It’s hard to measure change when you are living through it. But I believe we will look back on 2014 as a year of major change and progress in energy. While many people, companies, governments looked askance at new (and some not so new) energy technologies, it seems like in 2014, entities were more interested in discovering more and listening. Renewable energy definitely became mainstream. Evidence of this is that even in some red states with governors and legislators against heavy restrictions, few if any states have rolled back their renewable portfolio standards of their utilities. And many even raised the percentage that a utility must obtain power from renewable sources. Also, several major financial institutions (Citigroup, Deutsch Bank, etc.) openly advised their best clients to consider renewable energy because it works, has many advantages, and the companies that supply them and infrastructure around them are now stable. And a lot of it is the people speaking. According to the US EIA, installation of solar PV in the US increased by 4-fold (400%) from 2010 to 2014. A lot of this growth is due to financial. Solar PV prices have dropped due to the drop in silicon prices and the greater competition for larger projects. But much is also due to entities and companies looking at solar more seriously and accepting it. And all this despite the drop in oil and natural gas prices due to excess supply.

Looking ahead to 2015 and later, if prices of fossil fuels continue to drop, will that cause a reduction in renewable energy and energy efficiency projects? Many analysts believe that renewable power, and particularly solar PV, will remain competitive even in this environment because of continued competition, improvements in battery technology, and greater renewable financing capabilities to satisfy the public and businesses. It is also recognized that fossil fuel prices will only drop a certain amount. Once oil, for example, drops below a certain price, many projects become non-profitable (such as Alberta tar sands and deep sea drilling) and will be halted, reducing the supply and raising the price again. Thus, as energy efficiency projects use less energy and renewable uses free sources (i.e., the sun, wind), fossil fuels will likely be positioned somewhere compared to renewables.

Renewable power will likely grow even more in the future once enhanced inexpensive technology for energy storage is made available. Given the growing acceptance of climate change and the effects of more frequent droughts and severe storms, energy storage to keep operating in case of a disaster is of greater importance, and will be addressed when reliably and affordably developed.

Another energy trend that became very public in 2014 is the need to conserve electricity usage and peak demand nationwide or at least reduce its growth very soon. From urban to rural areas, governments and utilities have understood that if growth of peak demand is not better managed, it will cost regions across the country many billions of dollars in infrastructure upgrades, added costs that will be difficult to pass on to consumers. Therefore, many governments and utilities have expanded their incentive programs greatly to reduce both electricity usage and demand during peak times (summer weekdays from 2 to 6 pm). Probably the biggest outcome of this concern is the mainstreaming and encouragement of entities to implement combined heat and power (CHP or co-generation). With some adjustments, a building’s boiler can also produce electricity from the leftover heat from steam or hot water production that would otherwise be wasted. This home-grown electricity can reduce costs (generating your own electricity, not taken and bought from the grid) and reduce reliance on the grid in case of a failure, which will both provide the building with backup power during a weather emergency or utility problem and lessen the need of the utility to implement a large infrastructure expansion. While CHP has a large upfront investment component, many utilities are offering very large incentives to make it cost effective, as well as reducing the risk of upheavals and losses during an emergency. 2014 will also go down as the year where CHP, although in existence for quite some time, became acceptable and taken seriously.

ConEdison Solutions recently published a white paper with a hypothetical example, using a 1.2 million square foot building in New York City (http://go.conedsolutions.com/l/51452/2014-10-27/h74w#.VJSPvl4AAB). Such a building after investing $3 million in upfront costs for a CHP system and backup generator, would realize annual savings and revenue from reducing their peak demand of nearly half a million dollar per year. This hypothetical installation would also qualify for about $1 million in incentives through the government and utility, for a rough simple payback of 4 years, as well as reliable backup power in case of an emergency.

With these developments and the growing mainstreaming of creative energy solutions and upgrades, 2015 promises to be a greater year for adoption of energy technologies to save you costs, reduce risk from emergencies, free up staff, and otherwise benefit you! Have a happy, healthy, and peaceful New Year!

CCES has the experts to help you assess how well you will do with new energy technologies, such as renewable power, combined heat and power, microturbines, and/or energy efficiency throughout your buildings and portfolio. We can assess not only what will be your immediate financial gains from each perspective upgrade (energy cost savings), but also the ancillary gains, such as reduced O&M costs, making your properties more attractive to renters or buyers, and risk reduction by producing your own electricity. Contact us today at 914-584-6720 or at karell@CCESworld.com.