Obama, Better Buildings and the Innovators

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When Obama unveiled his “Better Building Initiative” last week, it wasn’t just the usual architects, builders, and energy efficiency service companies that perked up with interest. A whole new segment of energy efficiency companies saw opportunity: the innovators.

Emissaries from the high tech world, the innovators are a growing force in energy efficiency. They bring web and wireless to what was once a field more about windows and weatherization.

Obama’s plan would create new business for the innovators by providing incentives to reduce building energy use. Buildings represent a large market for the US energy efficiency industry because they eat up 20% of the nation’s energy. Obama has proposed tax deductions, financing, competitive grants and other incentives as part of his budget.

Where do the innovators fit into this? Daintree Networks offers one example. The Silicon Valley company provides open platform, wireless technology for lighting controls. Lighting is a big deal in buildings; it is responsible for about 40% of a building’s energy bill. Lighting controls increase efficiency by automatically shutting off or dimming unneeded lights. The controls are often used in conjunction with occupancy sensors. The sensor detects when people empty a room and signal to the control system to turn off the lights.

“Anyone who is considering lighting upgrades now is asking about controls. It is no longer just about replacing light bulbs and fixtures, but about the control implementation,” said Danny Yu, Daintree Networks CEO.

With controls in only about 7% of commercial buildings, the market potential is large for innovators like Daintree Networks. So Yu has his eye not only on federal energy policy, but also activity by the states.

“We are very keen on seeing what policies are coming down the line, exploiting them with innovation, and then educating the market. We have focused on California and the Northeast,” Yu said, adding that prime areas for lighting controls have the “magic combination” of high electric rates and strong efficiency incentives.

But he especially likes the Obama plan because of its national scope. Incentives that vary from state to state tend to discourage energy efficiency efforts that scale across geographic boundaries.

“The Obama Better Buildings Initiative is an important first step in establishing national policy to drive energy efficiency in the commercial building sector. Energy efficiency within existing buildings should be considered a massive and mostly untapped resource. Adding greater incentives, financing options and a more consolidated approach to strong building regulations helps to solve many of the challenges currently standing in the way of greener facilities,” Yu said.

Will the Obama’s initiative win Congressional support? Yu is optimistic. “Energy efficiency is often the low-hanging fruit. The government has realized this,” he said. “Among the innovation companies, there is a very clear sector rotation into energy efficiency. The government seems to be following the venture capital community. We are very worthy in this category. I’m very excited to see the validation of the business model.”

Details about the Obama Better Building Initiative are here.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

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Elisa Wood is an editor at EnergyEfficiencyMarkets.com. She has been writing about energy for more than two decades for top industry publications. Her work has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

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