Will Obama's Ambitious Energy Efficiency Plan Really Save Businesses $40 Billion a Year?

The Better Buildings Initiative, announced today, aims to improve efficiency by 20% in under 10 years.

President Obama

Just as he promised in his State of the Union address, President Obama is getting serious about energy efficiency. Specifically, he is pushing his Better Buildings Initiative, which developed out of his "Better Buildings" program within the Department of Energy, by rolling out three new targets today: improve energy efficiency by 20% by 2020, save businesses $40 billion per year on energy bills, and reform outdated policies and call the private sector to greater involvement in energy saving practices.

Obama is making the announcement at the Energy Innovation Hub of State College, Pennsylvania, a fitting location given his rather intense focus on innovation and American competitiveness lately. The plan specifically involves tax incentives, commercial retrofitting financing opportunities, competitive grants for green practices, and increased training on energy auditing and building operations.

"This initiative has the potential to really unlock a large amount of investment, some of which is sitting on the sidelines right now ... and create jobs at a time when that has to be our central focus," said a senior administration official, according to Reuters.

Critics must be pleased to see Obama acting so quickly after his January address. On Monday, he also announced the Startup America Partnership in collaboration with Facebook, IBM, Intel, and others—an initiative to galvanize investors to increase startup investments in an effort to increase jobs and American innovation.

In terms of specifics so far, there aren't many. "Cost-effective upgrades" is the term used by the White House to describe how the Better Buildings Initiative will help companies save billions of dollars on energy bills—the official White House statement also mentions "retrofitting" extensively, so it seems that the billions saved, if they are in fact to be saved, will come down the road, as opposed to how most businesses would prefer them: immediately.

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