Philadelphia is moving forward with an ambitious plan to create 10,000 “green jobs” over 10 years. It involves investing $1 billion in public and private money into energy efficiency projects in all city-owned buildings, schools, as well as 25,000 low-to-moderate-income homes and 2,500 small businesses.
Energy efficiency plans are often billed as a “win-win-win:” clients save money on energy bills by making upgrades, such as installing a new boiler; the savings pay for the upgrade with money to spare; and finally, boiler-installers and other contractors get more work.
The politician pushing the plan, known as the “Philadelphia Energy Campaign,” is City Council President Darrell Clarke. But it’s the Philadelphia Energy Authority, an independent city agency formed in 2010 that is responsible for seeing it through.
StateImpact Pennsylvania’s Katie Colaneri recently sat down with the authority’s executive director, Emily Schapira to talk about how the plan is going since it was announced last February.
Note: This Q&A has been edited for length and clarity.
Q: If I were a home or business owner, I’d be wondering why the city cares if I save money on my energy bills. What’s in it for you?
A: It’s funny I get asked that question all the time. What’s in it for us is that energy efficiency and clean energy is a really unique vehicle to drive poverty-reduction, economic development in Philadelphia, health, sustainability, so it’s a vehicle that can be used to meet a lot of the other goals of city government and of our city in general.
And that’s actually where we have some really exciting progress to share. We have a multi-family affordable housing pilot up and running, as well as a small business pilot focusing on corner stores and small restaurants. And what we’ve really done is taken the successful models from the city and other MUSH [municipalities, universities, schools and hospitals] sector projects and adapted them to work for residential housing and for small businesses.
Q: Describe the process. Let’s say I own a corner store in West Philadelphia. What would you do for me?
A: We can come in and do a free energy audit.
We’re focused, in particular, in small business on refrigeration and lighting for a couple of reasons. One is that a lot of these small businesses are tenants, not owners, so you can’t really touch the rest of the building without getting permission from the landlord. Those two things are the biggest energy suck next to HVAC, so that’s where we’re focusing.
We’re targeting 30 percent energy reduction in these small businesses. Thirty percent is a number you can achieve without doing major construction to the building.
So we’ll figure out what are the measures that can be done here effectively and cost-effectively that help us to find a payback and then we will develop the plan, bring in contractors that can do it, incorporating the PECO and PGW rebates that are available. We’ve also got a grant for the small business sector from Pennsylvania Department of Environmental Protection that covers about half the cost of all of those retrofits. And then there’s a little sliver to be financed at the end. And so we’ll bring you a package that says here’s how you do this. If you sign on the dotted line, we’ll help you execute it.
Q: How much will it cost me?
A: In order to participate in the program, there’s no upfront cost at all. Ultimately though, there will be a portion of the total cost that you’ll be responsible for paying. We’ll provide financing for you to do it, but there is a cost to it ultimately. We expect that to be about one-sixth of the total cost.
Q: And what I save on my energy bills will ultimately pay me back?
A: A: Exactly. It’s all designed to have positive cash flow. So your savings will be more than your monthly payment on any loan you’d take out and we design it that way on purpose. We really want to use the energy savings to pay for the project. I think in most cases otherwise we would not see a lot of these business owners doing this work, so we’re really trying to target to this type of business exactly what you need to get the job done.
Q: Last year, a group of academics looked at the federal program to weatherize low-income homes and upgrade appliances in Michigan. They found the state was spending more than the homeowners were saving. The results were surprising given other studies have shown more positive results for energy efficiency projects. Critics said the study didn’t take into account the value of other health and societal benefits like keeping low-income families warm in the winter.
This campaign is going to involve public dollars. How can you assure taxpayers this is going to pay off.
A: Our goal is to have taxpayers invest as little as possible and really to leverage the private sector. Energy efficiency works and when it’s done well, it’s been proven time and time again that we know for a fact that you can generate positive cash flow on energy efficiency projects. So I think to some degree – even if you leave off all those other social considerations – we should be doing this in a way that is financeable through traditional lenders because we’re creating savings, actual savings that you can see visibly on your bill. So that’s one thing.
There’s a report that came out recently from the Center for Neighborhood Technology that shows that Philly – not just any city – can reduce poverty by 25 percent through a combination of household expense reduction and job creation. So that’s exactly what this program models out. We really feel like there are substantive, individual human impacts by doing this project and energy is a vehicle like no other.
We talk about healthy homes and the need to address asthma and lead paint in homes and all of these things and those things do not pay for themselves. If you incorporate energy into this, all of a sudden now you have a return on investment that you can use to pay for those things.
Q: And what about the 10,000 jobs? You’ve said an estimated 4,600 will be people directly employed doing this work. How much of this is keeping current contractors employed and how much is creating demand to develop jobs for more people?
A: At a small scale, it’s keeping current jobs, so that’s why you’ll see at investments under $1 million, there’s not a ton of job creation because you’re keeping people in business or they’re working a little overtime. But once you start building up to scale – that’s why this is a $1 billion program. We know people will need to continue to get more training. We’ll need to train more folks. These are living wage career type jobs. These are not a one and done. We know that this is a growing industry and this campaign has the ability to actually spur the industry in Philadelphia.