Thursday, August 23, 2012

ICOSA Driving Force Radio: Improving the Bottom-Line Through Energy Efficiency Technologies and Creating Unique Finance Mechanisms to Facilitate Investment

The least expensive power is the power that we don’t have to create.  Not only that, but not having to create that power can be an economic engine.  “In Colorado alone, the energy efficiency industry provides over 14,000 jobs and creates more than $1 Billion in local economic development, according to the State of the State, a report produced by the Energy Efficient Business Coalition ( 

To introduce this concept from the perspective of a business owner, ICOSA invited Tim Heaton, Vice President and co-founder of Coolerado, Inc. ( to talk about his experience with energy efficiency, both the successes and the challenges.  Energy is the single largest controllable business expense.  “The commercial real estate industry spends approximately $24 billion annually on energy -- typically a third of variable expenses,” according to statistics.  Of that, lighting and cooling account for 80% of that cost. 

The biggest impact is in the retrofit market because new construction accounts for only 1% of market activity. In fact, 73% of our commercial buildings are 20 years or older.  The benefits of reducing energy costs are huge and represent big opportunity, according to Heaton.  A 10% decrease in energy use could lead to a 1.5% increase in net operating income (NOI).   This is money that goes directly to the business’ bottom line, emphasizes Heaton.

As we take a deeper dive on the show, however, we see that the benefits exceed those that are directed towards a business’ bottom line.  Studies have shown that conserving 1 megawatt of energy:  creates 22 new jobs; generates an increase of $2,230,572 in annual economic output for the region; provides $684,536 in new wage income; produces $125,000 in new business income for local businesses.  This is yet another time on the show that we see the impact of market failures.  In this case, if numbers show that energy efficiency is an economic engine, why isn’t the energy efficiency industry growing in-line with its potential?   

One market challenge is the upfront cost associated with energy efficiency retrofits.  To understand the challenges and some solutions in this area we talk to Sharon Procopio, P.E. Commercial Energy Program Administrator, City and County of Denver Department of Environmental Health.  Sharon manages the Denver Energy Challenge for Businesses, which provides education, free support services, and financial assistance to businesses in the City and County of Denver.  (  The Denver Energy Challenge was created to expand energy efficiency services to residents and businesses in the City of County of Denver and its funding was derived under the American Recovery and Reinvestment Act. 

Because energy is a business cost and not necessarily associated with a business’ core objective, decisions on energy efficiency and investment are time consuming and can be confusing.  To address this, Elevations Credit Union ( has teamed up with Energy Smart and the Denver Energy Challenge to bring Elevations Energy Loans to eligible homes and businesses in Denver City and County and Boulder County.  This team of experts provides access to energy advisors to help assess the business needs and make retrofit recommendations, qualified contractors to make the improvements and loan specialists to provide low interest loans (2.75% for homes and 3.75% for businesses). 

Under this program, Elevations Credit Union is committing $35M in financing for energy efficient and renewable energy upgrades for eligible homes and businesses in Denver and Boulder Counties.  Boulder and Denver Counties have set aside $8M of grant funds to create a finance program to improve energy efficiency of existing buildings and stimulate local economic growth.  Businesses and residences can find more information by looking at this video or going to the Denver Energy Challenge website

Join us for a more detailed discussion on ICOSA’s Driving Force radio with Jan Mazotti ( and co-host for Energy 101, Kelly de la Torre.   






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