Measured Results are Coming to Energy Efficiency Programs. Are You Ready?

energy efficiency programsEnergy efficiency programs are increasingly measured and ranked.  Nate Adams, of Energy Smart Home Performance, explains what this new transparency means to the industry.

“What gets measured, gets managed,” Peter Drucker.

Until now, most energy efficiency programs have been able to live in the dark, or at the very least in rooms lit only with candles. Very few efficiency programs track actual or real-time savings that occur from various programs and upgrades they encourage. It’s been okay to come up with convoluted estimates of mandated energy savings, rubber stamp them, and declare ‘Mission Accomplished.’

That’s about to change. Transparency and measured results are coming. If you manage a program, are you ready to have the lights turned up?

Here are several different factors that all point that direction:

  1. Ranking – The Department of Energy is creating a ranking system for Home Performance programs. Initially this will be voluntary, but ultimately non-participation will likely be a sign of incompetence.
  2. Real-Time Savings – Several companies can do real-time tracking of energy savings – Effortless Energy, Tendril, and Energy Savvy, at a minimum. Technological advances will continue to make previous excuses surrounding data acquisition no longer apply.
  3. Mortgage Changes – Legislation has been proposed to have lenders include energy costs in mortgage decisions, which will create competition and capital value for measured residential efficiency.
  4. Efficiency requirements are getting ‘stepped up’. – Where ½ percent annual demand reductions were okay before, 2 percent annual reductions start to get really dicey because real rubber needs to hit real roads, not simulated ones.
  5. Mandated Energy Use Reporting – Cities are starting to mandate submitting and publishing energy usage for buildings. Gainesville, Florida maps energy use of local homes with Gainesville Green. Portland, Oregon is looking to do it for commercial buildings. Chicago is requiring disclosing total energy use on homes when they are sold and those homes are selling faster.

Technology will bring transparency, and with it accountability for performance. If you work for a public utility commission, utility, or efficiency program, where do you want to fall in the rankings: bottom, middle, or top?

Measured Results Are Key, and Possible, for Energy Efficiency

My company used to be a DOE award-winning insulation contracting company, now we’re Home Performance consultants who design and deliver projects that solve problems at their root. A big part of that change was from failing to deliver results for clients. It wasn’t very satisfying. We set out to actually solve homeowner problems and found that we typically saved a lot of energy in the process, and found that these larger jobs had much more predictable savings than the smaller ones with disappointing results.

For example, two similar jobs, one designed to chase rebates, and one designed to deliver results, delivered 9 percent and 47 percent heating savings, respectively. The $351 annual savings projected from the 47 percent project look likely to occur (gas and electric.)

Essentially, we discovered that predictable and measurable results in residential energy efficiency were possible, and we’re part of a small group that has. But there was a problem. There is no market incentive for accuracy, because no one tracks or reports it.

Another Way to Think About It

As all of these factors converge to force transparency from efficiency programs, one clear and simple goal becomes obvious: incentivize energy savings directly, and track it. The technology is finally here. Now that we can measure it, we can manage it.

All the chaff comes out, and nothing but wheat is left: what works. Cost per project can plummet because administration cost per project drops – did it deliver or not? Few rules are needed (and administrators love rules.) Real costs to utilities for meeting energy saving mandates drop too, once contractors are trained in how to deliver real savings. Otherwise they burn time and effort trying to make a project fit program requirements like my 9 percent project.

The pieces are all in place for a program design like this, and we call it One Knob: only adjust the value of the negawatt. You can read about it on our blog starting here.

In the meantime, get ready for a strong light to shine on the results of utility efficiency programs everywhere, many signs are pointing in this direction.

Nate Adams is the founder of  Energy Smart Home Performance.

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Comments

  1. THANKS, Nate…
    You continue to hammer-home this appalling need to focus on results! ‘Nothing short of heroic, I say.
    But what?… ACTUAL results?.. What chance does the Truth of actual performance-results ever have against the ever-swelling array of inferential algorithmic scoring tools being adopted & incorporated into programs & legislative regulations across the country?? Pardon to all for the sarcasm, but it has been a continuing mystery to me ever since I got into this business that actual energy usage data could honorably remain sequestered behind some cloak of proprietary & privacy invisibility, while we happily push forward with energy modeling and deemed-savings ( so as to assess, rank, score, prescribe solutions and tout the success of our efforts). Correct me if I’m wrong, but all of the validation correlations documents I’ve read (published in pilot studies and comparisons between these scoring instruments) have pretty unimpressive numbers, especially when you look at individual houses (which is what we do). Divorcing the physical building (asset) from the inhabitant-occupants (people) isn’t really how the universe works (its all a system, remember?), so excusing the energy-modeling’s inaccuracy by blaming all those erratic intractable human beings is kind of a ‘cop-out’ (pardon the 60’s terminology) and gets us off the hook for defending actual results. But all I really want to see is that we are saving energy (and related GHG emissions).. and that’s the RESULT that I yearn for. As messy as it is, utilities data is the actual metric of our success and should be the centerpiece of our efforts no matter what computer program we use, no matter what part each of us play, be it auditor, contractor, program administrator, policy-maker, product supplier, etc. And plugging in behavioral FEEDBACK, in as real-time & direct-to-the-operator (homeowner) as possible, lets the homeowner see that what they do matters… that the decision to insulate their attic & walls, to switch to CFLs & LEDs, to air-seal their ducting system, to use cold-water laundry detergents, to getting rid of that extra refrigerator in the garage… to whatever… without a theoretical energy-modeled algorithm to take supremacy over what can be known directly, in actual measured results… is crucial. Q: How could I have ever learned to drive a car if I didn’t get instantaneous feedback about the actual result of putting my hands on the steering wheel?? The sooner we all connect our decisions, our upgrade measures, our utilities conservation policies, our homeowners’ behaviors to actual RESULTS, the sooner we’ll get a real handle on energy efficiency & GHC emissions. Let the chips fall where they may!… If we’re doing things that don’t show substantial results, then lets deal with the actual facts and figure out what to do differently.

  2. Bob Grindrod says:

    Nate: I understand the problem with rebate/incentive programs. Your transition to HP only is remarkable. Your marketing team must be a rare breed. My experience has been that skilled sales people (closers) cannot “get” the technical, diagnostic side of the equation. The obvious disconnect is that incentive programs breed closers that sell the rebates. I see you, and the Tooley’s and the Cox’s of the industry selling HP and making money. No one in NY that I know of is geared that way and again it’s because the incentives make us stupid. I am sure you must have thought about this but the one pitfall of rewarding performance is the possibility that with reduced bills, the homeowner will add load (the outdoor electrically heated hot tub) because they can afford it.

  3. @Bob – Good points.

    First, the problem with selling bigger jobs that are effective and lead to happier clients is that you can’t one call close them. It takes a shift in process. I could sell $2-5K projects all day long with 55-65% closing ratios in one stop, $15K projects require slowing down and being consultative. I didn’t believe it was doable until I did it. These projects are a lot more fun. The current structure in NY sadly precludes this process to some degree, so you do have an uphill battle there.

    The key to solving this is changing the structure of incentives. In tracking a few of my old rebate driven projects, the energy savings for one were disappointing and for another were nonexistent. Both clients got the full rebate and I’m sure large deemed savings were claimed (but didn’t occur). The larger jobs tend to solve actual client problems AND deliver substantial energy savings. The focus has to come off of capital costs, though, and move to monthly costs.

    To your second point, adding load is likely to be much more of an outlier than a rule. The dollar value of energy savings just isn’t that high in a natural gas market. The savings on our projects are typically between $300-800 annually. Not very impressive. The savings are NOT what it’s about though, it’s about comfort. Deliver that and you win. Deliver the energy savings and clients are thrilled because they didn’t expect them to show up. Those numbers aren’t enough to get people to add a hot tub in most cases. If we switch to fuel oil or propane the savings get much bigger, but savings may only be enough to make the payment on the improvements. Just to use some typical numbers, say on a natural gas job you get $30/mo savings on a $100/mo job, net cost is $70/mo. You may see $100/mo savings on a $100/mo fuel oil or propane job, but the client is not ahead cash flow wise. My suspicion is that adding load is not going to be a problem.

    What is likely to happen is a bit of take back effect where clients crank it up to be comfy. I’ve seen this on a few projects, but frankly I’m fine with it. One client saw a 47% drop in weather adjusted usage the first month, 44% the second, and 41.5% the third. I’m good with that, he’s still saving 40% plus AND his family is comfortable. This job was sold without a penny of rebates, by the way. It’s possible. I hope all that helps!

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  1. […] Measured Results are Coming to Energy Efficiency Programs. Are You Ready? It's been okay to come up with convoluted estimates of mandated energy savings, rubber stamp them. Declare 'Mission Accomplished.&#39. &#8230. Technological advances will continue to make previous excuses surrounding data acquisition no longer apply. Read more on Energy Efficiency Markets […]

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