Getting to 21st Century Energy Efficiency

Part I: Why is Energy Efficiency So Hard to Measure and Difficult to Manage?

-by Aaron Goldfeder, CEO of EnergySavvy

 The following article ran in Electric Light & Power as part 1 on a series devoted to achieving 21st century energy efficiency.

There’s been a recent wave of commentary that the utility business model is on a proverbial death row, imprisoned by its 19th-century past and spiraling toward irrelevance, thanks to 21st-century revenue-reducing breakthroughs in distributed generation, customer-owned generation, demand response and energy storage.

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The story becomes even more melodramatic when people liken the utility business to the telecommunications sector, which saw landlines supplanted by mobile technology in a matter of years.

But utilities aren’t going away. They represent the backbone of the nation’s energy services, and they provide the safe, reliable and affordable baseload power that’s required to keep lights on and critical functions running in companies and communities. To play on the metaphor, when your cellphone call drops, you’re frustrated. But when there’s no power, it can mean life or death.

Many of us think the utility industry of the near future must adapt to changes to flourish. One of the biggest changes is an increased and enhanced role for energy efficiency. Granted, utilities generally make more money when they sell more power, but the economic and social promises of doing more with less through energy efficiency are too strong to ignore. Faced with emerging changes on the consumption side of the meter, utilities know they can’t just burn more fuel and hope for the best.

Efficiency First

Energy sector thought leader Daniel Yergin had it right when he called energy efficiency the “first fuel.” On an overall basis, energy efficiency has had the single biggest impact of any source in the energy mix of the 11 IEA countries during the past generation:

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Source: International Energy Agency

Utilities get this. And that’s one of the reasons they will spend $10 billion in the U.S. by 2015 on energy efficiency programs to help customers use less energy.

Utility Spend Chart

 

 

 

 

 

 

 

 

 

Source: Ernest Orlando Lawrence Berkeley National Laboratory

Regulators get it, too, which is why most states have a medley of carrot-and-stick policies to boost energy efficiency.

And finally, consumers get it. They want energy efficiency to succeed, and despite a confusing landscape, energy consumers increasingly understand that energy-efficient homes and businesses run better and are more valuable.

Despite all the support, though, energy efficiency is considerably undervalued in the U.S.

In many ways, this is because it’s complex, hard to measure and difficult to manage. This makes it tough for utilities to improve their energy efficiency portfolio performance to meet changing market needs, achieve mandated energy efficiency savings, deliver on customer satisfaction opportunities, and gain the full trust of investors and regulators.

Big Challenges

There are several key reasons energy efficiency is difficult.

Energy efficiency data is hard to accumulate and analyze to gain transparency and insights. Across the industry, data often is locked up in a hodgepodge of spreadsheets, file cabinets, consultant systems and half-customized legacy information technology systems. On top of that, determining and defining energy efficiency is often counterfactual — how do you measure what you never used? Dealing with certain variables in the measurement process, such as seasonality and free ridership, is also a key challenge.

Latency is another issue when it comes to energy efficiency. Data is collected throughout program implementation but savings aren’t measured and validated until the program has been running for a year or more. When it takes a year or two to figure out costs and benefits within a portfolio, it adds tremendous financial uncertainty for all parties involved and adds friction to industry acceleration. During the past 30 years, we’ve gone from the beginnings of the PC revolution to the iPhone, yet energy efficiency quantification — despite billions spent on smart grid — hasn’t advanced much since the Carter era. There must be a better, faster and cheaper way to durably quantify energy efficiency.

Finally, on the delivery side, energy efficiency still hasn’t reached the kind of modern experience that consumers and businesses expect and deserve. There’s been progress on the behavioral side, but the experience for actual energy upgrades often ranges from barely acceptable to horrendous. It’s still too common that participants and trade allies are buried in paperwork, manual effort, ridiculous forms and half-baked software systems. All of this adds unnecessary cost, risk and waste.

There’s considerable commercial misfortune here. It reminds me of an old saying, “What gets measured gets managed,” and to the extent that we can’t quantify energy efficiency, we stunt the industry. In addition, until we get energy efficiency measurement and management figured out, it cannot compete with power generation as a resource.

Although there’s been a rise in energy efficiency spending and a widespread desire to scale up energy efficiency initiatives in the utility industry, many people say energy efficiency hasn’t lived up to expectations or delivered results.

Great Expectations

To a large degree, these critics are right.

Utilities aren’t always able to optimize energy efficiency and institutionalize its practice as a core business capability. Incentive misalignment and complexity often means they can’t realize it as a profit center or effectively include it as part of long-term resource planning. Regulators sometimes focus more on spending levels and confusing, cost-effectiveness tests over making it easy for customers to participate, driving unnecessary costs out and modernizing quantification of what is being achieved. It’s no wonder that some utilities entirely outsource their energy efficiency efforts to consulting firms. Although this offers some attractive benefits, you don’t have to study things carefully to realize it often means higher costs for ratepayers to pay consultants and an outsourcing of risk management, customer experience, resource planning and overall accountability to those not responsible for the long-term success of those activities.

With ratepayers — everyday people and businesses — footing the whole bill and lots of societal goals’ hanging in balance, it neither has to be this way nor should it be.

Innovation and Ingenuity

As we’ve seen in the travel industry before Expedia, personal finance before E-Trade and real estate before Zillow, modern, cloud-based software approaches can be harnessed to bring businesses into the 21st century. American ingenuity often steps in and modernization eventually comes along. And that will happen with energy efficiency in the utility industry — if we can help consumers and companies save money on their energy bills; if we can help utilities grow and plan more effectively; and if we can provide regulators with data and certainty that show how a dollar spent on efficiency pays for more negawatts than megawatts.

 

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NYSERDA Launches The New York Home Performance Portal, Advances Standards

670px-Albany_PanoramaEnergySavvy and Conservation Services Group Jointly Deliver Project Management Portal for New York State Energy Research and Development Authority

Conservation Services Group (CSG) and EnergySavvy have collaborated on a new program management portal that is designed to enhance communication among homeowners, contractors and the New York State Energy Research and Development Authority’s (NYSERDA’s) Home Performance with ENERGY STAR® program managers.  The New York Home Performance Portal will increase customer satisfaction, improve the contractor experience and accelerate completion of energy efficiency projects.

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The Portal provides access to information that allows homeowners, contractors and NYSERDA to track individual energy efficiency projects and program data through an easy-to-access web interface.

“In the past year, NYSERDA achieved a major milestone for its Home Performance program with the completion of the program’s 50,000th project. CSG has worked with NYSERDA for more than a decade and strives to continually enhance the Home Performance program to make it more cost effective and deliver greater efficiencies,” said Mark Dyen, Executive Vice President of Strategy and Products at CSG. “For NYSERDA’s Home Performance Program, we worked closely with contractors, responding to their calls for easier, faster ways to handle everyday program administrative tasks. The integration of EnergySavvy’s Optix software platform with CSG’s project management database accomplishes this.”

To help NYSERDA grow its Home Performance program and increase energy savings per dollar spent, CSG selected EnergySavvy’s Optix demand-side management software platform for its easy-to-use project tracking and workflow features. With integration between EnergySavvy Optix’s platform and CSG’s EnergyMeasure® HUBProgram Management System, the New York Home Performance Portal provides automated incentive and project eligibility screening, incentive optimization, project details, and homeowner financing status.

The New York Home Performance Portal is capable of seamlessly receiving data from any HPXML-compliant* energy modeling tool approved for use in the Home Performance Program. A pilot program, using Energy Design Systems’ Auditor software, is currently underway, making this one of the first production applications of HPXML data transfer in the country. HPXML provides a national standard to easily communicate building retrofit data between software tools and stakeholders.

“NYSERDA’s Home Performance with ENERGY STAR program provides a model for the industry,” said Aaron Goldfeder, CEO of EnergySavvy. “By focusing on breaking down data silos, leveraging industry standards like HPXML and improving the contractor experience, one of the largest energy efficiency programs in the country will continue to grow to meet the energy efficiency needs of the state. We’re proud to work with CSG and NYSERDA on this important program.”

* HPXML stands for Home Performance XML. Learn more about the industry data standard at http://www.hpxmlonline.com/data_transfer.html.

Photo by UpstateNYer (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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Northwest Meets Midwest in Webinar Hosted by MEEA

Making Good Programs Great: Best Practices in Program Delivery

Date: Thursday, December 12
View the recording

 

Tune in as City of Seattle and Puget Sound Energy take a break from the rain and spread a little sunshine. Hear program best practices from your Northwest peers.

Join the webinar Making Good Programs Great, brought to you by the Midwest Energy Efficiency Alliance & EnergySavvy!

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In Seattle, Community Power Works completes nearly:


Puget Sound Energy‘s recent email outreach resulted in:


The speakers divulge best practices and techniques in 4 key areas based on program data transparency and control:


Expert industry speakers include:

  • Luke Giustra from Puget Sound Energy
  • Ruth Bell from Cascadia Consulting Group
  • Adele Bihn from Data Marketing, Inc.
  • Scott Case from EnergySavvy

Special thanks to the Midwest Energy Efficiency Alliance for hosting the webinar. View the webinar now!

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Industry Embraces Staged Retrofit, Energy Efficiency Pathway to Deeper Savings

EnergySavvy Announces New Capabilities to Support Emerging Best Practice

Utility spending on energy efficiency programs will continue to grow rapidly, up to a projected $10 billion in 2015[1], despite the wind-down in public funding from the American Recovery and Reinvestment Act (ARRA). As the market matures, utility and state programs require new strategies in addition to whole-building upgrades and retrofits. Programs are turning toward incremental approaches to achieving deep energy and cost savings. New technical standards like Home Performance XML (HPXML), are enabling these initiatives to reach scale.

Staged Retrofit Offers an Energy Efficiency Pathway vs. ‘All or Nothing’ Approach

The Local Energy Alliance Program (LEAP), which runs energy efficiency programs in multiple regions of Virginia, and EnergySavvy have announced the deployment of a business and technology strategy to grow energy efficiency savings in a post-ARRA world through the implementation of staged retrofit.

Early adopters of upgrades and retrofits were able to take advantage of generous federal, state, and local incentives and rebates. Often, those incentives drove comprehensive whole-house and whole-building retrofits.

But the low-hanging fruit is increasingly harder to find. To make energy efficiency more attainable for a larger number of customers, programs have figured out that people are more likely to make a to-do list and chip away over time as they have the money.

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Quantifying and Delivering on the Promise of Staged Retrofit

Technical sophistication is required to track, quantify and deliver energy efficiency measures and savings in a staged approach. Energy efficiency programs offered by states and utilities need to generate leads and track progress through multiple projects and potentially multiple programs.

Optix, EnergySavvy’s demand-side management system, has built-in staged retrofit capabilities to:

  • Provide programs with sophisticated customer targeting algorithms
  • Track measures implemented over time through multiple projects and programs
  • Re-market to customers through each stage
  • Maintain a consistent record of each customer across programs

The Optix staged retrofit template is one of many program templates within the SaaS platform alongside single measure, energy audit, home retrofit, commercial assessment, commercial single measure, commercial retrofit, and others.

Industry Support for Staged Retrofit and Software Standards

“Every step of the way LEAP has invested in the tools and processes necessary to achieve greater scale. Staged retrofit will be an important strategy to continue to generate energy savings. And HPXML will allow us to interact more efficiently with our trade ally contractors, increasing participation and satisfaction, by giving them more choice in the tools they use and by reducing data errors and redundancy.”

—Cynthia Adams, Executive Director, LEAP

 

Leading industry organizations, such as National Home Performance Council (NHPC), are advocating for a staged approach to energy efficiency that encourage “homeowners to plan for the long term and implement energy efficiency improvements over time in such a way that they would eventually achieve a certain level of energy savings (i.e. a specified decrease in energy consumption).” (NHPC, 2013)

This staged approach may reduce program costs and minimize the upfront costs to homeowners by allowing them to make improvements over time, or to bundle energy efficient improvements with other, planned improvements. Having the infrastructure in place is crucial for implementing this strategy; programs or participating contractors must be able to track and measure energy savings from improvements over time, as well as predict how different measures, implemented over several years, will add up to a given level of savings.

Larry Zarker, CEO of the Building Performance Institute (BPI), helps develop standards for the industry. “Our goal is to help contractors, utilities and financing entities share information without imposing a burdensome new data collection process on each,” said Zarker. “This allows the industry to cost effectively track the energy savings created by home efficiency improvements, which in turn builds consumer confidence in the home performance industry.”

What are your thoughts about emerging best practices like staged retrofit or the adoption of industry standards like HPXML? Leave a comment below… 


[1] Barbose, Galen L., et al. “The Future of Utility Customer Funded Energy Efficiency Programs in the United States.” Lawrence Berkeley National Laboratory, January 2013. PDF file.

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Five Million Data Points Uncover State-by-State Energy Efficiency Potential

Online Energy Audit Data Now Available for the First Time

Housing attributes and energy habits from more than 120,000 U.S. households illuminates the opportunities for energy efficiency upgrades and potential savings in the country.

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Interactive infographic provides insight on energy efficiency potential by state among consumers actively exploring opportunities to improve their homes.

Generic residential building stock data is widely available. Utilities, city planners, and other professionals rely on this data to understand the profile of homes in a given market. However, representative housing data cannot help determine the triggers or motivations of homeowners; in short, why they would act.

The key piece of missing information is a homeowner’s propensity to seek out energy efficiency information, rebates, incentives, and potential. Access to residential building stock data from homeowners and residents who have expressed an interest in energy efficiency improvements can help utilities and cities design incentives and build programs that will move the needle on energy efficiency and demand-side management programs.

Interactive Infographic Unlocks the Data

EnergySavvy has compiled a Residential Data Assessment, the result of more than 120,000 completed online energy audits with Optix Engage on EnergySavvy.com between 2010 and 2013. The audits were completed by homeowners and residents who visited EnergySavvy.com, primarily as a result of natural search terms indicating an active interest in home energy efficiency upgrades (for example:  ”energy rebates Boston”).

This interactive infographic pinpoints energy efficiency potential by state through analyzed, region-specific data. It uncovers opportunity for savings by aggregating the potential within heating, cooling, wall and attic insulation, appliances, and usage habits, as well as attributes like draftiness, age, and size of home.

For EnergySavvy’s utility customers, the source data is available for custom analysis on a state-level and within specific service territories. Data from a customer implementation of Optix Engage can help utilities design and plan energy efficiency programs that match specific needs in the market, as well as provide the tools to target the appropriate segment of households that are in the market for those programs.

Using this type of data, a utility DSM executive could answer questions like:

  • Which homes are oil-heated and would have the best return on an upgrade to a high efficiency gas furnace or electric heat pump?
  • Which homes reportedly feel drafty and could benefit from low-cost, high impact air sealing?
  • Which homes have thermostats set high in the winter and low in the summer and could benefit from incentives for programmable thermostats or behavioral programs?
  • Which homes have old refrigerators and could take advantage of recycling programs and rebates on a newer, more efficient model?

The EnergySavvy Residential Data Assessment data set contains over five million data points that help uncover untapped energy efficiency potential across the country. For utility marketers, program managers or DSM portfolio executives, this information could be invaluable.

Energy Efficiency Opportunity by State

Here’s a look at some specific insights by state:

Lighting:  North and South Dakotans report using more conventional light bulbs than any other state, at 1.5 times the national average. Vermonters, by contrast, report using efficient bulbs at the highest rate, 1.8 times the national average.

Appliances:  States with the most stand-alone freezers in addition to a primary fridge and freezer? Alaska, Montana, North Dakota, South Dakota, and Wyoming, all in excess of 2x the national average.

Heating Set Point:  West Virginians like it warmer in the winter. They set their thermostats higher than most other states. Rhode Islanders keep their homes the coolest in winter.

Air Conditioning:  Mississippians have the highest percentage of homes with central AC older than 15 years. 28% of homes with central AC could be candidates for upgrades or replacement. 

Cooling Set Point:  Alabamans set their thermostats cooler than any other state in the summer. Others who keep their AC chillier than average include residents of Arkansas, Indiana, Kentucky, Louisiana, Mississippi, New York, Tennessee, and West Virginia.

Need More Data?

For more information on our data or products, please contact the EnergySavvy Team.

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