Seattle strives for neutral

What is the CRIF?
The Carbon Reduction Incentive Fund (CRIF) is a part of the federal stimulus-funded Community Power Works Program (CPW) in Seattle. By providing wrap-around energy efficiency services for residential, commercial and industrial property owners, the Seattle Office of Sustainability and Environment hopes to stimulate the energy efficiency job sector through the CPW. The CRIF was designed to motivate property owners to take action on the energy efficiency work recommended by the energy assessments of their buildings. By using the modeled energy savings and expected lifetimes of each measure recommended in the assessment, building owners earn the greatest incentive to do the measures with the most carbon savings associated with them. By applying emissions factors appropriate to the fuel source of the appliance involved, the CRIF allows an agnostic incentive to reduce carbon impacts of existing buildings.

How we got to be a part of the CRIF
Green Canopy worked early on with Enterprise Cascadia to model potential approaches to creating an energy efficiency lending fund for Seattle. We co-authored federal grants that provided seed money for what later became the Community Power Works Program and the Home Retrofit Coordinator for the CPW invited Green Canopy to help the program become operational. We modeled the costs and potential carbons savings of the retrofits incentivized by the CRIF and were even able to pilot the first energy assessments through the CRIF calculations.

How it’s different than other efficiency program approaches
While city or utility sponsored energy efficiency programs are nothing new, the CRIF takes a new, market-based approach to the incentive process. By actually purchasing the rights to the carbon savings resulting from the improvements made during a retrofit, the program is able to aggregate the carbon emissions and take the first important steps towards certifying the savings and reselling them on the voluntary carbon market. Emissions Reductions Credits are traded on an exchange in Europe and usually come from industrial greenhouse gas emission reductions or destruction. If the emissions reductions purchased with CRIF funds could be resold on the voluntary carbon market it could represent a revenue stream to make this incentive program self-sustaining.

Lessons learned - the truth is in the numbers
While whether the energy savings modeled by an energy audit accurately portray the energy used in the building when occupied is debatable, the avoided carbon emissions associated with the efficiency measures are even tougher to measure precisely. The complications of modeling the savings associated with caulking a window or insulating an attic are compounded by the nature of choosing a carbon emission factor per kWh. The low emissions associated with Seattle’s hydropower result in a low carbon cost to our electricity. This blessing becomes a curse when it is applied to the carbon savings associated with energy efficiency improvements in a city that has boasted a goal to become “carbon neutral.”  Seattle City Light avoids this low multiplier by using an emissions factor for efficiency improvements from the greater electric grid of the NW from which they must buy the next kWh, should Seattle max out their own hydroelectric generation capacity.  While this makes efficiency gains that reduce the electricity needs of a home carry a more substantial carbon emission impact, it also means a fuel switch scenario will be undervalued.

To sell or not to sell
There are significant hurdles to undergo before a carbon emission reduction can be third-party-certified and sold on an exchange. These certifications provide credibility to a developing market but command a significant price to the carbon supplier.  The City of Seattle could avoid those costs by simply claiming the emissions avoided as a result of the CRIF to offset other city emissions.  This would help them meet the goal of carbon neutrality quickly at no additional costs.  Alternatively, by selling the carbon offsets the City of Seattle could lead the nation by proving the market for carbon emissions from city programs and prove that at least one stimulus-funded project has the potential for survival after the federal dollars run out.

Aaron Fairchild, CEO of Green Canopy Homes, has been an executive manager in real estate and real estate finance in several capacities. He is a third generation lender and entrepreneur and has a deep understanding of residential and commercial finance, residential construction, and energy efficiency. Aaron is a graduate of the Executive MBA program at the University of Washington. His company worked early on with Enterprise Cascadia to model potential approaches to creating an energy efficiency lending fund for Seattle and they co-authored federal grants that provided seed money for what later became the Community Power Works Program. Green Canopy was invited to help the program become operational by the Home Retrofit Coordinator for the CPW. They modeled the costs and potential carbons savings of the retrofits incentivized by the CRIF and piloted the first energy assessments through the CRIF calculations.

The Pivotal Leaders business network aims to grow the Northwest clean tech industry by cultivating leadership in Oregon, Washington, Idaho and British Columbia. Through this twice-monthly column, members of the Pivotal Leaders network take turns discussing some of the most pressing issues and trends facing clean tech entrepreneurs in the Northwest and beyond.

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