Johnson Controls, a diversified company in the
building and automotive industries, has welcomed President Obama’s plan to
invest nearly $4 billion in energy efficiency upgrades to public- and
private-sector buildings over the next two years.
Improving the energy efficiency of public and
private buildings is one of the key investments the country can make: it helps
reduce energy costs and puts people in local communities to work right away.
Johnson Controls has been a worldwide leader in building controls and energy
efficiency for more than 125 years and has developed, installed and guaranteed
the savings for more than 2,500 energy efficiency projects globally.
Building Efficiency in the Public Sector
The President announced nearly $2 billion in
financial commitments and directed federal agencies to utilize
performance-based contracting to undertake energy efficiency upgrades of their
buildings. Performance-based contracting allows federal agencies to make
capital improvements that reduce energy consumption and improve energy
security. These projects use guaranteed utility and operational cost
savings to pay for the improvements over time.
The President is proposing to invest in two
years approximately the same amount that has been invested in federal
performance-based contracting projects over the past decade. Performance-based
contracting allows the federal government to make infrastructure investments
today that are guaranteed to reduce their long-term energy and operating
expenses without using taxpayer dollars.
Johnson Controls has saved more than $19
billion in energy costs for public- and private-sector customers since 2000.
Since the beginning of the federal Energy
Savings Performance Contracting (ESPC) program, Johnson Controls has
implemented more than 75 projects for various federal agencies, including the
Army, Department of Energy, Air Force, Navy, General Services Administration,
Department of Veterans Affairs, Justice Department and Department of the
Interior. For example, Johnson Controls is working with Oak Ridge National
Laboratory (ORNL) in Oak Ridge, Tenn. on an $89 million energy savings
performance contract with a guaranteed annual savings of $8.2 million.
The company is currently guaranteeing over $5 billion in energy and operational
savings from its portfolio of performance-based contracts, including state and
local government projects.
Johnson Controls also sees The White House’s
plan as a way of jump-starting energy efficiency upgrade activity in the
private sector. The combination of building owner commitments,
availability of private-sector funding and improvements to the federal tax
deduction for energy efficient commercial buildings addresses a number of the
critical barriers to investment.
Results of Johnson Controls’ 5th annual Energy
Efficiency Indicator Survey, a global survey of nearly 4,000 private and public
sector building owners, reinforces the importance of access to financing to
enable energy efficiency improvements. More than a third (38 percent) of the
respondents reported that access to capital remains the top barrier to
improving energy efficiency in their buildings.
Attracting private capital investment is key
to unlocking large-scale efficiency upgrade opportunities for commercial
buildings. For example, our performance-based contract with the Empire State
Building which President Obama mentioned in his remarks on Friday is on target
to save $4.4 million annually and reduce energy use by more than 38 percent.
The industry has already seen the great financial and environmental
impact these projects can have for commercial buildings. The industry is
encouraged that more private-sector building owners will now be able to take
advantage of this opportunity.