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Environment & Energy Report

Energy Efficiency Industry Seeks Aid as House Panel Seeks Ideas

April 10, 2020, 10:01 AM

U.S. energy efficiency firms are worried they won’t be able to weather economic shocks from the coronavirus pandemic that’s shuttering the very office buildings, community centers, and schools they need to enter to do their work.

Congressional committees have begun soliciting suggestions to help the struggling sector. The House Science, Space and Technology Committee, in an April 7 email, requested “ideas for research, development, and innovation funding and policies, including research infrastructure.”

The joint request by the committee’s Democratic and Republican GOP chiefs of staff noted the committee’s broad jurisdiction—it oversees research and development efforts at the Energy Department, Environmental Protection Agency, and Transportation Department—but said it would welcome “ideas beyond just traditional” research and development, such as Energy Department demonstration projects.

Bob Keefe, executive director for E2, which represents business leaders, investors, and others in clean energy, said his group has lobbied Capitol Hill offices asking for help, from clean energy grants to refundable tax credits that would would help reassure increasingly nervous private equity firms.

Keefe said he’s making the case that energy efficiency workers “live and work in everybody’s state and district.”

But clean energy is fighting an uphill battle. It has allies in both parties, but many Republicans warn against special treatment for renewable energy and energy efficiency, and the Trump administration is now more focused on helping an oil industry reeling from declining oil prices.

Clean energy and energy efficiency backers are mostly resigned that they won’t see incentives in the next economic recovery bill likely to move in the weeks ahead to provide more aid to workers and small business.

Near Term and Longer Term

Richard Obermann, the science committee’s Democratic chief of staff, and Republican Chief of Staff Josh Mathis wrote that the panel wants ideas by April 13 to funnel into “any future near-term response and longer term economic stimulus package(s) developed by the House” responding to the Covid-19 pandemic.

The committee also contacted “each of our agencies” under its purview, including the EPA and Energy Department, for funding suggestions, they wrote.

The Select Committee on the Climate Crisis and other panels haven’t formally requested funding ideas, but have been talking with the struggling sector, aides said.

Rich Powell, executive director of ClearPath, a conservative clean-energy group, said renewable energy backers are likely to fall short of getting aid in any near-term economic recovery package.

Powell said proposals with solid bipartisan backing that could boost clean energy, such as an infrastructure or highway bill, are likely to fare better. He also pointed to 17 energy demonstration projects—five of them for carbon capture and storage—that were included in a recent Senate energy package as a bipartisan proposal that could be resurrected.

The energy bill was derailed by a dispute over efforts to curb hydrofluorocarbons, a “super” climate pollutant used as a refrigerant, but Powell hopes the Senate can return the package, or parts of it, to the floor in the months ahead.

Grinding to a Halt

New Jersey-based Lime Energy, which partners with U.S. utilities doing energy efficiency upgrades in commercial buildings, local government offices, and school, said the sector desperately needs help soon.

“Right now, nearly all our utility clients have directed us to stop all site work, grinding our entire business to a halt, and if the shutdown continues we will be forced to furlough or lay off much of our workforce,” said Lloyd Kass, Lime Energy’s vice president for policy and business development.

Lime Energy works with more than a dozen U.S. utilities boosting energy efficiency, completing roughly 30,000 retrofits a year in small businesses, schools, churches, and other buildings.

Ohio-based Energy Optimizers has cut roughly 25% of its workers employed in school efficiency projects, said Greg Smith, the company’s CEO. More than $10 million in company projects employing 150 Ohio workers have been halted.

Michael Rucker, CEO of Colorado-based Scout Clean Energy, which focuses on wind farms, said financial jitters are impacting tax equity markets, compounded by dwindling confidence that clean energy tax credits will be extended.

Clean energy lenders “are in a panic situation that I haven’t seen since 2008,” Rucker said.

Reopening schools and buildings closed around the nation by itself won’t be enough to rescue the energy efficiency sector, Keefe said, as the closures have obliterated interest in energy audits and demand for efficiency retrofits.

One blueprint for jump-starting clean energy: the 2009 Obama-era stimulus which funneled $90 billion in clean energy loans, tax incentives, and direct payments in lieu of investment tax credits offered under a since-expired Treasury Department program known as Section 1603.

Eighteen clean energy, and environmental advocates are pressing congressional leaders for help, warning that the slowdown in projects could jeopardize tax credits—particularly incentives for those that must be completed in 2020, their March 19 letter said.

To contact the reporter on this story: Dean Scott in Washington at dscott@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Rebecca Baker at rbaker@bloomberglaw.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com

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