As the state’s budget battle continues, debate over cutting costs and raising revenue has not focused on a promising strategy – ramping up clean energy efforts to grow our way out of the budget problem. Deploying solar and increasing building energy efficiency cuts air pollution, reduces energy costs, creates jobs, and stimulates the state’s economy – all while putting more tax revenue in state coffers. We can help plug the budget gap by strengthening our clean energy economy. The two work together.
What we absolutely should not do is raid clean energy funds.
An essential part of Connecticut’s clean energy economy transition is the Regional Greenhouse Gas Initiative (RGGI), a multi-state cap-and-invest system to reduce carbon dioxide emissions from the electric power sector. Through RGGI auctions of carbon allowances, Connecticut has raised and reinvested $160 million in programs that help residents and businesses save money on electricity and heating bills—which means more disposable income to spend.
RGGI fund raids would cause consumers to lose out on significant savings on their energy bills, with every raided dollar costing consumers nearly three more. An Abt Associates analysis shows that by reducing air pollution, RGGI has decreased health impacts and saved lives, avoiding up to $300 million in healthcare costs in Connecticut.
Simply put: if RGGI funds are raided, Connecticut loses.
Similarly, Connecticut’s Energy Efficiency Fund (funded in part by RGGI proceeds) helps support nearly 34,000 jobs in technical fields like home performance and HVAC, and saved $3.5 billion for Connecticut households and businesses over the past decade.
Every dollar invested by Connecticut’s energy efficiency programs saves $3.89 on utility bills. Yet this fund – paid for by ratepayers for their benefit – is raided in the Senate Republican budget proposal still on the table. Sweeping money from these programs is shortsighted and would damage Connecticut’s economy, health, and quality of life for years to come.
Beyond protecting critical energy programs from budget raids, our state legislators and governor should be proactive. Here are four clean energy policies lawmakers and the administration can act on now to aid Connecticut’s fiscal health:
- Reduce state agencies’ energy expenditures. Expanding and extending Connecticut’s Lead by Example program, which lets agencies use future energy savings to finance efficient upgrades to aging facilities, could save about $45 to 60 million every year.
- Set up a full-scale shared solar program. According to Vote Solar, this proven approach can deliver more than 2,500 new jobs, $370 million in local economic benefits, and $80 million in property taxes. Similarly, expanding virtual net metering to help speed solar deployment will save municipalities hundreds of thousands of dollars a year in energy costs—badly-needed funds given the anticipated deep cuts to local aid.
- Allow electric vehicle manufacturers like Tesla to sell cars directly to in-state consumers. Tesla estimates it will generate $12 million in sales tax revenue if allowed to open six stores, and it is willing to pay any shortfall to the state after two years. Acadia Center analysis shows that this benefit would come at no cost to existing dealership jobs. Making electric vehicles easier to buy also helps the state tackle a major source of air pollution—cars and trucks—which causes respiratory ailments, imposing huge medical costs.
- Establish a regional policy to reduce transportation climate emissions while generating revenue for reinvestment. Acadia Center analysis shows that pricing CO2 emissions from the transportation sector could generate hundreds of millions of dollars annually. At a time when the state’s transportation funding is in crisis, these funds could put cleaner buses on the road and build a better-running rail system, improving community access to transportation.
The bottom line: a clean energy economy is one that is strong and growing. Both legislators and the governor have important roles to play in ensuring a forward-looking energy agenda, from robust funding for efficiency programs to an ambitious final Comprehensive Energy Strategy. With Connecticut’s frequent failing grades in both air quality and budget health, the state desperately needs to adopt a clean energy budget for the future.