A couple of weeks ago, the New York Times ran a fascinating piece on a new kind of financial institution: the green bank, which offers lower loan rates to finance energy efficiency and sustainability projects of various kinds.  It seems that the new banks are having some trouble staying afloat, partially due to the generally dismal economic times and also because, as with many businesses, start-up costs are high in the first few years of a bank's existence.

The Times quotes Bert Ely, a banking consultant from Virginia, who is skeptical about green banking in general:

"I'm not convinced this is ultimately going to be very profitable," he said, noting that the green banks appeared to have relatively high operating expenses — perhaps, Mr. Ely said, because of the need for specialized expertise among loan officers, among other factors. Also, providing discounted interest rates, while good for borrowers, can detract from a bank’s income, Mr. Ely observed.

The latter point is self-evident, but the first is questionable, or it can be for certain kinds of green projects.  Replacing incandescent lightbulbs for compact flourescent lights, or better yet LED lights, is a sure-fire way to reduce electric usage, and the return on investment is well-known.  More complicated projects, like insulating a basement or an attic, may well raise some detailed questions about the kind of insulation or sealant to use, but the costs can be "rounded up" without too much trouble.  It's a bit more difficult to determine how much energy will be saved due to a given insulation project, but here again, some relatively straightforward tests carried out by a trusted energy auditor can provide good estimates, which can in turn give a good idea for the return on investment.

I think the real issues that are troubling green banks are a little more mundane.  While I've never visited such a bank, my guess is that all of the banks listed in the Times article have faily sophisticated marketing efforts, modern green branch offices, and all the other trappings of a modern green business.  All of that costs money, and in a cutthroat industry like finance, high overhead means either higher loan rates or lower profit margins, or both.  Moreover, like many banks, green banks are probably most interested in relatively large loans, whose interest rates are likely to generate profits necessary to offset the cost of the loan officer's time in processing the loan.  However, a vast number of energy efficiency projects are very small-capital loans - a whole household full of lightbulbs might not amount to more than a few hundred dollars, and an insulation project can easily come in under one thousand dollars.  No bank with a nice branch office will ever bother with a loan that small; there's no way to make a profit on it.

However, some of these low-capital projects are also very, very safe investments, so long as the borrowers are trustworthy and solvent.  The time to recover the costs of a CFL project or an insulation project might be measured in months, and the recovery time for a hot water heater replacement might be only a few years (especially if utility discounts are available).

In other words, this is an ideal space for micro-loans or low-overhead lending operations.  Using a system similar to the Kiva API, it would be possible to build a website to support peer-to-peer micro-lending for low-capital green projects with near-certain positive return.  These loans would probably have some fair amount of risk - all loans have some risk, and in order to keep overhead down, it would probably not be possible to thoroughly vet borrowers.  Then again, the low size of the loans would keep risk down, and reputation systems could further mitigate risk.  Such a system could help finance a high volume of relatively low-capital green projects, which is exactly what we need to fight global warming.

By way of the great folks at Green Lights comes this great new rap from members of the Louisiana Green Corps:

I wonder if you'd call this socially conscious hip-hop?  It's a great way to kick off the weekend, regardless!

One of the biggest challenges in greening our economy is green job training.  GreenBiz recently highlighted the efforts of Green for All (one of my favorite green organizations) and the state of California in leading the way on green-collar job training.  I applaud these efforts to develop solid training programs for green-collar jobs, but I believe there are also opportunities for smaller-scale green training.

In particular, I'm thinking about free online videos for simple energy efficiency tasks, like caulking and storm window insulation.  If you search YouTube for "storm window installation", you'll eventually find the following:

This video is actually pretty good, and it's a testimony to the diversity and quality of video available at YouTube (despite all the static).  But it's possible to improve on this user experiene quite a bit, in a number of ways.

I'd like to see a site dedicated exclusively to providing users with instructional videos about weatherization tasks, and perhaps some overview videos that give some high-level information about how weatherization works and why it's important.  Such a site would feature the following:

• The ability to browse videos by type of task and difficulty level
• Multiple videos showcasing different approaches to the same task (e.g. one video for vinyl storm windows, and another for permanent storm windows)
• Ratings and comments to allow users to review a video and provide helpful critiques
• Ecommerce features to allow users to buy related products for their weatherization tasks
• Community features to allow users to get together with others in their area and participate in a weatherization project

Using Drupal and embedded videos with YouTube (together with some helpful Drupal modules like Five Star and Ubercart), it would be relatively easy to build such a site on a low budget.  The revenues for weatherization product sales could help pay for maintenance.

I think the main trick would be driving traffic to the site and keeping users engaged over time.  The site would certainly be targeted towards motivated individuals, who are interested in energy efficiency and like to roll up their sleeves.  While it wouldn't be as comprehensive as a bona fide job training program, such a site would be one more approach to making weatherization projects more common and widespread, and could help contribute to lower energy use.

Although weatherization certainly requires a lot of roll-up-your-sleeves, get-your-hands-dirty work, it's also a very data-intensive process.  Alongisde their expertise about such practical matters as the relative effectiveness of storm windows and rigid foam insulation, weatherizers must also be able to manage a lot of different kinds of data.  The way things are done today, a lot of that data is stored in someone's head, on a piece of paper, or possibly in an old legacy desktop application.  Using mobile applications on a smart phone, weatherizers could see dramatic improvements in their work processes, while making the weatherization process more accessible.

A weatherization project starts with an assessment, or energy audit, to identify problems that might cause a home or building to be inefficient.  For each problem the audit produces, there are usually at least a few different solutions which can be applied, with each solution having tradeoffs in terms of cost, efficiency improvements, and long-term effect on the "livability" of the house or building.  The weatherizer and building owner must come to an agreement about which problems will be fixed.  Prior to getting to work, the weatherizer must gather the tools, materials, and safety equipment needed for the work.  The weatherization project itsef often reveals further problems, or sometimes requires future maintenance and follow-up.  It's frequently important to keep track of heat and electric usage, both before and after the audit - both as a way of demonstrating the project's return on investment, and to validate that the work was completed correctly.  In many cases, the building owner or weatherizer must carefully track expenses in order to qualify for government or utility rebates.

At every step of this process, there's a lot of data to track.  That can be a stumbling block for many weatherization projects.  It can introduce errors, excess cost, and complexity that can make a weatherization project less effective at reducing energy use.

To solve these problems, we need good software that is closely integrated with the realities of weatherization work.  It needs to be lightweight, flexible, and mobile.  It needs to account for architectural techniques and possible sources of energy leaks in a wide variety of homes and buildings.  It needs to support rich record-keeping, integrating tightly with mobile cameras and utilizing voice annotations.  It needs to integrate with third-party data services, for retrieving and managing data like water and electricitiy usage.  And above all, it needs to be easy to use.

A mobile software platform like this could do much more than make life easier for weatherizers - although that would be an important goal in its own right.  Through distribution in venues like the Apple iPhone store, such a program could also inspire a wave of do-it-yourself weatherization, by dispersing weatherization know-how.  Moreover, such an application could also provide valuable feedback data to policymakers and utilities, helping them identify areas where more weatherization work, or more subsidies and other incentives, are needed.

There is already some energy audit software available, like the Department of Energy's Weatherization Assistant.  That is a good start, but the last release of the assistant was in September 2006.  We are long overdue for modernization of weatherization software.

This weekend, the Home Energy Efficiency Team held an energy efficiency "barn-raising" at the Cambridge Community Center.  Dozens of volunteers gathered to take on a variety of energy efficiency tasks, ranging from replacing incandescent light bulbs with CFLs, to installing storm windows and rigid foam insulation.

Over the past month I've attended a series of leadership trainings with HEET (which is part of the reason this blog is so heavily focused on energy efficiency ideas), funded by a generous grant from MassSAVE.  Yesterday was my first crack at leading an efficiency team.  I served as the "right-hand man" on the caulking team, led by award-winning painter Jason Taylor.  Jason is a talented, skilled, and knowledgable (to say nothing of entertaining) contractor, so I confess I didn't do much more than fetch rags and move ladders around.  I got in my fair share of caulking, though, and at one point I found a gaping hole in the wall that was obscured by a big play structure.  Jason showed me and a fellow leader how to seal up the hole with plaster-of-Paris, so we were able to take care of what would otherwise have been a giant leak in the center's energy bills this winter.

Yesterday's barn-raising was a lot of fun, and I think we were able to save a lot of energy.  The Center will be warmer and more cost-effective this winter, meaning that we've put a small dent in global warming while helping a worthwhile community organization.  And to top it all off, I got my photo taken with Cambridge City Councillor, and Lightbulb First client, Henrietta Davis!

With energy efficiency, as with many other problems, it's often helpful to roll up your sleeves and get your hands dirty (very dirty, if you're caulking).  That helps get the creative juices flowing, and helps expose some of the practical, in-the-trenches problems that are often the inspiration for great ideas.  I've got another blog post on the way, for example, that was inspired by an effiency audit training I attended a couple of weeks ago.  So get out there and weatherize some buildings!