Constant news detailing the devastating effects of extreme weather events, combined with the inaction and ineffectiveness of political leaders, can make us feel powerless and frustrated against climate change. As the Director of Sustainability for the City of Ithaca, New York, it’s my job to figure out how to adapt and prepare our community, and to mitigate the cause of climate change by reducing emissions through creative, timely and cost-effective technological and financial solutions.
While our more than 6,000 buildings give our city character, they also produce at least 40 percent of our total emissions, more than transportation or any industry. Equitable building decarbonization is critical to Ithaca’s long-term strategy to reduce carbon emissions and to a moral mandate to address historic and economic inequities. To achieve this, we needed to think outside the box and develop a plan to tackle each piece of this giant puzzle.Ithaca’s climate goals include decarbonizing and electrifying all its buildings — not just municipal ones — by 2030.
Change the way you look at your city
With 30,000 people, Ithaca can be perceived as small. Our emissions — all 400,000 metric tons — may seem like a drop in the bucket compared to larger cities. However, the city is also big in terms of ambition and, in a counterintuitive way, market opportunity. Our building stock represents a sizable market opportunity, comprising thousands of buildings primed for investment.
To electrify our buildings, Ithaca will need to install thousands of heat pumps, induction cooktops and water heaters; it also means more efficient building envelopes, windows and ventilation systems. Technology companies and private capital investors specialized in energy efficiency and electrification see the investment potential of our city.
With that in mind, we set out to develop a nation-leading program to retrofit and electrify every building in the city, relying almost entirely on private capital. So we issued a request for proposal soliciting equitable financial and technological solutions from private and nonprofit organizations.
While each proposal detailed a different solution to the same problem there was a clear desire to create a one-of-a-kind public-private partnership to eliminate half of Ithaca’s emissions through building electrification. For these companies, this goal represented an aggregated market opportunity, a pipeline of customers and a low-risk chance to create a continuous source of cash flow.
Align interests
Ithaca’s mission to decarbonize its building stock was welcomed by industry, investors and technology companies. Our RFP incentivized new partnerships between financial companies, contractors, engineering firms, unions and non-profit organizations. It opened the door to an efficient model for public-private partnerships capable of delivering a shared-savings financial solution for retrofitting and electrifying commercial and residential buildings. Simply put, the program enabled a turnkey solution for Ithaca residents, and a long-term cash flow opportunity for technology companies backed by financial institutions.
By transitioning every building in Ithaca to be fully electric, we estimate that, on average, energy costs could drop as much as 30 percent each month, when compared to current consolidated electricity/gas utility costs, estimated around $300 per month per household. In some cases, the savings could be divided between the consumer and the investors, reducing utility costs, guaranteeing cash flow and enabling a long term return on investment.
A key element of our plan is the scale, without which the city would not be able to develop economies of scale or acquire true bulk purchasing power. Scale affects the cost of materials, appliances, workforce and even capital. Specifically, by aggregating 6,000 buildings, the city managed to create a diverse portfolio of what otherwise would have been small-scale, high-risk electrification projects. This way the cost, risk and return on investment could be balanced across the entire portfolio.
Turning your home over to a team of electricians and construction workers for major upgrades requires trust.
Together with energy efficiency and electrification partners BlocPower and Alturus, we’ve raised over $100 million from private capital to fund the first phase of our project. The funds will cover the upfront cost of appliances, materials and labor for the retrofitting and electrification of approximately 1,000 residential and 600 commercial buildings. We expect to raise the necessary capital to continue working on the remaining 4,400 buildings.
Decarbonizing takes a village
By re-inventing the role of local government to articulating new partnerships, the city government became a convener, capable of managing some of the risks associated with local markets, economy and policies. This enabled Alturus and BlocPower to assemble a constellation of investors, technology companies, contractors, community-based organizations and building owners, capable of collectively taking on this unprecedented challenge.
There was one more critical piece that we needed in place: the community. Turning your home over to a team of electricians and construction workers for major upgrades requires trust. For this, we turned to outreach partners already embedded in the community: Cornell Cooperative Extension of Tompkins County, the Latino Civic Association, Black Hands Universal, Southside Community Center, and Historic Ithaca. The support and trust they built with their neighbors for this initiative is foundational to its success.
Electrifying all 6,000 buildings is a job that the City of Ithaca could never accomplish on its own, but aligning the interests of all these groups is definitely something a local government can do.
Be part of structural change
Ithaca has the highest income inequality in New York, and the volatile and rising cost of energy is a burden on poor families, especially during our long, frigid winters. An equitable energy transition can help families save money, and improve their quality of life by making their homes safer and more comfortable to live in. This is why climate justice communities — who have been most burdened by pollution and the impacts of climate change — will be the first to take part in the program.
This initiative will promote public health by improving indoor air quality. A growing body of research tells us that gas-fired appliances are dangerous in the home. Gas stoves, for example, leak methane round the clock, and with that methane comes toxic pollutants including benzene, a carcinogen for which there is no safe exposure level. Kids who grow up in homes with gas stoves are 42 percent more likely to have asthma. The cost of fossil fuels — our dollars, our health, our safety, our air, our planet, our lives — is just too high.
Ithaca’s blueprint for decarbonization can be adapted for other cities. In larger jurisdictions with more purchasing power, the scale of the project works in your favor by making electrification more affordable and with potentially bigger payoffs.
By initiating this change through our buildings, Ithaca is breaking our toxic reliance on fossil fuels, saving families money, and improving people’s lives. Local government can catalyze meaningful progress. We just need to think outside the box.