Macroeconomic pressures over the past three years have combined to create the perfect storm of inflation, unemployment, and severe declines in industrial productivity. The slow, evolutionary pace of change in the utilities industry cannot keep upwith exponential demand increases, the need to address aging infrastructure, and commodity supply risks associated with carbon dioxide emissions.
The new economy of growth, prosperity, and security requires a revolutionary departure from today’s energy paradigm. What Americans need is a new energy economy. Businesses that succeed in the future will use on-site, renewable energy solutions, maximize energy efficiency, and track emissions reductions as closely as profits. Investors will create renewable energy asset portfolios using monthly power purchase agreement (PPA) annuities for income and the energy-producing equipment as a depreciable market asset. Meanwhile, businesses and homeowners will purchase longterm, lower-cost electricity without an upfront investment. Businesses with a smart energy focus today will mitigate financial downturns, reduce expenses, and increase profitability.
Achieving success in developing a new energy economy will require three key components:
- Technological advances that automate conservation and efficiency processes, and provide clean-energy alternatives at a payback the market supports;
- Building and home occupants that modify their behavior to make choices that reduce energy demand; and
- Regulations that reduce subsidies for fossil fuels, reward reduction of carbon dioxide emissions, and create financial incentives.
According to the United Nations Environment Program, global sectors that will be particularly important in terms of their environmental, economic, and employment impact are renewable energy, buildings and construction, transportation, basic industries, agriculture, and forestry. For a new energy economy to succeed, focus within these industries will need to be on conservation and efficiency opportunities, renewable energy development, and an entirely new market of financial models for completing them.
Read full article Urban Land Magazine, Co-authored by Richard Lucy (CPA, CEM), Sep 2009. “The New Energy Economy”. PDF