Greenwashing is a derogatory term which is gaining some currency because of all the marketing hype. Even the FTC has recently beefed up its marketing guidelines to prevent greenwashing, and who knows, may go after offenders. The criteria are interesting, and should be grounds for some rethinking of certain business strategies. Greenwashing lawsuits are on the rise.
If you call your product or service "green" you need to be able to back it up with specific benefits and verifiable claims. There goes the ConEdison GreenTeam. There is nothing green about them that I can tell. On this blog I have discussed in-depth how energy efficiency and green energy are not synonymous, and even often mutually exclusive, even if green energy must incorporate energy efficiency in its own right. Clearly, the implied claim rests on the more general confusion that 'energy saving' is somehow green, let alone interchangeable with green energy in achieving sustainability.
The implicit assumption in many programs is that renewable energy and energy savings will add up to create sustainability, but that is only the case in very limited circumstances, and requires proper economic analysis and engineering. In most cases, the opposite is true. Does it make any difference if the Titanic goes down in 5 minutes or 10? Do you want to invest in that proposition? This is about rearranging the deck chairs on the good ship and it has no relevance to any meaningful concept of sustainability. This approach is all about appearances, it is a mere marketing ploy, because energy savings merely increases demand, so it expands the franchise. If in doubt, check out the recent book by Steve Hallett: The Efficiency Trap: Finding a Better Way to Achieve a Sustainable Energy Future. This book is the behavioral corollary to the problem of diminishing returns with "investing" in energy savings, which arguably is not an investment at all. It is unclear why property owners should foot the bill for becoming better customers of their energy providers if they have other options.
Energy Savings do not add up
The confusion generally starts from the top, for even at the highest levels the confusion that all energy savings and energy efficiency is 'green' is nearly universal. Besides Steve Hallett's behavioral argument that efficiency expands demand, the sad economic fact is also that energy savings is a dead-end street from an investment standpoint, because of diminishing returns. On top of that, because of good engineering reasons, energy efficiency and renewable energy are often mutually exclusive. In many cases, the energy savings incentives reduce the adoption of renewable energy, and are thus anathema to sustainability. Accordingly, for the most part, institutions like NYSERDA are often really a customer retention program for the energy industry.
- Energy efficiency of a fossil-fuel burning energy infrastructure prolongs the use of fossil fuel by extending its economic attractiveness.
- Energy efficiency is only green in the context of renewable energy.
- Incentives based on energy efficiency are a waste of money, for they postpone the switch to renewables, and subsidize energy companies and equipment manufacturers at the expense of property owners. Energy companies could legitimately offer incentives for investments in efficiency on the basis of customer retention, but public moneys should not be used, nor levies on customers, like the NYSERDA funding through the SBC.
- Energy savings in a fossil fuel context may arguably be green, if there is no feasible alternative, then it's simply the best alternative. But as long as economically viable renewable alternatives exist, any semblance of a green claim for any energy savings that displace viable investments in sustainability are a patent lie.
- Any financing or tax incentives that promote specific equipment or equipment standards (such as Energy Star) as prerequisites for qualification for subsidies, or even financing at all, should be outlawed if they distract from the overall project and force property owners to make sub-optimal decisions. However well intended, this type of tokenism amounts to greenwashing.
Greenwashing: falsifying claims
- Tankless hot water heaters are nearly always a bad idea, and certainly should not qualify for an energy star program. Domestic Hot Water storage is one of the cheapest and most affordable energy storage solutions in renewable installations. Both with solar thermal and with geothermal, heat can be stored, for geothermal in pre-heated water, and for solar thermal as process heat, or also as preheated water for consumption. Tankless hot water heaters should only ever be used where we are unable to access either of those two technologies.
- Solar PV PPAs, are nearly always a bad idea, and a gross consumer swindle. A nice shiny solar array on your roof saves you pennies on your electric bill, and shows the neighbors your house is "green," but it deprives you for 20 years of valuable real estate, which could have been put to better use with either wind power, which in many cases has better energy yield, or solar thermal which has 700% higher efficiency (because of 500% higher output and the ability to store energy). Property owners are simply getting bamboozled by would-be energy efficiency experts, aided by various incentive programs.
- Generally any program, such as most PACE programs, NYSERDA MPP, (and equivalent programs in other states), and special, subsidized financing for energy retrofits, which mandate energy savings to trump renewable energy really lure property owners into making substantially bad decisions, without ever considering better alternatives.
How energy savings kills renewable energy
- Green Fools Only
Energy savings claims, and the appeal to "green" mainly trade on emotional appeal, but they are simply a sales tool for equipment manufacturers and for energy companies. In the selling process, there is a whole energy savings and energy efficiency industry that has sprung up, some contractors, but many of them posturing as consultants, who in essence posture as if they are helping building owners, but between employing the false objective of energy savings, and the high school level financial modeling based on the payback of equipment, the economic decisions that property owners should make are dumbed down to the point that owners sacrifice the potential for property appreciation by embracing ineffective programs.
As long as we are modeling energy savings as a one time objective at a given point in time, and employ equipment payback as the criteria, and falsify the decisions further with incentives, we are bamboozling property owners into inferior economic decisions, which limit the potential for property appreciation. The simple fact is renewable energy is not an energy savings technology, but an investment in generating capacity, and a permanent upgrade of the asset, which would require a proper capital budget. It is a proper investment decision. Energy savings is not really an investment but an operational expense, so it is bizarre that in effect energy vendors are getting owners to be liable for investments to ensure that they continue to buy their energy, as in solar PPAs. In other words, by using payback as a criteria, presentations are always handicapped in favor of quick energy savings fixes, and the more capital-intensive renewable energy choices drop to the bottom of the list, because the 25 or 30 years of no energy bills do not enter the equation, and people are fooled by the fact that it takes a few years more to pay off the equipment.
The methodologies that are used handicap renewable energy and are backhanded subsidies to the fossil fuel industry.
Conclusion
Energy savings does not add up to sustainability. It has green pretensions but it cannot deliver. It may or may not technically violate the FTC's rules for green marketing claims, but it does the opposite of what it claims. Prioritizing energy savings in existing fossil fuel based infrastructure serves to postpone sustainability, and is de facto a form of greenwashing, and deprives property owners of superior options.
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