After a decade working in the lighting industry in Singapore and
the United States, Govi Rao decided to strike out on his own. His
idea? To turn LEDs, those funny glowing lights in video games and
digital watches, into a mainstream, environmentally friendly
alternative to traditional lighting.
In 2007, he bought four LED (light-emitting diode) manufacturers
in quick succession and set up his new outfit, Lighting Science,
with the help of California investors. But with the economy tumbling
since, his timing looked awful.
So why is Mr. Rao smiling? Because he expects the energy-
efficiency parts of the $819 billion stimulus package the House
passed Wednesday to jump-start sales, which would bring down his
costs and, he hopes, make Lighting Science a world leader in an
emerging, energy-saving technology.
It may be a pipe dream. Of all the long-term, "new economy"
investments envisioned in the House legislation, such as Internet
modernization and renewable energy, the roughly $30 billion set
aside for energy efficiency is the least likely to generate the
kinds of secure high-tech jobs that President Obama has talked
about. Manufacturing of lights and other energy-saving devices is
likely to move offshore, analysts say.
But that's not an argument for excluding energy-efficiency
efforts from the stimulus plan. Efficiency, it turns out, could
boost the American economy in a big way.
"Energy efficiency itself creates jobs, simply because of the
household spending it takes out of the carbon-supply chain and puts
into espresso drinks and haircuts," says David Roland-Holst, a
resource economist at the University of California at Berkeley.
"Service jobs are bedrock jobs."
How many jobs is hard to tell. California's energy-reduction
programs generated 1.5 million jobs, worth $45 billion in payroll,
between 1972 and 2006, according to a study by Mr. Roland-Holst.
That's not a big yearly average, but Roland-Holst says the new
federal investment, if followed through on, would create many more
jobs over time.
Efficiency would also be a boon to taxpayers. The House
legislation aims to retrofit 75 percent of all federal buildings
with better insulation and energy-efficient lighting. It costs about
$6 billion a year to heat, cool, and light federal buildings, says
the US Government Accountability Office. The current plan is to cut
that bill by 30 percent - a savings to taxpayers of almost $1.5
billion a year.
"Retrofitting a government building puts money into domestic
construction," says Ed Young, an associate at Cambridge Energy
Research Associates, a consulting firm in Cambridge, Mass. "It's not
the [jobs] equivalent of building a rocket ship ... but it has lots
of positive effects. The biggest thing to do for energy in the US is
to save energy."
Savings for homeowners could be even bigger. The House plan calls
for subsidized loans or grants to help retrofit2 million American
homes. If those houses were brought in line with the most widely
used efficiency standard in the US - the Leadership in Energy and
Environmental Design (LEED) - they would use 30 percent less energy.
With the average household spending about $3,500 a year on heating
and electricity, the savings would translate into about $2.1 billion
Because 2 million homes represent only about 2 percent of US
households, many activists hope the effort will be expanded, perhaps
as an antipoverty program.
"With all the foreclosure stuff that's going on, anything you can
do to help reduce month-to-month operating costs for homeowners is a
big plus," says Dan Karan, director of construction for Neighborhood
Housing Services, a nonprofit group that builds and finances low-
income housing in New York City. …