The Ygrene Energy Fund of Santa Rosa, California is investing $650 million into commercial building retrofits to reduce energy consumption and cut utility costs. The consortium aims to implement a new system that would allow businesses to avoid startup costs and pay-off retrofits over five to twenty years. Total savings from renovations are greater than the surcharges added on to property-tax bills, and estimates show the investment will pay for itself within five years. These retrofits, which will cut consumption and costs by one third, include replacing building structures such as doors and windows and installing more efficient mechanical systems. James D. Martin of the Environmental Defense Fund claims that if this approach is proven successful, the country would be able to shut down one third of its coal plants. The Empire State Building has reduced energy consumption by almost 40% through sustainable renovations.
In comparison to the CAP’s proposal that the government should finance retrofits, Ygrene Energy Fund’s tax plan seems pretty great. It has the potential to decrease commercial footprints without relying on the federal government. With Barclays’ financial support and Lockheed Martin’s technical support, companies can increase efficiency and profit in the long-term without bottoming out with start-up costs. However, companies similar to Ygrene Energy Fund have experienced issues with financing qualified businesses. If Barclays Bank fails to supply sufficient funds for the amount of loans demanded, the program could face the same fate. Another potential drawback to the program is that contractors may aim to capitalize on retrofits through exaggerated upgrades and fabricated improvements. The chairman of Ygrene Energy Fund, Dennis Hunter, stated that, “Contractors are cowboys.” However, Hunter claimed that hired partners would be thoroughly inspected.