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State energy chairman talks about selling efficiency

Advocates need to know what consumers want

By David Robinson |

Richard Kauffman, the Cuomo administration’s point man on energy policy, knows that energy efficiency and green energy can be a tough sell, mainly because of the upfront costs and long payback periods.

But Kauffman, the state’s chairman of energy and finance, thinks green energy would be an easier sell if its advocates paid more attention to what motivates consumers to spend.

“Too many of us in the clean energy area – and those of us involved in smart buildings – don’t think enough about the emotions that are involved in a decision,” said Kauffman, who also serves as chairman of the New York State Energy Research and Development Authority.

Electricity costs account for around 2 to 3 percent of a typical budget, so power expenses often aren’t a tremendously burdensome expense that cries out for cost-saving actions, he said. And while doing what’s best for the environment is something that most people would like to do, it’s often trumped on the priority list by more practical and pressing concerns.

So to promote green energy and efficiency, advocates need to know how consumers think and what makes them act. Often, that means playing to the herd mentality of consumers, he said during a forum on Energy Smart Buildings held Tuesday at the University at Buffalo.

If consumers and businesses can see a product in operation, and can see that others are using it, too, they are likely to be more willing to consider it for themselves, Kauffman said.

Some consumers, for instance, support the development of green energy by agreeing to buy their electricity from providers who get their power only from renewable sources, such as wind farms or solar arrays. Other consumers, however, take that a step further and install their own renewable systems, such as solar panels, on their homes.

“Some people want to feel independent,” Kauffman said. “If you want to buy green power over the line, you’re not independent. You’re not sticking it to the man. You also can’t see it,” as you can with a solar array installed on a rooftop.

In a sense, seeing is believing. Kauffman said there’s added value to visible green energy systems, even ones as small as solar panels on an individual home.

“When your neighbor does something, you feel like maybe you should be doing it, too,” he said.

But energy efficiency upgrades and renewable energy often costs more than conventional sources, and that’s where government funding comes in to help make those projects more affordable. It also helps demonstrate which technology works and what doesn’t, and it also allows other potential early adopters to see what a particular green energy investment entails.

That often means a big role for government agencies, either by providing funding for energy projects, through agencies such as NYSERDA or the $210 million NY Green Bank initiative the state launched in January to help finance clean energy and energy efficiency projects.

The New York Power Authority, for instance, spent $280 million last year on energy efficiency projects and expects to spend between $250 million and $300 million annually on similar initiatives through 2020. Most of those projects involve state buildings, as part of New York’s effort to reduce power consumption at state-owned facilities by 20 percent.

“We’re using the government buildings as a test bed,” said Gil C. Quiniones, the Power Authority’s president and chief executive officer.

But Kauffman said it goes beyond energy efficiency and the environment. Green energy could also become a key part of the state’s economy if those efforts gain enough momentum.

“We really have an opportunity to imagine a whole new energy system,” he said.

“But the only way to do that is to create more innovation for customers. And the only way we can do that is to create more competition for customers,” he said. “We really need markets to work faster if we’re going to get the economic development we want in the state of New York and get the energy efficiency that we want.”