Will cyber-sensitives reveal the future of energy efficiency?

Elisa WoodBy Elisa Wood
February 29, 2012

 

The US economy is three times larger than China’s, yet when it comes to developing a clean energy industry, China keeps besting us. The US came in second – again – to China this quarter in Ernst & Young’s much-watched renewable energy ranking released February 28.

 

But there is one clean energy segment where the US leads: demand response.

 

Demand response comes into play when there is high demand for power straining the electric grid, usually hot summer days. Utilities or grid operators give factories and other businesses a payment in return for decreasing their energy use during these peak periods. As a result, demand response not only averts blackouts, but also saves us money, since it is far cheaper to conserve energy when the grid is strained than it is to generate more power.

 

An American-grown industry, demand response is now gaining international attention. EnerNOC, a Boston company that provides demand response services, finds itself increasingly explaining the concept abroad, according to Gregg Dixon, senior vice president of marketing and sales. The company now serves about 12,000 businesses, colleges, hospitals and other large energy users, not only in the US, but also in Canada, the United Kingdom, Australia and New Zealand.

 

Other demand response companies, Comverge, Johnson Controls, Silver Spring Networks, Wipro and Honeywell, also report international expansion, according to Pike Research, which expects the $1.3 billion global market for demand response to see a compound annual growth rate of 37% by 2016.

 

So demand response is clearly a success story, at least when it comes to reducing use of energy by companies and large institutions. The next frontier for demand response is the homeowner. And unfortunately, that might be a tougher market to crack. The average person shows little interest in taking the time to cut back on energy use during peak periods.

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February 29, 2012 | | Tags: , , , , , | 1 Comment »

On-bill financing: Why isn’t everybody doing it?

Elisa WoodBy Elisa Wood
December 15, 2011

If someone told me they could improve the efficiency of my computer so that it operates quicker, at no extra cost to me, I can’t imagine I’d turn them away. Yet, the energy efficiency industry offers a similar option for homes and businesses and at least so far, consumers aren’t flocking to the programs.

On-bill financing gives customers the ability to finance energy efficiency improvements made to their homes and businesses at no upfront cost. Customers pay for the insulation, lighting, new heating system or other efficiency measure over extended terms on their monthly utility bills. Typically, the savings from the efficiency improvement offset the cost, so the customer sees no increase in the monthly utility bill. You get a building that uses less energy and yet experience no financial pain in doing so.

There is no catch here. It sounds like a good deal for the consumer and early reports indicate it is. So why aren’t consumers interested?

A new report by the American Council for an Energy-Efficient Economy takes a close look at 19 on-bill financing programs offered in 15 states.  In many cases, less than 1 percent of eligible customers choose to participate in these programs.

The concept is just beginning to take hold, so the problem may simply be lack of awareness, says Casey Bell, lead author of the report.

“The growth of these programs depends on a number of factors. We are seeing a trend where they are emerging in more states. While I profiled 19 programs, we found 31 in 20 different states. A lot of these programs are still new, and many are still in the pilot phase,” Bell said.

Indeed, when it comes to energy, it’s not easy convincing consumers to accept new ideas, even those that directly benefit them, as behavioral scientists made clear at an ACEEE-sponsored conference on energy use and behavior in Washington, DC earlier this month. Even if they read the brochure from their utility, watch a TV commercial and spot a sign on the bus, they still are slow to respond.  What does convince them? A chat with a neighbor who tried the program, a push by their church, community or social group, a direct knock on the door by a real live person.

So to improve participation levels, it may be matter of more utilities offering more on-bill financing programs and then being patient; it may take some time for participation to snowball.

Will this happen? Can you expect to see your utility offer on-bill financing any time soon? The ACEEE report points out various reasons utilities are hesitating. Not surprisingly, money is a big issue. Utilities see less opportunity to finance an on-bill program, especially now that government funds are dwindling.

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December 15, 2011 | | Tags: , , | 3 Comments »

Know true costs; Save real energy

Cara MialeBy Guest Blogger Kara Saul Rinaldi

November 30, 2011

More than half of the states in the nation have created programs to increase the energy efficiency of homes through a comprehensive approach that looks at all opportunities to save energy, from insulation to upgrading heating and cooling systems. When taxpayer and ratepayer dollars are used, it is essential that these programs are reviewed with a cost-effectiveness test that provides policymakers with adequate knowledge about the programs’ effectiveness. Unfortunately, in many states, the testing system is deeply flawed. The way cost-effectiveness tests are currently applied frequently hinders the design and implementation of residential energy efficiency programs, particularly programs intended to support comprehensive energy efficiency upgrades.

For three decades, the Total Resource Cost (TRC) test has been the principle screening tool that regulators have used to assess the cost-effectiveness of energy efficiency programs and make decisions regarding the use of ratepayer dollars to support the programs. Unfortunately, the way the TRC test is applied often leads to support for single-measure programs rather than whole-house retrofits – despite the fact that the whole-house approach actually delivers deeper and more cost-effective energy savings.  Because of this, the TRC test, when poorly applied, impedes the realization of significant, cost-effective energy savings through state-run energy efficiency programs.

In general, whole-house programs do not tend to score as well in the TRC test as single-measure programs that encourage highly cost-effective measures, such as lighting. This is due in part to the different ways in which the TRC test is implemented, some of which cause particular difficulties for whole-house programs. The TRC test typically includes participant contributions to the cost of an energy efficiency upgrade, resulting in a poor score for a highly leveraged whole-house program – even if leveraging public dollars with private investment is generally seen as desirable in other contexts. On the flip side, the TRC test fails to capture the full benefits of energy efficiency, such as increased comfort, which are frequently significant, although difficult to quantify. To make matters worse, the TRC is sometimes used to screen each individual measure or project, which might sound cost-effective in practice, but creates confusion about what jobs are eligible, decreases customer interest, and adds to a program’s administrative costs.

New York, which for years has been a leader in home performance programs, recently implemented a rule requiring application of the TRC at the measure-level. As a result, the program’s output is declining after years of steady growth. Elsewhere, the application of the TRC has discouraged the creation of strong whole-house energy efficiency programs, or has forced program administrators to develop create programs designed to pass cost-effectiveness tests, rather than to deliver real energy savings to homeowners.

So what should be done to ensure the cost-effectiveness of energy efficiency programs across the country is more accurately evaluated?

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December 1, 2011 | | Tags: , , , | 3 Comments »

New direction for that federal agency whose name I can’t remember

Elisa WoodBy Elisa Wood
November 17, 2011

The US Department of Energy’s reputation is now enshrined as the agency that Republican presidential contender Rick Perry wants to dismantle – if only he could remember its name. But a recent report by the American Academy of Arts and Sciences offers a different direction for the federal agency, one that may not make it more memorable, but a bit more people-centered.

The academy tackles a problem that beguiles the energy industry. Now that we have the technology that lets householders take more control of their energy destiny, how do we inspire them to do so?

The question is central to energy efficiency efforts because smart technologies, such as home energy displays and cell-phone controlled thermostats, offer new ways to save energy. A lot of energy – and therefore money – is at stake. Homes account for about 30–40 percent of US energy consumption. So cutting household energy use by just 20 percent would reduce total national energy use 7.5 percent, according to the report.

We can blame the energy industry for our lack of interest in home energy management, or credit the industry, depending on how you look at it. Utilities have done their job too well. Energy flows invisibly into our homes.  Or as Steven Koonin, DOE undersecretary for science, says in the report: “One of the great triumphs of modern society is that we’ve hidden the infrastructure. Nobody really understands where electricity, gas, or water come from.”

Now that we want people to be aware, how do we make energy infrastructure visible, at least psychologically?

The academy says it’s time for the energy industry to seek answers within the social sciences, a realm it’s rarely delved into. Drawing from a two-day workshop the academy held in May, the report highlights several places were human nature and energy realities collide.

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November 17, 2011 | | Tags: , , , , , | 1 Comment »

Weatherization works: Recent reports are way off base

Steven CowellBy Guest Blogger Stephen L. Cowell
November 10, 2011

A recent article in Newsweek, “Obama’s Big Green Mess,” describes what can happen when contractors are “unfamiliar with the nuances of specialized weatherization work.”  The fact is, installing furnaces that exhaust poisonous fumes, putting in water heaters that can explode and blowing toxic asbestos around a home, which the article points out, happens on a regular basis.  These botched jobs are a result of using contractors who do not understand the complexity of retrofitting older homes. We can attest to that.  My firm, Conservation Services Group, has been in the business for 27 years and we’ve seen our fair share of jobs that aren’t done to the highest standards.

But just because some contractors are doing shoddy work doesn’t mean the industry deserves a black eye.  Adding insult to injury, calling out a few homes and a handful of programs that may be struggling or not meeting expectations is unfair.  It is a disservice to trained, professional contractors and the money saving potential of these valuable and much needed programs.

Since 2009, hundreds of thousands of homes have been effectively weatherized with funds from President Obama’s stimulus program.  Another effect of the program is that the bar has been raised for training and improving industry standards by the Department of Energy.  This represents the first time criteria have upgraded since the federal weatherization program began 30 years ago.  In fact, without the type of public standards, safety and quality assurance that most of the ARRA-funded weatherization programs have enacted, the failure rate would be much higher than Newsweek, Fox, The Daily Show and other media outlets have been reporting recently.

So instead of being critical, we should be applauding the dramatic increase in technical qualifications and education that has been put in place from stimulus funding.  As a result, thousands of contractors and firms are carrying out programs skillfully and professionally from coast-to-coast.

In Maine, CSG has successfully implemented programs for 4,000 homes, saving consumers 400+ gallons of oil per household annually.  We have replaced 500 inefficient oil heating systems in Massachusetts and saved households $1,000 annually in energy costs.  In Oregon, CSG has retrofitted more than 1,000 homes, and we are doing similar work in Kentucky.  In Massachusetts and Tennessee, CSG trained participating contractors to ensure they are educated in the latest industry techniques and meeting the highest standards.  These projects were completed on time and under budget, with quantifiable results.  (Consumers typically see 20-30 percent savings on their energy bills after a retrofit.  In Maine, energy savings from the program reached 40 percent!)  Many more projects like these have been carried out across the country.

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November 10, 2011 | | Tags: , , , | 2 Comments »
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