A new program aimed at encouraging Chicago and Rockford-area building owners to do energy-efficiency retrofits is one step closer to kickoff after the non-profit CNT Energy was named coordinator of the effort this week.
The retrofit program is being funded by a $25-million federal grant from the American Recovery and Reinvestment Act awarded last spring to the Chicago Metropolitan Agency for Planning, a regional planning organization for Northeastern Illinois.
In a partnership with the city of Chicago and the city of Rockford, CMAP intends to jump-start energy-efficiency projects on a much larger scale, according to Anne Evens, executive director of CNT Energy, a division of the Center for Neighborhood Technology, which is a Chicago-based think tank dedicated to solving urban environmental problems.
The program will establish a network of local information about retrofitting, financing options and listings of companies capable of performing those tasks.
Making buildings more energy-efficient is considered critical in the battle against climate change. Studies have shown carbon dioxide emissions from buildings in Chicago are responsible for about 70% of the city’s total emissions, Ms. Evens says. What’s more, Chicago’s buildings — residential and commercial combined — use about twice as much energy as those in other Midwestern cities, she says.
Ms. Evens, 47, is one of the key players assembling the network of organizations and experts that will create the program. She ran the Chicago marathon earlier this month (her sixth) and is used to taking on big challenges. She was instrumental in establishing the Energy Savers program in 2007, which has helped retrofit about 2,800 housing units in the Chicago area at an average energy savings of about 30%. She also played a strategic role in working with multiple organizations and the city of Chicago to develop the Chicago Climate Action Plan several years ago.
Crain’s talked with Ms. Evens this week to discuss the goals of the new program and the challenges of pulling all the pieces together.
Crain’s: What experience does CNT Energy bring to the table that demonstrates your organization is up to the task of coordinating this massive grant program?
Ms. Evens: We were selected because we’re experts in energy efficiency and we understand energy consumption and how buildings in the region use energy. We run the nation’s largest and most effective multifamily energy-efficiency program (called Energy Savers), so we know how to do it. We have been working on coordinating and planning energy efficiency with the city of Chicago and CMAP and communities around the region for many years.
Crain’s: Can you briefly describe the scope of this grant and the goals of the program it will help launch?
Ms. Evens: The goal is to transform the retrofit market in the Chicago metropolitan region and in Rockford and dramatically increase energy efficiency. It’s looking to try to reduce the transaction costs for getting a retrofit.
For example, we should all be making investments in retrofitting our homes and buildings. It pays back, it’s good for the environment, and it’s good for the local economy because it generates jobs. All of us want to do that, but we don’t for several reasons: It’s too hard and it takes too much time. We’re creating a process that changes that.
We’re going to give building owners the right kind of information when they need it, we’re connecting them with contractors who know how to do the work, and we’re connecting them with financial products to help them pay for it.
Crain’s: How will this program help boost the local economy?
Ms. Evens: We’ll be generating demand for retrofits and connecting building owners with the resources they need to make a decision to invest. Then we’ll connect them with the right financing vehicles, rebate or incentive, and connect them with the right contractor to do the work. On the supply side we’re reducing the cost of acquiring a job and coordinating the contractors and assuring they can do high-quality work.
We’re expecting to create about 2,000 local jobs with this program. Some of that will come from displaced workers in the construction industry. There will also be efforts to employ disadvantaged workers.
Crain’s: How has the grant money been earmarked for use?
Ms. Evens: Some of the funds will be used to create an information system to push out information to building owners that’s specifically customized for particular sectors of the building market. The most substantial piece of the funding will go to develop financial products for each building sector. some of the money will be used for loan-loss reserves and guarantees in other ways to leverage more private capital investment.
The third pot of money is to help build the workforce piece. We’re going to create a one-stop shop for the contractors and workers to get information about how to be part of the program. We’re working closely with the training partners in the region.
Energy retrofit jobs tend to be pretty small, and if we can reduce the contractors’ cost of finding the job with this coordination function, we can dramatically increase the supply of contractors who will get involved in energy efficiency. There will be a Chicago retrofit ramp-up list of these contractors.
Crain’s: What do you see as the biggest challenges to implementing this retrofit program?
Ms. Evens: I’m sure we’ll be successful in implementing this program because we have good models for how this works already. I think the short-term challenge will be bringing the financial institutions to the table with substantial financial investment. We all know they’ve been skittish about lending. However, in our Energy Savers program, we have $2.5 million out on the street, zero defaults and no problems with repayment at all.
Once we present that loan performance data to financial institutions, we know they’ll see a positive experience in energy-efficiency lending and will continue to invest.
Crain’s: When are all the pieces expected to be in place for the program to be ready for its official launch?
Ms. Evens: We’re anticipating it will be ready to begin in the summer of 2011. We’re busy right now pulling together all the partners to coordinate the program. That will include creating a marketing and awareness campaign, building the information system in the next several months and bringing the financial institutions together to figure out what the market can offer in energy-efficiency financing.
The three-year program (tapping the federal funding) is really just a startup. CNT has been working on energy efficiency for 30 years, so this is a chance to scale up and transform the market. We’re not just a three-year grant administrator for this program, we’re building systems that will last.