Energy efficiency, the Nerd

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Elisa Wood
By Elisa Wood
April 13, 2011

The renewable energy business has done a remarkable job at positioning itself in the public psyche as the ‘it girl’ of our era.  Just about everyone – politicians, celebrities, major industries – likes to be seen as pro-renewable.

But if renewable energy is the girl that everyone wants to be photographed near, energy efficiency is her nerdy tag-along little brother.  Ever notice how when politicians say they support renewable energy they quickly throw in the words “and energy efficiency” as if it were a babysitting obligation?

Or consider the excitement with which homeowners talk about their recently installed rooftop solar panels. Does anyone wax on like that about new wall insulation? Let’s be honest, renewable energy is colorful, green to be exact. Energy efficiency, well, it’s “smart” energy.

What’s it going to take for energy efficiency to shed its big glasses and pencil pocket protector?

“Let’s face it; we’re selling to the lunatic fringe of green, the lunatic fringe of efficiency. The market is this small strata right now. And of course we want to grow the market outside of the small strata,” said Paul Holland of Foundation Capital, when he spoke recently at the ACI Home Energy Summit in San Francisco, Calif.  “We need less kumbaya in this industry and less expectation. We preach to each other, when we really need to become better marketers.”

Speaking at the same conference, Sheeraz Hiji, CEO of Cleantech Group, pointed out that part of the problem is dollars and cents. The solar industry wisely has figured out how to make it very easy for homeowners to finance solar panels on homes. The energy efficiency industry has not been as successful.

“The key of unlocking the industry is in the financing. Consumers don’t care that much. You have to lower the transaction cost. Some of the companies in the solar side have done this very well. They’ve made it very easy. If anyone is doing that in the home energy retrofit industry, they need to stand up on the table and scream about it,” Hiji said. (Please feel free to do your screaming in the comments section of this blog.)

It’s not that energy efficiency doesn’t have its bragging rights; it’s just not so good – yet – about getting them out. But at the conference, attended by 2,000 people, speakers offered some good makeover material.

For example, Gavin Newsom, California’s Lieutenant Governor, provided the following about investing in various energy resources.

  • $1 billion in coal = 870 jobs.
  • $1 billion in a nuclear plant = 1,500 jobs
  • $1 billion in solar energy= 1,900 jobs
  • $1 billion in wind energy= 3,300 jobs
  • $1 billion in energy efficiency retrofits =7,000 jobs.

“Energy efficiency is a no brainer,” Newsom said. “We need to start talking about it more.”

Steve Cowell, chairman and CEO of Conservation Services Group, noted that in 2003 to 2005, energy costs accounted for 3.5% of US median household income in the United States and by 2007 to 2008 it had risen to 8.5%. What does that mean to the average household? A 12% drop in pre-tax income and 15% post tax. You took a pay cut without knowing it. By using less energy you can get some of your paycheck back.

More details about this and other discussions at the ACI Home Energy Summit are available here.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. I love the nerd analogy! Also, I definitely agree with EE’s lack of marketing skills. I think the finance issue is more an issue with residential EE than it is with commercial and industrial EE, of course. There are a ton of performance contractors out there that specialize in business niches because demand for efficiency financing in C&I settings is high. Marketing to residential consumers is so tough for so many reasons but I think it can be done.

  2. EnergyEric says:

    This is a great story, EE definitely is the pimply faced swotter who sits up front and never gets to answer a teachers question because he’s not cool. When I tell people I work in Energy Efficiency strategies for business, they always ask me how many solar panels or wind farms I’ve constructed. The whole point is missed because we haven’t perfected the EE sell gimmick.Great story Elisa, an accurate portrayal. I think there needs to be a greater push for EE into the business and heavy industry sector, with these corporations feeding the EE good news down to employees.

  3. Good read. The thing Newsom, like other politicians and proponents of renewables, does not mention is that the return on investment decreases as you go down his list, until you get to the EE, which has the highest ROI on the list – actually probably the only one with ROI. Proponents of renewables always talk about the wonderful jobs they create, but they do not talk about the very real and impactful side effects of higher energy costs on the economy. EE produces jobs, and lowers cost on a macro level. Again – a left brain “smart” concept.

    I was going to write a rant about the need to make EE more sexy. http://www.michaelsengineering.wordpress.com I think this will push me over the top!! Thanks! If you don’t mind, I will reference your blog…

  4. Marketing is indeed the key, have a look at the ‘Energy Efficiency and Conservation Authority’ in new Zealand (www.eeca.govt.nz) as an example of marketing energy efficiency.

  5. Too true, overall. What is amazing is that there are $$ billions in Energy Efficiency and Conservation Block Grants (EECBGs) that Dept of Energy has provided to local governments under the ARRA (stimulus act) that are in the process of leveraging even more in private dollars, going into EE. The localities running these programs are investing ways to stimulate demand for the loans — that is, in generating demand for EE. They’ve had some successes, lenders are beginning to understand that EE loans carry lower risk of default than normal home improvement loans (especially when tied to evidence from third parties that the EE work was done to a high standard). One problem is limited communication, except in isolated pockets, between those in the EE rehab business (or those that could get into it) and the public sector program initiators. Another is the whole issue of the rehab work standard itself — the municipal programs are using third parties to do energy audits and recommend particular types of EE work, then returning to make sure that the work is done properly before making payments. The same forms of assurance that the work was done right need to be available for others to make the investment. (You can SEE solar PV or wind turbines; you can’t see insulation, envelope sealing, new HVAC plants, or even windows if the latter don’t change the look of a structure.)

  6. Antonio Gomes Martins says:

    I agree that energy efficiency is systematically overshadowed by renewable production. This is not only because you cannot, eg., see insulation as you can see PV panels, but mainly because it is possible to have a meter telling exactly how many kWh are being generated by a PV panel but there is no meter to measure the kWh saved by the insulation you installed last fall. How can you tell? You can comment with your neighbors that you are spending less dollars in heating this winter but you will never be able to give away a precise value of the energy saved. This sould be tackled with if we want energy efficiency to have its effective economic value publicly recognized.

  7. Excellent piece! … and we are just talking to ourselves. But there is a way around it … building codes and product standards. Over 60% of the savings we need to achieve to become sustainable will be as a results of increased effiency in codes and standards. Yet there continues to be sectors that appose any form of regulation. That’s too bad – as there is so much at stake.
    The Codes & Standards approach eliminates the need for encouraging consumer behaviour change (which as any marketer knows is difficult and expensive) – EE isn’t sexy, it doesn’t offer photo opps for polititians … it’s just as easy as selling the invisable.
    Well … I have to get back to trying to save the world. Glad to know there are others out there trying to do the same.
    Ken Elsey
    Canadian Energy Efficiency Alliance

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  1. […] thing that pushed me over the edge this week was a fine blog  post by Elisa Wood.  My comment was that Gavin Newsom’s list of jobs created by resources including coal, nuclear, […]

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