States Urged to “Race to the Top” on Energy Efficiency


President Obama’s State of the Union speech on Tuesday signaled the biggest commitment to advanced energy since President Bush coined the term in his 2006 State of the Union. But unlike in 2006, Obama proposed a suite of proposals to achieve a variety of specific energy goals. And one of those proposals was directly targeted toward states.

“I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next 20 years,” said Obama. “We’ll work with the states to do it. Those states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make that happen.”

Modeled after the Race to the Top program in education launched in the Administration’s first term, the efficiency Race to the Top is summarized in this White House fact sheet. As part of an overall goal of “doubling American energy productivity by 2030,” this program will “support state governments that implement effective policies that increase energy efficiency and help decrease waste.” That support will take the form of “awards,” with the President including these awards in his proposed budget for next year.

In order to become eligible to compete for the federal funds, Race to the Top states typically must take legislative or policy action, drive innovation, and institute systemic changes that are replicable in other states. In energy, as in education, state action is key because states play such a big role in overseeing energy production, delivery, and use. Utility regulation, building codes, and other key levers for reducing energy waste are firmly in the hands of state, and sometimes local, governments.

In putting together the efficiency Race to the Top, Administration officials tell us they want to see utilities, local governments, financing entities and industry develop systemic approaches to advancing energy efficiency, changing the energy landscape in a cost-effective and market-driven way. They want to see the emergency of a “utility of the future,” using the best technology available, employing innovative business models, and governed by a regulatory construct that maximizes energy productivity in residential and commercial buildings.

This Race to the Top should be a launching pad for advanced energy innovation – and an opportunity for advanced energy companies to step forward with technologies, services, and business models that drive greater energy productivity.

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