Electrifying Ithaca: A Collaborative Public-Private Approach to City-Scale Decarbonization
Constant news detailing the devastating effects of extreme weather events, combined with the inaction and ineffectiveness of political leaders, can leave us feeling helpless and frustrated in the face of climate change. As Director of Sustainability for the City of Ithaca, New York, I am responsible for determining how to adapt and prepare our community, and mitigate the cause of climate change by reducing emissions through technology and financial solutions. creative, timely and cost effective. solutions.
While our more than 6,000 buildings give our city character, they also produce at least 40% of our total emissions, more than transportation or any other industry. Equitable decarbonization of buildings is central to Ithaca’s long-term strategy to reduce carbon emissions and a moral mandate to address historical and economic inequities. To achieve this, we had to think outside the box and come up with a plan to tackle each piece of this giant puzzle.
Change your view of your city
With 30,000 inhabitants, Ithaca can be perceived as small. Our emissions – every 400,000 metric tons – can seem like a drop in the bucket compared to big cities. However, the city is also big in terms of ambition and, counterintuitively, market opportunity. Our real estate portfolio represents a considerable market opportunity, comprising thousands of buildings ready for investment.
To electrify our buildings, Ithaca will have to install thousands of heat pumps, induction hobs and water heaters; it also means more efficient building envelopes, windows and ventilation systems. Tech companies and private equity investors specializing in energy efficiency and electrification see our city’s investment potential.
With this in mind, we set out to develop a cutting-edge program to modernize and electrify every building in the city, relying almost entirely on private capital. We therefore issued a request for proposal soliciting equitable financial and technological solutions from private and not-for-profit 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 aggregate market opportunity, pipeline of customers, and a low-risk chance to create an ongoing source of cash flow.
Ithaca’s mission to decarbonize its building stock has been well received by industry, investors and technology companies. Our call for tenders has encouraged new partnerships between finance companies, contractors, engineering companies, labor unions and non-profit organizations. It has opened the door to an effective model of public-private partnerships capable of providing a cost-shared financial solution for the retrofitting and electrification of commercial and residential buildings. Simply put, the program has enabled a turnkey solution for Ithaca residents and a long-term cash flow opportunity for technology companies backed by financial institutions.
By turning every building in Ithaca into full electricity, we estimate that, on average, energy costs could drop up to 30% each month, compared to current consolidated electric and gas utility costs, estimated at approximately $300 per month per household. In some cases, the savings could be split between the consumer and the investors, reducing utility costs, securing cash flow and enabling a long-term return on investment.
A key element of our plan is scale, without which the city would not be able to develop economies of scale or gain real mass buying power. Scale affects the cost of materials, devices, labor, and even capital. Specifically, by consolidating 6,000 buildings, the city has managed to create a diverse portfolio of what would otherwise have been small-scale, high-risk electrification projects. This way, cost, risk and return on investment could be balanced across the portfolio.
Entrusting your home to a team of electricians and construction workers for major renovations requires trust.
With energy efficiency and electrification partners BlocPower and Alturus, we have raised over $100 million in private equity to fund the first phase of our project. The funds will cover the initial cost of appliances, materials and labor for the renovation and electrification of approximately 1,000 residential buildings and 600 commercial buildings. We plan to raise the necessary capital to continue working on the remaining 4,400 buildings.
Decarbonization takes a village
By reinventing the role of local government to articulate new partnerships, city government has become a convener, able to manage some of the risks associated with markets, the economy and local politics. This has enabled Alturus and BlocPower to bring together a constellation of investors, technology companies, entrepreneurs, community organizations and building owners who can collectively meet this unprecedented challenge.
There was another essential element that we needed in place: the community. Entrusting your home to a team of electricians and construction workers for major renovations 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 have built with their neighbors for this initiative is the basis of its success.
Electrifying all 6,000 buildings is a job the city of Ithaca could never do alone, but aligning the interests of all these groups is certainly something a local government can do.
Participate in 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, freezing winters. A just energy transition can help families save money and improve their quality of life by making their homes safer and more comfortable. That’s why climate justice communities – who have been most affected by pollution and the impacts of climate change – will be the first to participate in the program.
This initiative will promote public health by improving indoor air quality. A growing body of research tells us that gas appliances are dangerous in the home. Gas stoves, for example, 24 hour methane leakand with that methane comes toxic pollutants including benzene, a carcinogen for which there is no safe level of exposure. Children growing 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 plan for decarbonization can be adapted to 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 greater payoffs.
By initiating this change through our buildings, Ithaca breaks our toxic addiction to fossil fuels, saves families money and improves people’s lives. Local government can catalyze meaningful progress. We just need to think outside the box.