Making Our Own Energy Again
As we pursue a policy to restore the strategically imperative high-wage manufacturing sector to the American economy, there is one vital raw material that we can start making more of in America — and that is renewable energy.
There are many reasons to make our own energy. Transitioning from our dependence on fossil fuels to more sustainable, low-impact energy sources is simultaneously an environmental imperative, a national security issue and an urgent economic necessity:
- By making more renewable energy we lower the greenhouse gas levels contributing to global warming and environmental degradation.
- By making more of our own energy, we lower the “oil subsidy” we now pay to many nations that would do us harm. Ultimately that means a safer America and billions of dollars each year in savings from money we now spend to keep oil shipment routes secure.
- By making our own energy, we stimulate our long-term economic recovery — and stop the flow of high-wage jobs that inevitably follows the billions of dollars we currently send overseas to buy energy we could make right here at home.
We will be talking in this campaign about these important benefits — but for the purpose of this proposal, let’s focus on the immediate, mid-term and long-term economic benefits of investing in American renewable energy production and energy conservation.
1 Reduce energy consumption and spur green-collar jobs through building retrofits
A key part of restoring high-wage manufacturing to the U.S. is restoring the buying power of the American consumer — and that means getting more Americans back to work as fast as possible. As green-jobs advocate Van Jones has pointed out, one of the most compelling reasons to support a green economy is that most of these jobs can’t be outsourced — they must, literally, be performed right here at home.1
In 2008, buildings in the United States accounted for a full eight percent of global energy consumption. In the United States, our buildings used 40 percent of our energy consumption, which is 43 percent higher than consumption accounted for by the transportation sector and nearly 25 percent more than the industrial sector.2
That’s why, if we could do just one thing to help create jobs, restore our economy and create high-wage manufacturing, it should start with a renewed commitment to energy retrofits of all of America’s homes, offices, and public buildings. For some reason, weather stripping, calk, double-pane windows and new insulation don’t generate as many headlines as solar arrays and electric cars. But they should.
These simple and relatively low-tech ways to upgrade our built environment are the fastest and most cost-effective way to lower energy use. And they create jobs — potentially millions of jobs. The National Association of Homebuilders estimated that for every $1 million spent in energy retrofits, we create ten new jobs.3 These are exactly the kind of jobs that get young people into the workforce, help reduce poverty and open a pathway to the middle class. And these are jobs our unemployed friends and neighbors can do right away right here in our district.
I support the tax credit for energy retrofits — but we can do better. We need to find innovative ways to fund solar installations, like the promise of the Property Assessed Clean Energy (PACE) program, that will accelerate installations of energy-efficient solar panels, insulation, water conservation systems and more.
The White House has estimated that home energy retrofits could save consumers $21 billion annually — and that’s a conservative figure.4 Others have estimated the savings are much higher. Even if we take the lower figure, a dramatic increase in the home and business retrofit market creates high-wage jobs right now and creates billions in additional spending power every year — spending power that will create new markets for the new goods we want to make here at home, putting the hard-hit building industry back to work. So if you look at a return on investment both from the environmental and the economic perspective — this is where you start.
2 Create the next-generation smart electric grid
The next logical step in making more energy here at home — and one I will advocate for — is federal investment and incentives in upgrading the national electric grid. We need to remember, even the high value-add type of manufacturing we want to bring back to this country takes energy — we want that energy to be affordable, predictably priced and sustainable.
The counterattack on renewable energy is that it is too expensive. Some forms of renewable energy appear much more expensive when you look only at the cost per kilowatt-hour. Of course, that’s not the real price. You also need to look at the environmental cost of global warming, the cost of policing our shipping lanes to bring in foreign oil, the healthcare costs that arise from air pollution and other toxins, the devastating cost of oil spills like we saw in the Gulf on industries like tourism and fishing, the foreign policy impacts of being beholden to potentially hostile governments because of our dependence on foreign oil, and all of the other many costs.
There is one energy resource in some areas that already competes on a kWh basis with natural gas, oil and coal — and that is wind energy. And with fossil fuel prices certain to rise, wind energy will soon be less expensive than energy coming from GHG-generating sources. The problem is, we don’t have the kind of sophisticated energy grid it takes to deliver the low-cost renewable power where and when it is needed from where it is most economically produced.
That’s why we need a “smart grid” and we need to make it a national priority. There have certainly been some missteps here — like the poorly communicated plans to switch consumers to wireless meters. But despite these missteps, we can grow our economy in leaps and bounds by investing in an upgraded national grid to deliver low-cost and stable renewable energy supplies when and where they are needed.
The smart grid has been called the “Internet of Energy” and I think it is fitting that we apply the Internet model, which was originally developed by the federal government (ARPANet), and then advanced through private innovation and investment. In partnership with private industry and colleges and universities, the federal government should invest in the backbone and then turn additional development and innovation over to the private sector.
One national report estimated that the smart grid will create 280,000 new jobs and that 140,000 of those jobs would permanently support the ongoing operation and maintenance of this new upgraded grid.5
In addition to the jobs created by the grid, the incredible energy savings available will put billions of dollars back into our economy. Just as the original Internet sparked a wave of innovation, job creation and a decade of economic growth (and helped contribute to balanced federal budgets), this new Internet of Energy can do exactly the same thing.
From making widespread implementation of electric vehicles possible to helping small manufacturers make things affordably and sustainably because they have access to reliable and affordable energy — the Smart Grid is vital. We need a stable and reliable grid to deliver energy where we need it. This will not only help us restore our manufacturing economy; it will protect millions of other jobs by ensuring we have secure, stable and clean energy supplies into the future.
|Just as with any new construction project, installing residential and small commercial solar must be done well and be done safely. Permitting is an important component to help ensure businesses and residences take all the necessary precautions, but the permitting process falls under the control of city hall and differs from municipality to municipality. One report pegged the average cost of the permitting and inspection process at $2,516 per residential installation.14 By contrast, Germany — a country with about 10 times the installed solar capacity of the United States and where it costs about 40 percent less than it does in the United States to complete residential installations — has a single, simple solar permitting process with rapid approval.15 16 I propose the establishment of a uniform, simple permitting process for all of the United States. This will go a long way to achieving grid parity for solar.|
3 Set national renewable energy and consumption standards
Setting energy consumption and renewable energy standards is another vital step in securing a clean energy future — and there is one real success story here in California that the whole nation needs to follow.
Did you know that California is one of the lowest energy users per household in the nation? In fact, as the national per-capita energy consumption has gone up by approximately 45 percent in the past three decades, California’s per-capita use has not followed the same upward trajectory because of proactive energy efficiency legislation passed in the 1970s and 1980s.6
And now, California is leading the nation in promoting renewable energy with a “Renewable Portfolio Standard” (RPS) that will require utilities to deliver fully one third of our power from renewable sources by 2020.7
We need to model these standards on a national basis — and go beyond them. With the existing technology trend, it is possible to meet the President’s standard of an 83 percent reduction in emissions by 2050.8 We should set this as a floor right now — but we should also revisit our standards every five years to see if the technology has advanced sufficiently to raise them even further.
The benefit of setting national standards is that we gain economies of scale. We can lower prices faster and make renewables competitive by making sure this is a national project, not a series of one-off, local state incentives. Those programs were great to get the ball rolling — but this is now a national challenge and we need national economies of scale.
In our research at the Center for Entrepreneurship and Technology which I co-founded at UC Berkeley, we’ve found that while government can do a good job of setting standards and goals, the government is rarely qualified to make decisions about which technologies to use and which not to use. It’s just not the expertise of most people in Sacramento or Washington.
Government should set a standard — a high but achievable standard — and then let universities, innovators and the R&D departments in private industry figure out how to meet those standards in the most cost-effective way. That’s the best of both worlds.
And we’ve seen the incredible innovation that can occur when we focus the government, our network of research universities and colleges, and private companies on big national goals — we get big and lasting technology breakthroughs that help sustain economic growth.
4 Make our military and the federal government energy independent
If we are looking at energy security, we should start by expanding one of the more successful renewable energy programs — and that’s the work being done in the Department of Defense to make our military more energy-secure. The reality is that much of renewable energy takes land and sun — and the DOD has bases throughout California and the nation with spare land and plenty of sun (and wind) in places that are not ecologically vulnerable. Our federal goal should be to make our military energy independent within the next fifteen years.
The federal government itself should also meet this standard. Just like any smart homeowner, the government can save money in the long run by investing up front in renewable energy and efficiency.
I support a goal of making our federal government a net-zero generator of green house gases in fifteen years. Right now, the federal government (not including the military) spends $25 billion each year on energy.9 We could promote jobs and lower spending in the long run by having the government do itself what it encourages others to do — retrofit, reduce consumption and create local solar and wind generation onsite where appropriate.
One way to pay for clean energy investments
|I propose that we create an American Energy Independence Bond to support American renewable energy projects. The bonds would pay Americans 2.5 percent — an attractive rate given that most Americans are currently earning less than one percent on their savings.The Center for American Progress reports that investing $100 billion in renewable energy and clean technology over a two-year period would yield “nearly four times more jobs than spending the same amount of money within the oil industry, and would reduce the unemployment rate to 4.4 % over two years.”11This plan would help us achieve the President’s goal of doubling America’s national renewable energy generation and Governor Brown’s goal of generating 1.3 million megawatts of renewable energy as well as bringing nearly 500,000 jobs to California.12 13 We would decrease our dependence on foreign oil and help usher our economy into the twenty-first century.|
3 “Submission of Steven Nadel, Executive Director, American Council for an Energy-Efficient Economy to the Energy and Environment Subcommittee, House Energy and Commerce Committee, Hearing on: Home Star,” (American Council for an Energy-Efficient Economy, March 2010), available at http://www.aceee.org/files/pdf/testimony/Nadel_HomeStar.03.18.10.pdf.
4 “Recovery Through Retrofit,” (Middle Class Task Force and Council on Environmental Quality, October 2009), available at http://www.whitehouse.gov/assets/documents/Recovery_Through_Retrofit_Final_Report.pdf.
5 “Understanding the Benefits of the Smart Grid,” (National Energy Technology Laboratory, June 2010), available at http://www.netl.doe.gov/smartgrid/referenceshelf/whitepapers/06.18.2010_Understanding%20Smart%20Grid%20Benefits.pdf.
7 David Baker, “California renewable energy goals come at a price,” (San Francisco Chronicle, November 2011), available at http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/23/MNLV1M1CET.DTL&ao=all.
8 “President to Attend Copenhagen Climate Talks,” (The White House, Office of the Press Secretary, November 2009), available at http://www.whitehouse.gov/the-press-office/president-attend-copenhagen-climate-talks.
10 Robert Pollin, Heidi Garrett-Peltier, James Heintz, and Helen Scharber, “Green Recovery, A Program to Create Good Jobs and Start Building a Low-Carbon Economy,” (Center for American Progress, September 2008), available at http://www.americanprogress.org/issues/2008/09/pdf/green_recovery.pdf
13 “The Impact of Local Permitting on the Cost of Solar Power, How a federal effort to simplify processes can make solar affordable for 50% of American homes,” (SunRun, January 2011), available at http://www.sunrunhome.com/download_file/view/414/189/.
15 Erik Kirschbaum, “Falling solar prices good for climate, bad for firms,” (Reuters, February 2012), available at http://www.reuters.com/article/2012/02/01/climate-solar-prices-idUSL5E8CV3LT20120201.