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In addition to conserving resources, alternative energies—and the federal and state policies—relating to them offer electrical contractors many opportunities to provide their customers with new technologies and value-added services and expertise.
Renewable energy sources, including solar, wind, hydropower, geothermal, biomass, fuel cells and hydrogen, save natural resources and are considered by many to be environmentally superior to conventional coal and oil. However, the present cost-effectiveness of some of the newest technologies—such as fuel cells, hydrogen and ocean energy—varies. Cost-related barriers to installation are expected to change as these alternatives mature and gain mainstream acceptance.
It is a myth that building environmentally conscious facilities is much more expensive than constructing traditional buildings. In fact, according to the law firm Allen Matkins, 61 percent of respondents to a survey—conducted at the December 2005 Construction Super Conference—said LEED construction added less than 3 percent to a project’s total costs. Green building, however, takes a different mindset, with sustainability usually tacked onto a project as an afterthought and made to appear as an easily cut cost, according to a July 2007 report by Davis Langdon, a San Francisco-based consulting firm that focuses on helping architects and building owners manage construction costs.
Alternative energy sources can be applied to every market in which electrical contractors engage, including government, healthcare, commercial, residential, educational, hospitality, financial, grocery and box stores, and other retail outlets.
Government incentives and energy codes
In the legislative arena, federal tax credits for energy-efficient systems are available through the Energy Policy Act of 2005 (EPAct). For example, residential tax credits are available for qualified solar water heating and photovoltaic systems that were placed in service between Jan. 1, 2006, and Dec. 31, 2008, and are for 30 percent of the cost of the system, or up to $2,000. EPAct also offers various incentives for home builders, including a $2,000 tax credit for new energy-efficient homes that achieve 50 percent energy savings for heating and cooling over the 2004 International Energy Conservation Code (IECC) and supplements, but at least one-fifth of the energy savings must come from building envelope improvements. Further more, manufacturers of energy-efficient appliances are eligible for tax breaks, which may lead to increased availability and a reduction in prices for consumers and installers.
For commercial buildings, a tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing facilities that save at least 50 percent of the heating and cooling energy of a building that meets the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 90.1-2001. Partial deductions of up to 60 cents per square foot can be taken for measures affecting the building envelope, lighting, or heating and cooling systems. The credits are available for systems placed in service in the extended time period between Jan. 1, 2006, and Dec. 31, 2008. The U.S. House of Representatives also has recently approved H.R. 2776, which would extend the 30 percent solar energy investment tax credit for businesses through 2016, though the conference between the House and Senate on the bill has yet to take place. Title IV of H.R. 2776 also establishes the Solar Energy Research and Advancement Act of 2007 and provides funds, subject to appropriation, to support the research, development and commercial application of solar energy technologies. Special emphasis is placed on concentrating solar power thermal storage research, solar lighting and cooling, and advanced photovoltaic technology development.
June 2007 saw several amendments to the Senate Energy Bill, including the establishment of minimum lumens per watt standards for light bulbs of not less than 30 by 2013 and not less than 45 by 2018, along with the authorization of a six-year, $60 million lighting technology research and development program. There also was an amendment to establish a public program funding initiatives that provide training for jobs created through renewable energy and energy-efficiency initiatives, and a state grant program was established for the distribution of medium-base compact fluorescent lamps to households in each state.
The current status of alternative energy sources
Technological advancements in the sources of alternative energy occur every day. Contractors need to be familiar with and understand these technologies, so they can deliver them to an increasingly demanding end-user.
For example, some estimate geothermal energy, which is heat from the Earth and a clean, renewable resource, could produce 42 million megawatts of power. Direct-use applications of geothermal energy include space heating and cooling, food preparation, industrial processes, etc. Geothermal heat pumps draw on the relatively constant temperature of the Earth’s interior and are used for both heating and cooling—the Environmental Protection Agency considers them to be one of the most efficient heating and cooling systems available.
There are four widely used types of geothermal power plants: flash power, dry steam power, binary power and a flash/binary combined cycle plant. Three more types of geothermal plants are highly experimental, with research and demonstration projects being pursued worldwide. In addition, more than 80 percent of the jobs geothermal energy has created are full-time, permanent positions and include a number of trades, including electricians.
Another emerging alternative energy source comes from the oceans. The term “ocean energy” is used to describe all forms of renewable energy derived from the sea, including wave, tidal and ocean current energies; offshore wind; and salinity gradient and ocean thermal gradient energy. Wave, current and tidal forms of ocean energy appear to be abundant, and demonstration projects have shown promising results for ocean energy’s potential to provide electrical power. Section 931 of the EPAct authorized the secretary of energy to conduct a research, development, demonstration and commercial application program for ocean energy. In addition, Senate Amendment (SA) 1539 to the Senate Energy Bill promotes marine and hydrokinetic renewal energy and the development of power generation from waves, tides and currents.
Solar energy, one of the longest-used sources of alternative energy, enjoys federal tax credits and mainstream market acceptance. Clean Edge, a company that conducts research on clean technologies, reports that the market for solar energy increased 55 percent from 2004 to 2005 and will increase from an $11.2 billion industry to a $51.1 billion industry by 2015, with the costs for grid electric power and solar power about equal by that time.
On the other hand, wind power still is struggling to gain acceptance. Using today’s turbine technology, there is theoretically enough wind power flowing across the country to supply all of our electricity needs. However, wind power currently supplies less than 1 percent of the nation’s electricity, and only a small portion of the technology’s vast potential will likely be tapped in the near-term unless there is a shift in energy policy priorities. The federal tax code includes a production tax credit (PTC) for wind energy and a five-year accelerated depreciation schedule for wind turbines. However, as the federal government and states adopt more strict environmental regulations and standards, wind power will likely become more competitive with current mainstream forms of electricity generation, as wind energy does not emit pollutants, wastes or greenhouse gases.
Finally, opinions vary on the future of nuclear power as an alternative energy source to coal and oil. Regardless of people’s views on nuclear energy’s risks—potential accidents or attacks, unresolved radioactive waste disposal issues, and community opposition—existing U.S. plants are performing well, according to the Energy Information Administration (EIA). In addition, nuclear fuel costs are low in contrast to oil and gas and are relatively stable. Production costs for nuclear power, operation and maintenance also are low, averaging 1.8 cents per kilowatt-hour, which roughly matches coal and is significantly below the costs of operating a natural gas plant. Despite the relative attractiveness of nuclear power and the fact that existing plants have increased the electricity they produce by 66 percent, there have been no new plants built since the 1970s, and the last completed plant went online in 1996. If it wishes to expand its reach, the nuclear industry must build new plants and address risks early in the cycle.
And, finally, here’s LEED
Another area of opportunity for electrical contractors in alternative energy and sustainability is the increased focus by building owners and jurisdictions on Leadership in Energy and Environmental Design (LEED)-certified new construction. The LEED Green Building Rating Program is, in the words of the U.S. Green Building Council (USGBC), Washington, D.C., “a national consensus-based, market-driven building rating system designed to accelerate the development and implementation of green building practices. In short, it is a leading-edge system for designing, constructing, and certifying the world’s greenest and best buildings.”
In 2007, more than 15,000 design and construction professionals in the United States became accredited through the USGBC’s LEED Accredited Professionals (AP) program. This statistic is evidence that interest is increasing in LEED-certified construction. In total, approximately 40,000 architectural, engineering and construction (AEC) professionals now are accredited. Of the 348 firms surveyed in 2007 by Building Design & Construction, 93 percent reported having at least one LEED-certified AP on staff, and more than half said they have 10 or more LEED APs. These statistics mean contractors that wish to be involved in the growing demand for LEED-certified construction need to consider investing in having accredited personnel on staff.
Your electrical contracting firm already may be investing in LEED APs, growing your business in solar or learning about energy tax credits, but if not, you may be left behind. With the strong growth in these markets, and the ever-increasing involvement of government bodies, inaction may be your biggest folly. EC
BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached 410.394.6966 or [email protected].
About The Author
Darlene Bremer, a freelance writer based in Solomons, Md., contributed frequently to ELECTRICAL CONTRACTOR until the end of 2015.