meet the level of demand.

A case in point is the company GridPoint, which first popped up on the CleanTechnica radar back in 2009 with a stack of algorithms for managing EV charging.

Since then the company has amassed a roster of 18,000 commercial buildings under its Intelligent Energy Network subscription service. The soup-to-nuts package includes an energy analysis followed up with controls that squeeze the most energy-saving mileage out of a building. Energy storage and EV charging are also part of the mix.

With a large customer base, GridPoint can also link the buildings under its umbrella with each other to participate in demand-response programs that reward ratepayers for shifting their consumption patterns. “Networked together, buildings with GridPoint Intelligence™ aggregate the reliable, precise, and instantaneous capacity that energy grids increasingly require,” GridPoint explains.

GridPoint estimates that its customers have saved a total of $873 million and reduced their carbon dioxide equivalent emissions by a collective 11.9 billion pounds to date.

In the latest development, earlier today GridPoint announced a new credit facility (a type of flexible loan) of $150 million from the firm HASI, aimed at piling on more subscribers. The new dollars build on an existing relationship between the two companies.

Who’s Afraid Of The ESG?

Republican office holders in Congress and statehouses have been riling up their base voters with scary talk about ESG (environment, social, governance) investing, but they are up against a formidable foe, that being money.

Enabling businesses to cut their energy bills is just one part of the money-making secret behind environment-focused companies like GridPoint. Participating in demand-response programs is another bottom line benefit that contributes to grid resiliency and helps prevent the risk of loss due to power outages. Efficiency-as-a-service also enables businesses to count their carbon credits and promote themselves as planet savers.

Daniela Shapiro, the Managing Director of HASI, contributed a comment to GridPoint’s press release in which she took note of the “continued momentum for commercial building decarbonization in driving the energy transition.”

“GridPoint’s energy optimization platform has outstanding CarbonCount® scores in terms of emissions reduced per dollar invested, which is a huge differentiator for companies focused on reducing energy consumption, increasing efficiency, and achieving ambitious sustainability goals,” Shapiro added.

She knows what she’s talking about. HASI is short for Hannon Armstrong Sustainable Infrastructure Capital, Inc., and it has notched more than $10 billion in managed assets on its belt, all funneled through the CarbonCount carbon accounting platform.

“Our vision is that every investment should improve our climate future, which is why we require that all prospective investments are neutral to negative on incremental carbon emissions or have some other tangible environmental benefit, such as reducing water consumption., under the vision that ‘every investment improves our climate future,'” HASI explains.

Republican office holders already have egg on their faces as efforts to thwart ESG investing have backfired. Also not helping their case is the fact that many anti-ESG states have invested millions in taxpayer dollars to lure new fossil-killing industries, including energy storage and green steel as well as electric vehicles.

They may want to tamp down the rhetoric before the whole chicken coop lands on their heads.

Find me on Spoutible: @TinaMCasey or LinkedIn @TinaMCasey or Mastodon @Casey or Post: @tinamcasey

Image: Building decarbonization tools tailored for small commercial buildings from GridPoint (via GridPoint).

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Tina specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Views expressed are her own. Follow her on Twitter @TinaMCasey and Spoutible.


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