Making existing buildings more energy efficient is one of the most cost-effective ways to reduce emissions and save building owners money. Fixes like improved lighting through LED fixtures and more efficient heating, ventilation and air conditioning can yield returns relatively quickly, despite higher upfront costs. Yet California's energy efficiency efforts to date have not kept pace with increasing demand, primarily because they rely largely on voluntary, consumer-financed programs. To encourage more energy retrofits from commercial buildings in particular, this paper recommends aggressive utility pilot projects using advanced technologies and methodologies that can measure and therefore meter the energy saved due to specific retrofit measures, as well as state programs that can rely on these methods to offer pay-for-performance efficiency incentives that can encourage large-scale, capital market investment.

Powering the Savings is the seventeenth paper of the Climate Change and Business Research Initiative, a joint project with UC Berkeley School of Law that is sponsored by Bank of America.