Energy heads home in 2011

By Elisa Wood

December 15, 2010

I have three predictions for 2011.

1. When it comes to energy policy, austerity will be in.
2. Therefore, energy efficiency will become a favored choice among mayors, governors, state lawmakers and Congress, as government becomes increasingly edgy about the cost of renewable energy.
3. The infamous leaky home will finally get some plugging.

My first two predictions are no-brainers. Governments are broke. They will look askance at anything that costs money, no matter how valuable, meaning that some renewable energy technologies will face tough going. Energy efficiency, on the other hand, offers a way to go green while lowering bills, a very appealing proposition at time of heightened economic and environmental concern.

Maybe not so obvious is why 2011 will be the year of the home. Here is my thinking.

Because of smart grid, the home is the new frontier in an energy revolution that shifts attention from the energy producer to the energy consumer. As Phil Harris, CEO of Tres Amigas, pointed out in a recent presentation, the electric grid is a huge machine, half of it devoted to making power and half to consuming it. While we’ve focused heavily over the years on improving production, we’ve barely considered energy use. http://www.youtube.com/watch?v=vyLuXgo4c74.

“Think about that. It’s a single machine, but for 100 years we’ve devoted all of our attention to generation, production and distribution. And how much science have we produced on the other half of the machine, the things that actually use electricity? That is what we have created on planet Earth. Very large systems with a lot of tension on half of the equation and almost none on the other,’ he said.

Smart grid – the integration of information technology into the grid — will shift the balance, giving consumers greater control over the flow of electrons into their homes much the way the Internet has given them control over information flow. This elevates the household from a passive to an active player on the grid. “I truly believe we are going from a utility-controlled environment to a customer-controlled environment,” Harris said.

Attention to household energy use is big ticket item. For example, retrofitting US homes could cut annual energy bills by $21 billion annually, according to the December 2010 report from the National Home Performance Council, “Residential Energy Efficiency Retrofit Programs in the US.” http://www.nhpci.org/

This isn’t lost on energy policymakers, and they are looking at far more than just caulking windows to achieve these savings. The movement is toward the “whole house retrofit,” which looks at a home as a total system.

“It looks not only at many different elements within the home that result in excessive consumption or waste of energy, but also considers the ways that these elements interact,” the NHPC report said. “Whole home retrofit approaches also review at health and safety issues within a home as a crucial feature of a retrofit job, with a commitment to do no harm.”

The report identifies 126 such programs now underway nationwide, many of which offer rebates to homeowners. The New York State Energy Research & Development Authority, for example, recently announced $5,125 incentives for single family homes and higher amounts for multi-family homes when they add “technologies that lower energy costs, reduce waste and water use, and improve indoor air quality.”

Home builders are paying attention. America’s 10 largest publicly traded homebuilders have started to improve their policies and practices relating to the environment and resources, according to a new study by Calvert Asset Management Company. “Green Recovery for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry,” evaluates how well major builders are doing when it comes to sustainable practices. The green building market, estimated at $36-49 billion, is expected to increase twofold between 2009 and 2013, according the report. Calvert found that among green initiatives, energy efficiency is the first choice among builders.

“Our survey of the 10 largest publicly traded U.S. homebuilders finds an evolving landscape. Whereas two years ago the industry had not yet begun to embrace sustainability as a core part of building design and construction, companies today have taken many meaningful steps toward developing greener and cleaner homes,” said Rebecca Henson, sustainability analyst at Calvert Asset Management Co. and co-author of the report.

Making predictions about energy is tricky. It’s an industry that can shift direction quickly because of unexpected events – hurricanes, wars, gas and oil supply shifts. But right now it looks pretty clear that the direction energy’s heading is home.

Time to export energy efficiency?

By Elisa Wood

December 8, 2010

We keep hearing that China is going to become a really big deal in world energy markets. But it wasn’t until I read this statement by Jane Henley, CEO of the World Green Building Council, that I grasped the scope of its coming influence:

“China is projected to build the equivalent of 10 New York Cities over the next decade.”

For some, such rapid economic expansion by China is cause for fear. Others see opportunity. The US green energy markets were nudged toward the opportunity-seeker category this week with word from the Department of Energy of the nation’s first export strategy for renewable energy and energy efficiency.

It’s a funny place for us to be. We tend to be known on the international stage for our energy consumption. We are the world’s largest oil importer, and its third largest producer. And when it comes to green energy, the last few years have been marked by more imports than exports. A flock of international companies have established themselves in the US to build wind and solar energy, sometimes by buying out US companies.

Many US’ green energy companies simply do not export, according to the report “Renewable Energy & Energy Efficiency Export Initiative,” issued December 7 by the DOE and several other government agencies. The report pegs US export of renewable energy goods at about $2 billion last year. This isn’t a very big number when you consider that worldwide $162 billion in private capital went toward renewables and energy efficiency technologies and $183 billion in government stimulus funds.

While the report quantifies current US renewable energy exports, it has a tougher time defining the energy efficiency market, not an unusual problem for an industry that encompasses everything from home improvements to combined heat and power plants. However, the export market potential for energy efficiency technologies is “likely substantial,” the report said.

So if you want to export energy efficiency, what countries should you look to?

If you manufacture industrial energy efficiency equipment, clearly economically developed countries offer best opportunities Markets also are likely to be ripe for US imports if they consume more energy than they produce (Germany), or if they have high energy prices (Japan), according to the report.

Canada offers the best market for US building materials. Canada already imports more building materials from the United States than the next 20 export markets combined. Other top export markets for building materials include Australia, China, Germany, Japan, Mexico, and the United Kingdom.

If you plan to export electronics, appliances, and information and communication technologies, look to Canada, China, Japan, Mexico, and Singapore, with Canada and Mexico representing the major importers, according to the report.

The full report, which explains specific strategies and supports the US will offer green exporters, can be found at http://export.gov/reee/eg_main_023036.asp.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Smart Grid needs a Facebook

By Elisa Wood
We think we know how smart grid technology will change the utility industry. But do we really?

Take a look at this documentary made in 1969. It’s a view of how the world perceived the coming Internet (It’s also a pretty amusing look at how sexist our society still was at that point.) http://andrewsullivan.theatlantic.com/the_daily_dish/2010/04/before-the-internet.html.

While the film gets some concepts right, like online banking, it misses the Internet’s most world-changing benefit, the democratization of information — the production, distribution and consumption of data by everyday us, free from gatekeepers.

The film also misses the pizzazz and the fun of the coming Internet. There is no You Tube, no Google, no Wikipedia. And look at the kids. They are playing with physical toys. Why isn’t the Mom yelling at them for being on Facebook all day?

The Internet’s emergence – and our misunderstanding of what it would become – may provide hints about the future of smart grid. After all, many parallels exist between the two.
The Internet offered up democratization of information; smart grid promises democratization of electricity, giving consumers the ability to control at their fingertips power production, distribution and consumption. Indeed, if smart grid’s vision plays out to its fullest, you in essence become the power plant. Your in-home generators produce power that is stored by your plug-in electric vehicle, and your home computer controls the electricity distribution. The end game is energy savings and lower costs.

Some argue that the smart grid revolution will have a more profound impact on how we live than did the Internet. The megawatt, after all, is more powerful then the megabyte. Without the megawatt, the megabyte could not be.

Forty- years ago we had a pretty bland vision of the coming Internet. Had we been worried then about getting people to use the Internet – the way we now worry about getting them to use smart grid devices — we probably would have plumbed the depths of behavioral psychology for strategies. We would have asked: Can we get people to use the Internet if we show them that their neighbors do? How about if we demonstrate to them how much money the Internet will save them? Will they shop on the Internet if we explain to them it is better for the environment than driving to the store?

And, of course, all of that hand-wringing would have been a waste of time. What did it take to get people to use the Internet? Some really smart kids in dorm rooms with bright ideas: Bill Gates, Larry Page, Sergey Brin, Mark Zuckerberg and the like.

The electric power industry needs its own crop of dorm room geniuses that will find ways to make the smart grid irresistible to the consumer. If they emerge, maybe the next generation of parents will be lecturing their kids to get off the kilowatt zapper and go outside and play. After all, you can’t spend your whole day eking energy savings from the house.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Time to change habits, as well as light bulbs?

By Elisa Wood

November 16, 2010

We are bombarded daily by advertisements selling us soft drinks, pharmaceuticals, cars, insurance, junk food, teeth whitener, diet programs, and on and on. But when was the last time someone tried to sell you on using more electricity?

I cannot think of a single commercial that encourages us to plug-in, even though electricity is the chief product of 3,000 utilities in the United States.

This speaks to how easy it is to access and use electric energy; its relative cheapness, invisibility, and integral role in daily life. No need exists for utilities to market electricity; we devour electrons blindly.

So how do you convince people to conserve something that they use so much, yet hardly even notice they buy?

Behavioral science may hold the answers, as pointed out in a new report by the American Council for an Energy-Efficient Economy, “Visible and Concrete Savings: Case Studies of Effective Behavioral Approaches to Improving Customer Energy Efficiency.”

Getting consumers to save energy is as much a people problem as a technology problem. Or as the report puts it: “To achieve greater energy savings through energy efficiency, we need to design and build programs that change habits as well as light bulbs.”

The report highlights 10 energy efficiency programs that have done so. The programs include: building operator certification, in-home energy monitoring, media messaging, keeping up with the Jones emotional pressure, ATM-like energy purchasing, in-home energy displays, employer cheerleading, corporate energy management, green recognition, and feebates – fees or rebates for cars based on their energy efficiency.

What do these programs tell us about human behavior when it comes to energy efficiency? For one thing, we need to see how much energy we use, clearly displayed in our homes as we use it. And we need proof – true measurement and verification – that our efforts to conserve pay off. Such data also encourages political support for efficiency programs.

The report finds we worry about social norms – if we learn our neighbors save more energy than we do, we try harder. And believe it or not, money doesn’t really motivate us very much. Or at least we do not always make rational economic decisions. We are more apt to act based on values, curiosity, self-esteem, and other non-economic motivators. When money is used as an incentive, bonuses need to be large and immediate, not spread out over time.

The report is available here. http://www.aceee.org/research-report/e108

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Every company needs a corporate energy manager

Guest blog

By Paul Baier

Vice President of Sustainability Consulting, Groom Energy

www.groomenergy.com

Why do so many companies fail to capitalize on the abundant opportunities to save money through improved energy purchasing and efficiency?

One reason may be the lack of high-level positions for energy management at many companies. This is a practically a “no brainer” because the position can often pay for itself in four to five months. Sustainability leaders should advocate for this role either within their own group or at the corporate level.

Opportunities to save money are everywhere. In our consulting work we consistently see opportunities to reduce overall energy spend by 5 percent to 15 percent through projects with a two to three year payback period. This is serious money for companies with energy budgets approaching $50 million, and starts to really add up for firms in the $500 million range.

A typical project may improve energy purchasing practices or increase energy efficiency. For example, one organization realized $4 million in savings with renegotiated contracts for electricity. Another saved $200,000 per year through implementation of a demand response program. Yet another found $350,000 through lighting upgrades and incentives. Finally, a wholesaler reduced its electricity use in its frozen warehouses by 80 percent after converting to LED lighting.

Generating savings need not require a capital investment. Zero capital projects exist as well. One retailer, for example, saves $60,000 per year at each of its distribution warehouses by adjusting the temperature set points for its frozen and refrigerated warehouse to be cooler at night and warmer during the day when electricity rates were 50 percent higher. This same retailer saves $15,000 annually by recharging its electrical forklifts at 6 p.m. instead of 3 p.m., as was previously the custom, in order to take advantage of reduced electricity rates.

Why aren’t other companies exploiting these kinds of opportunities? There are many reasons, such as:

1. There is often a prevailing attitude that “savings” projects are “deferred maintenance” with dubious returns and should only be done when absolutely necessary.
2. Incentives at the corporate and local levels are often misaligned (e.g. production targets vs. overall energy spend).
3. Getting capital requests “through the system” often requires strong internal selling skills and determination to get things done, which may be lacking for some energy project requests.
4. Operations engineers are often overwhelmed with keeping operations (production lines, warehouses, offices) running and do not have the time, inclination, expertise or the proper incentives to look for and implement energy savings initiatives.
5. Lack of knowledge in the CFO’s office about the opportunity

A lack of energy accountability, another contributing factor, is very common. Who owns the company’s energy budget? It’s surprising how often this question results in a “blank stare” when posed to companies we consult. They often have executives responsible for revenue, overall budgets and managing health care costs, for example, but not for corporate energy expenditures.

This lack of energy ownership can cost companies millions. In many cases, senior management does not realize how much they’re spending on energy across all sites, or that energy is often second only to health care in terms of overall cost growth.

At the local level, a lack of ownership leads to huge waste. For example, at one very large manufacturing facility, certain machines and operations were needlessly left running during the third shift, yet no one “owned” the responsibility for determining when the machines could be shut off, costing the company $40,000 in energy in one month.

Energy accountability, visibility, and corporate management are the first steps to pursuing these changes and realizing the potential savings. A corporate-level energy manager — typically a director-level, but can be vice president-level if energy spend is large enough — who works with senior management and a cross-functional corporate energy management team is essential. Corporations, especially outside of energy intensive industries, such as steel, are increasingly starting to establish these positions.

We recommend:

• Establish a corporate-level director of energy management with responsibilities for driving improved energy purchasing and consumption practices. For highly decentralized organizations, this role will be a corporate services function for the line.
• Increase CEO and CFO education about the total dollar amount of corporate-wide energy spend. The CFO should especially be pushing their organizations hard for projects that increase energy efficiency.
• Drive energy spend visibility by calculating energy spend for the overall corporation, its lines of business, and individual facilities and plants.
• Include energy spend in quarterly operations reviews
• Establish an energy management cross-functional team that meets at least quarterly.

Revenue growth for many companies in this current economic environment is very difficult. Enhanced margins can be achieved through energy reduction, which begins with corporate visibility and an empowered, corporate energy manager

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Energy efficiency: Real estate’s next granite counter top?

By Elisa Wood

November 3, 2010

A lot of good economic reasons exist to pursue energy efficiency. Still the average person tends not to. This is no surprise. If I cannot see, touch, buy, sell, trade or save efficiency, if it’s invisible, how can I pay it any real attention?

Often on the vanguard, Boston-based Conservation Services Group is working on an idea to make home efficiency more tangible. It is a surprisingly simple idea. One that is likely to leave a lot of people saying, ‘Of course. Why didn’t I think of that?’

You might say CSG is making energy efficiency the next granite kitchen counter top of the real estate business.

Through a $348,000 grant from the Doris Duke Charitable Foundation, CSG is working on a metric to describe a home’s energy efficiency value. When a homeowner lists a house for sale, the metric would be included in the multiple listing service (MLS), right along with the home’s price, number of bedrooms, square-footage and location.

Suddenly, efficiency is tangible, something that can be quantified and can add or detract to home value.

It’s not yet clear what that metric will look like. It might be a numerical score or a certification like the Energy Star label. Figuring that out is part of CSG’s task, as it puts in place a program for New York over the next two years.

“You can imagine the pitfalls in establishing what this score would be,” said David Weitz, director of CSG’s Applied Building Science Division. “How do you present it in a way that is accessible to the greatest number of people. Unfortunately, there is no right answer.”

CSG plans to hold focus groups with homeowners to get a sense of what might work. The idea is to come up with a measurement that translates into a selling point, much like the granite counter top or hard wood floors. The hope is that sellers will install efficiency to increase their grade. Presumably, the higher grade will make the home more marketable.

Weitz also must convince MLS administrators to accept the metric and include it in the listings. Fortunately, CSG is not alone in this pursuit. Similar programs are in the works in other parts of the country. In addition, the US Department of Energy is working on creating a national an ‘e-scale’ label for homes. Weitz hopes the DOE effort and various local labeling initiatives will come together to create consistency in labeling nationwide.

In winning the award, the 26-year-old CSG edged out more than 350 proposals, submitted last April, from organizations in 44 states that offered scalable approaches for spurring energy efficiency retrofits in existing buildings. Grants totaling $2.7 million went to nine winners, which were evaluated by a panel of experts in real estate, finance, construction, government policy and energy efficiency technologies.

“In the past, people would buy a house without any real understanding of its ongoing energy costs. Establishing an energy efficiency category, within MLS listings, will help during the selection process by providing homebuyers with another essential piece of information,” Weitz said.

If it’s successful, who knows, maybe someday the real estate mantra will no longer be ‘location, location, location,’ but instead, ‘efficiency, efficiency, efficiency.’

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

How efficiency makes solar affordable

By Reid Smith

October 27, 2010

When solar energy companies think about how to reduce the cost of their product, typically a lot of time and money goes toward increasing the efficiency of solar panels and their manufacturing process. Reducing the production cost decreases the final cost the consumer will have to pay.

However, few solar companies start by making the building more energy-efficient, even though this effort can significantly drop consumer costs. Energy efficiency lowers the demand for energy in a building. If a building needs less energy, it requires fewer solar panels, which drives down the cost of the installation for the building owner.

But you may be wondering, how significant are the energy savings in a building after energy efficiency upgrades?

Buildings are large energy consumers, accounting for 40 percent of US energy consumption, according to the US Department of Energy. Homes make up 22 percent.

Not only are buildings big energy users, but they are also big energy wasters. In fact, 40% of the energy we use in buildings is wasted due to poor insulation and air leaks.

So the first thing to do is improve the building envelope. After that, it’s important to consider how solar energy will be used in the building and what kind of installation is most efficient. People tend toward solar photovoltaic panels because PV has become the image of solar energy, said Rick Reed, president of Solaray Corporation, at the Solar Power International conference in Los Angeles earlier this month.

But solar PV is typically only about 20 percent efficient, whereas solar thermal is about 90 percent efficient. “Many people are heating their water from solar PV instead of using solar hot water systems,” he said. “This doesn’t make any sense.”

Solar thermal systems use much simpler, reliable technology and are much cheaper to install than PV systems. Still, they are largely an after-thought in the US.

For consumers, the cost of solar thermal and energy efficiency upgrades are typically much less than solar PV installations. However, most consumers interested in upgrading their homes to solar do not realize how much energy their houses could save before installing solar PV. And historically their solar installers have not told them either. Why would a solar PV installer want to promote energy efficiency if it would translate to selling fewer panels?

Thankfully, that’s changing, partly because new financing options focus on reducing the overall cost of solar for the consumer, rather than on simply selling them solar panels. As a result, more solar companies are beginning to move into the energy efficiency business. SolarCity is one example of a company that now combines energy efficiency services with solar installation.

This has huge implications. Retrofitting 40 percent of the residential and commercial building stock in the US would create over 625,000 full-time jobs over a decade, spark $500 billion in new investments, and generate as much as $64 billion a year in cost savings for ratepayers, according to a September report by The Center for American Progress.

So if you have been scared away by daunting up-front costs of solar, now may be the perfect time to get a home energy audit and begin discussing solar financing options available in your area. You may be surprised what you find.

To read the full report by The Center for American Progress, Efficiency Works:Creating Good Jobs and New Markets Through Energy Efficiency, go to http://www.americanprogress.org/issues/2010/08/pdf/good_jobs_new_markets.pdf

Reid Smith is the editor of Energy Efficiency Markets.

What political party do your electrons support?

By Elisa Wood

October 20, 2010

Lucky for Americans, information technology doesn’t appear to be owned by any one political party. If it were, Congress would still be squabbling over whether or not to support the Internet and you’d be reading this on paper rather than online.

Not so for energy. Generally speaking, Republicans tend to be pro-fossil fuel, while Democrats typically come down on the side of green energy. This feud – which is a key reason Congress cannot pass an energy bill — confuses me. Does a coal-fired plant represent some conservative ideal not found in wind power? What’s liberal about the squiggly light bulb illuminating my desk?

How can electrons be partisan?

Okay, I know I’m over-generalizing and bound to attract admonishments from readers who will point out where liberals are sometimes pro-brown and conservatives pro-green. But I think we’ve seen the debate come down along party lines enough in the United States that my assumption is fair.

That’s why it was intriguing to see the recent report “Pro-Partisan Power,” a combined effort of think tanks on both sides of the political spectrum: the Brookings Institution, Breakthrough Institute and the American Enterprise Institute.

In the words of the report authors:

Today, few issues in American political life are as polarized as energy policy, with both left and right entrenched in old worldviews that no longer make sense. For the better part of two decades, much of the right has speculated darkly about global warming as a United Nations-inspired conspiracy to destroy American sovereignty, all while passing off chants of “drill, baby, drill” as real energy policy. During the same period much of the left has oscillated incoherently between exhortations that avoiding the end of the world demands shared sacrifice, and contradictory assertions that today’s renewable energy and efficiency technologies can eliminate fossil fuels at no significant cost. All the while, America’s dependence on fossil fuels continues unabated and political gridlock deepens, preventing real progress towards a safer, cleaner, more secure energy system. The extremes have so dominated mainstream thinking on energy that it is easy to forget how much reasonable liberals and conservatives can actually agree on…”

The report goes on two make four key recommendations: 1) Invest in energy science and education; 2) Overhaul the energy innovation system; 3) Reform energy subsidies and use military procurement and competitive deployment incentives to drive price declines; 4) Internalize the cost of energy modernization and ensure investments do not add to the [federal] deficit.

The authors say this can be done at a cost of $25 billion, which can be recovered through small fees on imported oil, electric utility surcharges, a very low price on carbon or other means that will not cause great pain to any one group.

You may or may not agree with the recommendations. But it is hard not to be impressed with how the authors suggest we portray energy – not as a battle between left or right, but as a technology play, as innovation. I suspect this is what Rhone Resch, president and CEO of the Solar Energy Industries Association, meant when he said that solar energy is an industry, not an issue, as reported recently inRenewable Energy World North America Magazine.

Americans left or right can’t argue with innovation. It has brought us things we all like, our cell phones, our downloadable music, air conditioning, meals we can heat in minutes, and voices that tell us which way to drive our cars so that we don’t get lost — which all somehow have managed to remain free of any partisan taint.

The full report is available here:http://thebreakthrough.org/blog/2010/10/postpartisan_power.shtml

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Are your electric rates high? Here’s the good news

By Elisa Wood

October 13, 2010

If your electric rates are high, there is a silver lining. Chances are you live in a state that offers some of the greatest innovations and incentives for energy efficiency – or soon will. By taking advantage of these programs, you can reduce your bill.

Take a look at the chart below that I put together after reading the American Council for an Energy-Efficient Economy’s “2010 State Energy Efficiency Scorecard.” I list the ten most expensive states for household electricity and note where each stands in ACEEE’s scorecard, a report that ranks states from best to worst for their energy efficiency efforts.

Not surprising, seven of the most expensive states also are launching the most ambitious energy efficiency efforts. Several of these states are in the pricey Northeast, now one of the best markets for the energy efficiency industry.

It would be nice if these states would just reduce their electric rates, but for a variety of reasons that is unlikely to occur, at least in any dramatic way. The pricey states are often plagued by old energy infrastructure, transmission line congestion, and lack of indigenous fossil fuels, all factors that drive up energy costs.

As a result, policymakers in these states now talk not so much about reducing electric rates, but about reducing electric bills. If you’re a New Yorker, your electric rate may stay at 19 cents/kWh, but your monthly bill will drop if your home is better insulated or your refrigerator new and efficient. This is why the pricey states are so motivated to achieve energy savings.

The high-cost energy states may be among the most aggressive when it comes to energy efficiency, but they are not alone in their pursuit. The latest ACEEE scorecard comes at a time when states in general – not the federal government – are leading the way in bringing unprecedented energy efficiency incentives to consumers. Congress has contemplated some policy innovations over the last two years to spur energy savings, but has been unable to pass an energy bill. Steven Nadel, ACEEE executive director, says that “the overall story here is one of states getting done what Congress has so far failed to do.”

ACEEE points out that the US – thanks to the states – has never experienced an energy efficiency boom as large as this one. During the last efficiency boom (a boomlet really) in 1993, ratepayer-funded efficiency programs amounted to $1.8 billion, before slacking off to about $900 million in 1998. By 2009, the number was $4.3 billion. ACEEE expects the state programs to keep growing, possibly reaching $12.4 billion by 2020. And this does not include the one-time injection of $30 billion in federal stimulus money, the largest single investment in energy efficiency in US history.

ACEEE’s full report is available for free download here:http://www.aceee.org/research-report/e107

Comparison of electric rates and ACEEE state ranking

	Ten states with the highest residential electric rates *	ACEEE ranking for energy efficiency
	Connecticut	8
	New York	4
	New Jersey	12
	Rhode Island	7
	New Hampshire	22
	Vermont	5
	California	1
	Maine	10
	Maryland	16
10.	Massachusetts	2

*Source: Energy Information Administration, June 2010

Note: The chart above ranks only the lower 48 states. Because of their remote locations, Hawaii and Alaska face unusual energy challenges.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” available at www.realenergywriters.com.

Energy efficiency: Cure for mortgage meltdown?

By Elisa Wood

October 7, 2010

My first reaction was that the Alliance to Save Energy was stretching a bit by titling its October 6 talk: “Is energy efficiency the key to recovery from the recession?”

But after hearing David Goldstein’s presentation, I must admit I’m thinking about energy efficiency in a whole different way. Goldstein, author of the book, “Invisible Energy: Strategies to Rescue the Economy and Save the Planet” crunched the numbers to show the enormous economic relief efficiency could bring to both the average homeowner and the US government.

He went as far as to suggest we may have averted the mortgage meltdown had we instituted more efficiency over the last few decades. Sound extreme? Consider this.

The average suburban home now costs $175,000. When banks evaluate a homeowner’s ability to pay a mortgage, they look only at that figure. They do not consider the cost to pay utilities, which adds another $75,000 over the life of the mortgage. Nor do they consider the cost to drive back and forth from work to the house, another $300,000.

These energy costs have gone up over the years, while worker income has stagnated since 1973. When energy costs are added to mortgage costs, suddenly homeowners are paying as much as 62% of their gross income to live in their homes. It is not surprising that the lending system went wrong, he said, given that banks looked only at the $175,000 commitment and not the accompanying $375,000.

“Would you invest in a mortgage like that? That is what we are doing every day,” Goldstein added.

How much of a difference can energy efficiency make? Goldstein calculated that green building and transportation costs could chop that $375,000 by half.

Because efficiency reduces utility and transportation costs, it frees up consumer spending power. As a result it could ease several of the nation’s other financial woes, among them our low savings rate, weak consumer spending, trade deficit, inflation risk and joblessness. Efficiency also could take a big chunk out of the federal deficit, given that government is the largest energy user in the nation, he said.

“This recession did not just occur randomly. It is largely a predicted result of fundamental problems,” he said. “Weak energy efficiency policy is at the heart of many of them and is related to all of them.”

How much energy can we save through efficiency measures? More than we think, Goldstein said. Conventional studies indicate the US economy can wring out about 30% savings, but these are cautious estimates, biased toward the low end since no one ever loses their job for underestimating energy efficiency potential. But they might if they over-estimate and as a result the lights go out somewhere because we built too few power plants, he said.

Goldstein suggested that instead of relying on forecasts of energy efficiency potential, we set goals: “We best discover the size of the resource by going out and acquiring it.”

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” www.realenergywriters.com

Using car talk to sell home energy upgrades

By Elisa Wood

September 29, 2010

Does the word ‘audit’ give you a warm and fuzzy feeling? Not likely. Yet it’s typically the first service an energy efficiency contractor offers to a prospect. Sometimes the audit is even free, much like the unwelcome kind we receive from the IRS.

Use of words like ‘audit’ ‘retrofit’ and ‘weatherize’ turn off customers. Unless the industry rethinks its jargon, it is unlikely to win the hearts, minds and wallets of the typical American consumer.

These are some of the findings from the Lawrence Berkeley National Laboratory, which on September 29 launched a new effort: “Driving Demand for Home Energy Improvement.”

With a lot of federal money flowing into the industry, it is more important than ever to figure out why homeowners resist energy upgrades. To that end, LBNL published a 132-page report that examines human behavior when it comes to energy choices. The report includes case studies of successful programs.

Contrary to conventional wisdom, information and education will not inspire the typical homeowner to insulate and replace a boiler, according to the report. In fact, people who support the idea of conservation conserve no more than those who do not.

Even the promise of saving money doesn’t always work. Consumers feel overwhelmed by too many choices, so are likely to just opt for the status quo and leave their home as it is, says the report.

But homeowners will take action if others in their community do so, and if they are gradually eased into the idea of making energy efficiency improvements, starting with what is easy and working up to bigger projects, said Merrian Fuller, LBNL research associate, in a web presentation.

Carl Nelson, program and policy manager for the Minneapolis-based Center for Energy and Environment, found that people respond favorably to energy efficiency when they are gathered together with neighbors for community meetings. Ninety-five percent of the 2,400 people who attended the meetings signed up for audits, or rather ‘home visits,’ before leaving. They even made the required $30 co-payment.

When neighbors are all gathered together in a room to discuss energy efficiency, they begin to view home upgrades as a “public commitment,” as well as “a social norm,” like cleaning out leaves from gutters, he said. “It is something normal people do.”

As for language, it is not enough just to replace the word ‘audit’ with ‘home visit,’ or retrofit with ‘home energy upgrade.’ Language must be vivid and fit with the consumer’s existing mental frame. Don’t just say a house is leaky, said Fuller. Tell the homeowner that all of the leaks combined are the size of a basketball. One contractor found success by using car talk. He sold efficiency in terms of miles per gallon for the home.

Finally, make ‘em laugh. Humor is such a good sales tool that the Minneapolis program hired a comedian to train its workshop presenters. The presenters won laughs and action when they told homeowners: “When your refrigerator is old enough to vote, let it go.”

The report, “Driving Demand for Home Energy Improvements,” is available athttp://drivingdemand.lbl.gov/.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” http://www.realwriters.net/rew/rtlnkpr.htm

Move over Star Trek: Here comes Energy

By Elisa Wood

September 22, 2010

Remember when the idea of generating electricity from wind turbines and solar panels seemed really cool? No denying their benefits, but they are sooo last year.

Energy folks have gazed with envy at those who work in telecommunications for a long time. They invented the cell phone. Energy wanted its own thingamabob that would completely revolutionize its market. Now, with all of the thought, money and politics backing energy tinkerers, forget the cell phone. I suspect Energy is approaching a “Beam me up, Scottie” breakthrough.

Here are a few of my favorite new contraptions and concepts.

• My dog, the power plant: After scooping up after your dog, you throw the poop into what is called a ‘Park Spark,’ a device with gas tanks attached to a streetlamp. You turn a wheel to generate methane from the dog poop and the light comes on. This is not a hypothetical. A Park Spark is operating at a park in Cambridge, Massachusetts. http://newsfeed.time.com/2010/09/22/dont-toss-that-dog-poop-mass-artist-uses-waste-to-power-park-lamp/?iid=moreonnf

• My commute, the power plant: The public relations person who emailed me this information wrote in the subject line, ‘Very Cool Smart Grid/Transportation Announcement.’ I thought, ‘Oh sure, how many times have I heard that from a PR person?’ But yeah, it is.

Viridity Energy and Southeastern Pennsylvania Transportation Authority are tapping into the growing use of waste energy. (We in the US apparently waste about as much energy as the Japanese use in total.) In this case, Viridity software works to capture the energy created when a train brakes. The excess power is stored in a battery and then sold to the power grid. The first test will occur at Philadelphia’s busiest subway line. If it works, it may spread to public transportation systems across the country.

“The project will pair the latest 21st century technologies and energy optimization practices with one of the country’s oldest transportation systems, dating back to the deployment of electric trolleys in 1892,” says Viridity’s news release. “Mass transit systems across the country are striving to maintain high quality service while facing growing fiscal challenges which are further compounded by rising energy costs. The pilot represents a large and untapped potential for transit systems to help meet these challenges and at the same time improve grid reliability in highly populated urban neighborhoods.” http://viridityenergy.com/news/press/

• My knee, the power plant: I heard about this prototype a couple of years ago. As far as I know it’s not commercially available yet. But when it is, I want one. This gadget uses “biomechanical energy harvesting.” You wear it on your knee and it captures energy wasted from knee movement as you walk. “We believe that when you’re slowing down the knee at the end of swinging the leg, most of that energy normally is just wasted,” said its creator, Arthur Kuo, an associate professor of mechanical engineering at the University of Michigan, in aRenewable Energy World article. Your knee won’t light up cities, but it might charge your Ipod. At the time the article was published in 2008, Kuo thought the knee brace was still too bulky and he was working on streamlining it.http://www.renewableenergyworld.com/rea/news/article/2008/02/knee-brace-generates-electricity-from-walking-51434

• Wireless electricity: To think, we were all so impressed with cordless phones. Now a team at the Massachusetts Institute of Technology says we may soon be able to toss out our electric wires as well. No more looking for where to plug in the televisions, stereos, lamps and computers. As Paul Hochman put it in hisFast Company article, it is “a breakthrough that portends the literal and figurative untethering of our electronic age.” Several companies are working on commercial applications.http://www.fastcompany.com/magazine/132/brilliant.html

• Wired cows: Cows seem to hold some special place in the heart of green energy fans. It’s not unusual to see promotional photos from wind power companies with cows grazing by wind turbines. Now some Hewlett-Packard researchers are proposing that dairy farms power our energy hungry data centers. It involves cow manure, waste heat from the data center and a combined heat and power system. I’ll say no more because further details are in an article I have written on hybrid power systems for the September/October 2010 issue of Renewable Energy World International magazine. Watch for it here. http://www.renewableenergyworld.com/rea/magazine/renewable-energy-world

Those are just a few of the cool energy concepts that I’ve seen. Please let us know what you’ve come across.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” www.realenergywriters.com

East coast states again dominate awards for efficiency

By Elisa Wood

September 15, 2010

Again East Coast states have won disproportionate recognition in a national analysis of energy efficiency programs, this time from the well-respected American Council for an Energy-Efficient Economy.

ACEEE named five of the best state-led efficiency programs in a report issued Wednesday. Three of the five awards went to Northeast and Mid-Atlantic programs: Two in New York and one in Maryland.

This comes on the heels of a report by the Center for American Progress and Energy Resource Management Corp. that identified the ten best states for energy efficiency. Seven of the ten were East Coast states.

What’s the secret ingredient that brings so much success to the eastern states when it comes to efficiency? ACEEE gives credit to the region’s historic pursuit of energy efficiency and effective alliances between utilities and state governments.

ACEEE also points out that several new sources of funding are now available for efficiency endeavors. (Also see Energy Efficiency Incentives for Business 2010:Eastern States at www.realenergywriters.com, which details incentives totaling $8.6 billion for efficiency along the East Coast.)

The federal government has dramatically increased efficiency spending in recent years, as have several states throughout the nation. For the Northeast and Mid-Atlantic states, there is the added advantage of some specialty programs that contribute funds, such as the Regional Greenhouse Gas Initiative. RGGI, the nation’s only mandatory carbon dioxide cap and trade program, has generated $650 million in auction allowance sales since September 2008.

“The funding streams for individual states coming from RGGI proceeds have been large enough to launch new and innovative energy efficiency programs, such as the Green Homes/Green Jobs Program in New York,” the ACEEE report said.

In addition, Maine is using all of its RGGI proceeds for electric and fuel efficiency, and New Hampshire is using 90 percent of its RGGI share for energy efficiency. Other Northeast and Mid-Atlantic states have channeled millions from RGGI into efficiency programs, operating under the premise that efficiency offers the cheapest and cleanest way to meet new energy demand.

While the Northeast and Mid-Atlantic appear to head the pack when it comes to efficiency, programs in the report, other states also received kudos from ACEEE. Hawaii and Colorado were among those receiving top honors. Honorable mention went to programs in Alaska, Connecticut, Louisiana, Massachusetts, Minnesota, New York, South Carolina, Texas and Washington. Emerging programs were noted in California, Massachusetts and New Jersey.

“These state programs benefit customers in numerous ways, generating significant energy savings, training thousands of professionals, lowering energy costs, and reducing the negative environmental impacts of energy use. Many featured programs demonstrate collaboration between public and private stakeholders, serving as models for effectively coordinated and highly-leveraged programs that can last for years to come,” said Steve Nadel, ACEEE executive director.

ACEEE’s top five included efficiency programs that focus on new homes, combined heat and power, wastewater efficiency, economic development and agriculture. Full details are available at ACEEE’s website. http://www.aceee.org/research-report/e106.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” www.realenergywriters.com

Energy Efficiency and PV: Together Forever

By Elisa Wood

We have seen a marriage of the energy efficiency and solar energy industries as the US has worked to green its buildings. In fact, some financing programs require that all cost-effective efficiency be pursued before solar panels are installed.

Here Elisa Wood interviews Liz Merry, owner of Verve Solar Consulting, about how the solar industry views energy efficiency and the outlook for companies that tackle both EE and PV.

What do solar installers think of the idea that a building should be made energy efficient before solar equipment is installed?

I’ve heard some solar leaders say “Energy efficiency eventually, sales first.” That makes complete sense in some cases, where the solar installer has recruited the customer and the customer already has an energy efficient home. If the customer has to call another contractor to come in and get the building 5 percent more efficient at a high cost before the solar project can go forward it is going to kill the solar project.

But, in the cases where the home is older and simply leaking energy out of its thin windows and walls, the solar company that recruits this customer has an opportunity to sell a bigger job by doing the energy retrofit project, or partnering with a building performance contractor. I picture the energy efficiency first requirements as a mandate for smart contractors to become energy service companies, not just solar, not just efficiency.

Energy retrofit work isn’t always easy, and sometimes it is hard to find energy contractors. Can solar installers always find contractors to the work if a home must be made efficient before solar is added?

It’s not easy, but it’s possible. And where there is challenge there is opportunity. The building performance contractor business is about to get very busy, and the entire trade will become more efficient and standardized with experience, just has it has developed in the PV and thermal businesses over time. We’re just in that rough spot between initial demand creation and plenty of supply available.

The EE industry seems more mature than solar in the United States. Will it create as many new job opportunities as solar?

You’re right about the energy efficiency industry being more mature than the solar PV industry. Efficiency technology and energy management controls has been a big business since the early 1990s, and in my state of California we’ve had ratepayer energy efficiency programs since the early 1980s.

But growth is continuing in EE. As utilities begin meeting mandates to change their energy mix the need to reduce and then control energy demand becomes highly profitable.

The new job opportunities are for engineers of every type as more engineering and construction firms begin to tackle retrofit services and energy management. But not just engineers. There are thousands of program managers, analysts, customer service representatives, and marketing-related positions behind the effort to get billions of dollars of energy efficiency rebates out the door. These jobs are usually with consulting and contracting firms that actually implement the efficiency programs on behalf of the utility.

We see a lot of discussion about smart grid and home energy use. But shouldn’t policy focus on the big energy users, commercial and industrial buildings?

You said the magic term: smart grid — the elusive king of all change agents in terms of merging megabytes (of data) and megawatts (of energy demand.) People focus on what they know best, and as we all live in homes, the residential market will get the most buzz on and off line. When smart energy management technology infiltrates our homes, it will be accelerated in our businesses and institutions.

The vision for a smart grid is to provide users the information they need to really manage their energy use, and enable grid operators to balance the grid when there are millions of energy producers, not just a hundred thousand. So, no, I don’t think it helps to focus on just the largest energy users. The energy grid will be the basis of a sustainable economy when both the largest users and the majority of users can intelligently manage their own usage.

Liz Merry will lead a half-day workshop, “Solar Industry Primer,” October 11, 2010 at Solar Power International in Anaheim, Calif., http://bit.ly/cKb60F.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” http://www.realwriters.net/rew/rtlnkpr.htm

Best states for energy efficiency

By Elisa Wood

September 2, 2010

If you live in Connecticut, California, Maryland, Massachusetts, Pennsylvania, New York, Texas, North Carolina, New Jersey or Ohio your state is doing something right – a lot right – when it comes to energy efficiency.

The ten states deserve kudos, in that order, for policies that encourage energy efficiency, according to a report issued this week by the Center for American Progress and Energy Resource Management Corp.

If other states achieve similar market dynamics, the US construction industry may pull out of its current slump, says the report, “Efficiency Works: Creating Good Jobs and New Markets through Energy Efficiency.”

The US could add 625,000 full-time sustained jobs over the next decade if it retrofits 40 percent of the nation’s homes and commercial buildings, according to the report. Such an effort would bring $500 billion in new investments to upgrade 50 million homes and office buildings and generate as much as $64 billion a year in cost savings for U.S. electric ratepayers.

Why is this especially important now? Because the economic downturn cost more than one in three construction workers their jobs, leaving unemployment in the industry “at Depression-era levels,” the report said.

“To confront this crisis, the U.S. jobs market needs sustained new demand for the skills of construction workers that is grounded in providing real value to the economy through enhanced productivity, greater efficiency, and improved asset value for real estate,” said the report. “Such a solution is readily available. Our country needs a national program to retrofit America’s homes, offices, and factories for energy efficiency—a program that can provide an important answer to the jobs crisis facing our country.”

As is often the case with US energy policy, it is states, not the federal government, leading the way in fostering energy efficiency markets. The report identifies ten strategies employed by top states. They are:

• Energy efficiency measures in Renewable Portfolio Standards—policies that not only require utility companies to meet a set portion of demand from renewable energy but also include energy efficiency as a qualifying form of clean energy.
• Energy efficiency measures in Renewable Energy Credits—policies that establish markets for tradable clean energy credits and include energy efficiency as a qualifying clean energy resource.
• Energy efficiency specific standards that require utilities to plan for meeting a percentage of future growth in demand through energy efficiency instead of increasing supply. These policy tools include Energy Efficiency Resource Standards and Energy Efficiency Portfolio Standards.
• Unbundled utility structures in which energy transmission and distribution utilities are separate from power generation companies that own power plants, encouraging least costs strategies for meeting energy demand through conservation.
• Decoupled utility rate structures, where utilities’ rates are adjusted to compensate for changes in the volume of energy sold, removing the structural disincentive to conserve energy.
• Aligning efficiency with utility companies’ shareholder benefits, such as bonus rates of return, reimbursing program costs, or other incentives that help transform efficiency from a special program into a core business practice.
• Penalties for noncompliance with energy efficiency standards, to ensure that well-intentioned programs are effectively implemented, monitored, and improved upon over time. Effective policies must have real consequences.
• Regulatory cost-benefit tests that focus on utilities’ real costs, in order to isolate the specific value offered by energy efficiency investments.
• Property-assessed financing structures that link the benefits of installed efficiency to a building, rather than the owner of the building, allowing repayment of financed investments to transfer automatically to new owners.
• Service assessment delivery structures, which allow government jurisdictions to directly facilitate financing of upfront capital costs, assuring repayment through municipal or other service assessment mechanisms.

The top states do not use all of these measures, but they have “developed important pieces of the puzzle,” the report said. Still others are moving in the right direction, among them Virginia, Hawaii, Michigan, Maine, Nevada, Delaware, New Mexico, Florida, Illinois and Utah.

For more details see the full report athttp://www.americanprogress.org/issues/2010/08/good_jobs_new_markets.html.

Elisa Wood is co-author of “Energy Efficiency Incentives for Businesses 2010: Eastern States,” http://www.realwriters.net/rew/rtlnkpr.htm