Author

Elisa Wood

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

Energy Efficiency

ACEEE State Scorecard: Why Carrots Are Good

written by Elisa Wood

We do not live in a simple world. The US economy, especially, often gets to where it wants to go only by way of rules of the road so complicated that few businesses can operate without attorneys as chauffeurs.

So it’s refreshing when a common sense idea, one that requires no new laws, regulations or codes, appears to have huge influence. Such is the case with the annual state energy efficiency scorecard, created by the Washington, D.C.-based research organization, the American Council for an Energy-Efficient Economy (ACEEE).

Now in its eighth year, the ACEEE state scorecard ranks states based on their energy efficiency policies, best to worst, and then publicizes the results. The organization released the most recent scorecard last week.

The ACEEE state scorecard plays to the idea that all of us want to be recognized, especially if our jobs come by way of a popular vote. Not surprisingly, elected officials embrace the competition with growing intent.

“More and more governors and state lawmakers understand that they have a choice: Do nothing as costly energy is wasted or take action by creating incentives to waste less energy,” said Maggie Molina, director of ACEEE’s Utilities, State, and Local Policy program.

Massachusetts makes no secret of the fact that it keeps coming out on top. For the last four years Massachusetts has been number one. The state unabashedly weaves this success into energy news releases, speeches and interviews. And you can argue that it deserves to trumpet its success – it doesn’t come easily with California just behind, threatening any year to steal the crown.

Massachusetts again ranks as the top state of energy efficiency with California second.

The ACEEE state scorecard also provides a clear look at the laggard states and exposes those that are slipping. Indiana slid down 13 spots in the ranking this year, partly because lawmakers eliminated long-term energy savings goals. Ohio dropped seven spots after freezing and weakening its energy efficiency resource standard.

Overall, though, this year’s scorecard portrays good news for energy efficiency. States saved 24.4 million MWh last year, up 7 percent from 2011. Natural gas savings reached 276 million therms, a 19 percent increase over the 2011 savings reported in the previous ACEEE state scorecard.

Annie Gilleo, ACEEE State Policy Research Analyst, describes the scorecard as “a toolkit that policymakers can use to increase energy savings in their state.” True, and more, it’s a motivator, one that’s all carrot, not stick. Line us up, point to a finish line, blow the whistle and we follow our natural inclination, we run.

The behavioral premise may be simple, but ACEEE’s scoring is not. The organization undertakes an extensive review of publicly available data and then verifies it with state energy offices and public utility commissions. States are scored based on 30 metrics in six policy areas – utility policies and programs, transportation initiatives, building energy codes, combined heat and power development, state government-led initiatives, and state-level appliance standards.

Here are some of highlights from this year’s ACEEE state scorecard.

Massachusetts ranked number one for the 4^th year with 42 points out of 50. California was second with 40.5 points. Although Massachusetts won overall, California did better in certain categories, specifically transportation, building energy codes, state government initiatives, and appliance efficiency standards. Massachusetts, however, did far better in the heavily weighted utility programs category, and also bested California when it comes to combined heat and power.
The Northeast dominated the top slots with Massachusetts, Rhode Island, Vermont, Connecticut and New York in the top five
There was a three-way split for the number 3 slot between Oregon, Rhode Island and Vermont
Arkansas, the District of Columbia, Kentucky, and Wisconsin won most improved states
The bottom states from last and up were North Dakota, Wyoming, South Dakota, Mississippi, and Alaska.

The full ACEEE state scorecard is available for free download. ACEEE also issues scorecards for cities and countries every other year.

10/29/2014 0 comment

Energy Efficiency

Energy Efficiency Factoids that Will Win Friends and Influence People (Especially Investors)

written by Elisa Wood

Riddle: What’s as big as the amount of energy used by the European Union…and getting even bigger?

The answer is the amount of energy we’re not using. Or more specifically, it is the energy saved in 2011 by the US and 10 other countries – Australia, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Sweden, and the United Kingdom, all member nations of the International Energy Agency (IEA).

That’s according to the IEA’s new “The Energy Efficiency Market Report 2014,” which puts in perspective just how important energy efficiency has become.

Together, the 11 countries reduced their energy use by 1, 337 million tons of oil-equivalent (Mtoe) in 2011 — more than all of the fuel consumed by the European Union from all energy sources combined.

Or another way to look at it — these countries effectively displaced an entire continent’s energy demand, says IEA.

Here are a few other energy efficiency factoids from the report that offer market insight.

The world avoided using more energy than the supply of oil (1 202 Mtoe), electricity (552 Mtoe) or natural gas (509 Mtoe) in 2011
Houses got bigger and population grew, but these factors did not influence energy use because of more efficient appliances, light bulbs and heating. In fact, residential energy use has dropped five percent since 2001.
Energy efficiency investments now represent a $310 to $360 billion investment, and growing.

From this report and others, it is now clear that economic decline, alone, did not cause the energy dive following the 2008 financial meltdown. True, energy use did take a decided dip in 2009 and then start to rise again, but not nearly as much as it would have without the world’s big push to become more energy efficient, according to the report. Without the energy efficiency efforts begun in 2011, the world’s energy use would have been 218 Mtoe higher in 2011. Moreover, had we not made our appliances, cars, buildings and industry more efficienct in the 1970s, we would be consuming 60 percent more energy today.

Perhaps most interesting is how financial markets are reacting to energy efficiency. Financial products are growing in breadth and sophistication. The energy performance service contract — which pays for efficiency improvements through energy savings achieved — is expanding beyond its origins in the US. While the US market for the contracts is about $5 billion, China’s market for the contracts has reached $12 billion, IEA said.

Meanwhile, use is growing of clean energy bonds, green bonds and climate bonds from fixed income markets. Until late 2013, the green bond market relied heavily on development banks (like World Bank). But corporate green bond issues are now growing very rapidly, the report says. IEA also noted an uptick in on-bill financing programs, such as Property Assessed Clean Energy (PACE) in the US, Mexico and Europe

Public finance also continues to be signficant, the report says, with commitments of EUR 16 billion from German public investment bank KfW; EUR 2.1 billion from the European Investment Bank; EUR 453 million from France’s Caisse des Dépôts; and EUR 181 million from the United Kingdom Green Investment Bank.

The report is availabe for a fee here. A free executive summary is here.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

10/15/2014 0 comment

Energy Efficiency

Three Tricks to Inspire Southern Energy Efficiency

written by Elisa Wood

Let’s face it. When it comes to energy efficiency, the South seems stuck in its rocking chair on the front porch watching the Northeast and West walk by with all the savings. Time and again, southern states rank among the lowest on national energy efficiency scorecards.

But that’s starting to change. And it has a lot to do with understanding what inspires action on energy in the South, according to Tammy Fulop, Schneider Electric’s vice president of energy and sustainability services.

Fulop reports an uptick in interest among southern schools and municipalities in energy performance contracting. What are the motivators?

Talk about the Neighbors

Government leaders and school officials are keenly interested in energy efficiency projects undertaken by others locally. If it worked for the neighboring school or city, it’s apt to work for them. It’s not exactly following the Joneses; more like find out what the Joneses are doing and do it even better. So sharing ‘neighbor-to-neighbor’ stories works.

As Fulop puts it, “Once a mayor or superintendent hears what their next door neighbor – or sister city that they have always been in competition with – has been able to achieve with the partnership, they want to learn more.”

This can provide a kind of second-starter advantage. They study the neighbor’s project and then add to it. For example, a city might include the same lighting and HVAC upgrades to buildings, but enhance them with information technology, security or telecommunications systems that they pay for out of their energy savings.

Emphasize Economics

Many southern communities are still recovering from the economic downturn. Schools and other public facilities lack the tax revenue to pursue big capital projects. However, boilers, air conditioners and other equipment breaks and must be replaced. Energy performance service contracts (EPSC) allow public facilities to replace equipment with higher efficiency models and pay for them long-term out of the savings.

“It helps them leverage guaranteed future energy savings that can work for them today,” she says

Improve those Grades

Government rules increasingly demand better energy performance from public buildings. Municipal and school leaders see energy efficiency as a path to compliance. They also want their cities and states to improve their rankings in highly publicized competitions like the American Council for an Energy-Efficient Economy scorecards.

“I’ve seen mayors take greater interest in how the city is perceived on energy and sustainability,” Fulop says. “For them, it’s all about economic development and attracting new business to the city – and providing a nice, livable city for the residents.”

The infographic below offers a by-the-numbers look at some of the energy savings Schneider Electric says it was able to achieve through recent community projects in southern states. Some of the projects, detailed in Schneider Electric case studies, were undertaken in Houston and Denison, Texas; Foley, Alabama; and Madison County Schools, Alabama.

10/08/2014 1 comment

Energy Efficiency Renewable Energy

How to Get Solar and Energy Efficiency to Play Nice

written by Elisa Wood

The solar and energy efficiency industries often are seen as brethren in the clean energy cause. But in truth, they are competitors. Energy efficiency undercuts solar profits. The more efficient a home or building, the fewer solar panels it needs.

As a result, it’s difficult to get solar installers to abide by the oft-stated recommendation that they make sure the home is as energy efficient as possible before they size the solar energy system.

I recently wrote an article about a solution proposed in California, which was to make solar a subset of state energy efficiency programs. (See Would Homeowners Say “Yes” to Energy Efficiency if it Came with Solar?) The model would capitalize on solar’s popularity to help spur more energy efficiency. I didn’t realize at the time that my home town of Charlottesville, Virginia, already was doing just that.

How Solarize Works

Solarize Charlottesville is one of the many solarize programs springing up nationally that reduce solar costs for local homes and businesses through economies of scale. Begun in Portland, Oregon, solarize programs engage in collective negotiations with select installers who are willing to offer a group discount for a limited time within a community.

Like microgrids and solar gardens, solarize programs dovetail with the growing local energy movement. Cities, states, neighborhood groups and non-profit organizations are among those that launch solarize programs. (See this partial list of solarize programs. )

What makes Solarize Charlottesville particularly interesting? The program was begun by a non-profit organization that has spent years making local homes and businesses more efficient in central and northern Virginia. The Local Energy Alliance Program (LEAP) has walked the talk by promoting rather unsexy energy efficiency measures, like insulation and lighting, before moving into the popular solar energy arena. The group waited until solar pricing looked right.

Since the second quarter of 2010, solar prices have dropped 61 percent, according to a report published by the Solar Energy Industries Association/GTM Research. The low prices are spurring a tremendous level of solar adoption. Installations are expected to grow by 36 percent this year. Through the first half of the year, 53 percent of all new electric capacity installed in the US came from solar.

“LEAP has been doing energy efficiency in this community for a little over four years now. We have been following the renewable markets pretty closely. It wasn’t until this year that we looked at the prices of PV dropping and said, ‘Man it is time to do something,’” said Jon Proffitt, LEAP’s solar program manager.

Tremendous Response from Community

Solarize Charlottesville proved popular beyond LEAP’s imagining. In the three-month application period (July 1-Sept. 30), it received more than three times the applications expected. The two solar installers that LEAP selected for the program found themselves a bit “inundated” with more than 1,000 homeowners and businesses signing up, Proffitt said.

“During our launch event, I announced to everybody that we were hoping to get 300 homeowners signed up. I think two weeks later we had already reached that number. They just kept coming,” he said. “It wasn’t long before we were over 500 and were sending messages out to everybody letting them know we were going to be a bit slower than we originally thought, but we’d make sure we got to everyone and provided quality service.”

The good news is that LEAP was able to use the extra time to educate the applicants and begin energy savings improvements at several homes. As a value add, any solarize homeowner served by Dominion (the largest utility in the area) also could sign up for free home energy efficiency evaluation. More than half of the solarize applicants either had already undergone the LEAP evaluation or signed up to do so as part of the solar program. So for them energy efficiency came first, as it should given that it’s the cheapest, cleanest ‘fuel.’

“It’s really boosted our energy efficiency work. Several of the homeowners who have gone through our solarize program are working directly with LEAP to both reduce and produce, meaning they are doing a kind of whole house energy retrofit,” Proffitt said.

The solarize program is contributing to a larger goal LEAP has been pursuing; the nonprofit hopes to ‘build’ a virtual power plant for the area – create enough energy savings or distributed energy to avert the construction of a central power plant.

As Proffitt explains it, virtual power “is offsetting energy that would come from a potential future power plant, either by saving or by producing distributed clean energy. Either way still accomplishes pretty much the same goal. It all plays into the same idea of instead of having a central power plant – natural gas, nuclear, coal-fired plant somewhere – we have our own clean energy here in this community,” he said.

LEAP is offering Solarize Charlottesville in partnership with the City of Charlottesville, Albemarle County, and the UVA Community Credit Union. In early October, it also will launch a solarize program in Northern Virginia, beginning in Leesburg. In addition, the organization is in talks with other groups throughout the state about forming a Virginia-wide solarize program.

More information about Solarize Charlottesville, including pricing and financing details, can be found here. Separately, the Clean Energy States Alliance has published a guide on how to get a Solarize campaign started, which is available here.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

10/01/2014 1 comment

Energy Efficiency

Do We Think about Energy Efficiency the Wrong Way?

written by Elisa Wood

Energy efficiency is a good thing because it cuts back on energy use and reduces our utility bills, right? True, but we limit its possibilities when we think about energy efficiency only that way.

That’s the over-riding message from “Capturing the Multiple Benefits of Energy Efficiency,” a recent report by the International Energy Agency (IEA).

The report points out several energy efficiency benefits that governments habitually fail to fully quantify.

For example, energy efficiency has macro-economic advantages – it boosts tax revenue and creates jobs. And on the micro-level businesses can become more competitive by wringing as much value as possible from their energy dollars.

Energy efficiency has health benefits – it reduces air pollution and therefore lowers instances of respiratory disease. It may even reduce anxiety and depression where fuel poverty exists, the report says.

And energy efficiency helps make our overall energy delivery system more cost-effective. Utilities can avoid building power plants and transmission lines by using existing infrastructure to greater advantage.

Most of these ideas are already raised frequently to warrant use of public or utility funds on energy efficiency. But often governments present them purely as descriptors without statistical backing

However, IEA says that if governments start to recognize – and quantify these benefits – we may more quickly develop the vast amounts of still untapped energy efficiency in world economies.

World investment in energy efficiency reached $300 billion in 2012 – equal to investments in coal, oil and gas generation. This investment produced savings larger than the energy provided from any other fuel. This means that energy efficiency, the negawatt, has become the primary fuel used in the world, the report says. That’s why it’s often termed the ‘first fuel.’

If the world pursues all economically viable energy efficiency, the resource could boost economic output through 2035 by $18 trillion – larger than the current size of the economies of the US, Canada and Mexico combined, according to the IEA.

But the world will fail to tap as much as two-thirds of its energy efficiency potential unless policies change.

So what must government do? The IEA report offers several models they can use to quantify benefits. It also shows some of the results of using a statistical approach.

Manufacturers found that the payback period for energy efficiency fell from 4.2 to 1.9 years when they monetized the productivity and operational gains brought to internal rate of return by energy efficiency.
Energy efficiency technologies can make homes warmer and drier, which makes for healthier conditions. For every $1 invested, energy efficiency can provide up to $4 in benefits when the cost of medical care, lost work time or child care costs are considered.
On a more macro scale, changes from energy efficiency can induce GDP growth rates of 0.25 percent to 1.1 percent

Quantifying the benefits will lead to more energy efficiency because it will draw investment dollars to the resource. Right now, energy efficiency has a lot of trouble competing against supply side resources, especially shale gas and oil, for public and private funds, according to the report.

With more data on hand, governments and utilities might stop thinking about energy efficiency as an expense to be born and instead as an investment to be pursued.

The IEA report is available here for a fee. A free executive summary is available here.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

09/17/2014 2 comments

Energy Efficiency

Energy Efficiency as an Act of Protest

written by Elisa Wood

A friend recently asked me how she can stop doing business with her electric utility as an act of protest. The utility is building a major gas transmission line that will run through pristine land. She wanted to make a statement by leaving the utility for a competitive electric supplier.

It turned out that’s not an option for her – her state has not deregulated, so consumers have no choice but to buy power from their local utility. (And in any case, the competitive supplier likely would secure energy from the same source as her utility.)

So instead my friend wisely started exploring other means of protest: Not sit-ins, signs and blockades, but energy efficiency and rooftop solar.

We are deep in an era of energy dissent. Whether the concern is environmental, economic or political, consumers clearly want to have more say in shaping where their energy comes from. Witness the massive response to 350.org’s campaign against the Keystone Pipeline. Or take a look at the charged trailer for this new climate change film, “Disruption,” which heralds the idea of getting people to the streets to demonstrate against carbon-intensive energy sources.

There is no doubt that mass rallying can reshape history. But when it comes to energy, I suspect it is not the most effective way to accomplish the reshaping. Protesting against energy supply does little good if the demand for the energy remains.

Hence, promoting energy efficiency and distributed generation, to me, represents the most effective approach to moving us away from centralized power plants and big transmission lines and toward more local energy. Reducing energy demand is not just a way to call for change; it’s a way to make change. If you don’t buy it, they can’t sell it. If they can’t sell it, they won’t build it.

If you don’t buy it, they can’t sell it. If they can’t sell it, they won’t build it.

Bainbridge Island, off the coast of Seattle, represents one of my favorite energy industry stories. When the island began putting excessive strain on its power supply, the local utility proposed building a new substation. The islanders balked. But rather than telling the utility to figure out another way, they found a solution themselves. Meeting week after week in a local church, a community group, energy consultants and the utility worked together to create an energy efficiency plan that allowed them to defer construction of the substation. The islanders became early users of digital energy displays and other signals to get the citizenry to reduce their electricity use during periods of peak demand.

Some in the utility and regulatory community are getting this message, and are seeking out ways to avert construction of infrastructure with smart energy technology. Take a look at the Industry Perspectives article we posted today by Bill Radvak about what Consolidated Edison is doing in New York.

This may be the next, key selling point for energy efficiency, microgrids and other forms of distributed generation – that these forms of energy may be able to keep new, big power plants and transmission lines out of your backyard. There is a buzz, an emotional current afoot to make energy more local. Energy efficiency can become a big part of the movement if it tells its story right; indeed it may at times be the happy ending.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

09/10/2014 1 comment

Renewable Energy

NRG & GMP Strike Deal to Remake the Vermont Grid

written by Elisa Wood

NRG Energy and Green Mountain Power have teamed up to remake the Vermont grid with microgrids, distributed energy, and products to help consumers manage energy.

The companies intend to replace a “creaky old grid infrastructure from the 20th century” with a “21st century energy eco-system,” according to David Crane, president and CEO of energy giant NRG.

Early next year, the companies plan to begin rolling out new electric products and services for consumers and businesses. They will offer community solar, energy management systems, micropower, personal power, electric vehicle charging and similar distributed energy offerings.

The pair also intend to leverage NRG’s microgrid capabilities to transform the distribution grid “to a market-based platform designed to create efficiencies and distributed energy solutions,” according to a September 2 news release issued by the companies.

Green Mountain Power already is constructing a 7,700 solar panel microgrid to generate 2 MW in the city of Rutland.

The utility’s latest effort adds to a growing movement in the Northeast and Mid-Atlantic to develop a less centralized, more distributed and greener grid. Connecticut, Maryland, Massachusetts, New Jersey and New York have high profile regulatory efforts and pilot projects underway to foster distributed energy and microgrids.

Outages caused by Superstorm Sandy and other severe storms served as the initial impetus for the region to remake its electric grids. But increasingly states cite other benefits, such as reduced emissions and economic development.

Owned by Quebec-based Gaz Metro, Green Mountain Power is well situated for the statewide effort – the utility controls most of Vermont’s electric distribution system.

New Jersey-based NRG brings to the deal a growing portfolio of smart grid, distributed energy and retail energy products. The independent power producer’s backbone, however, remains a large fleet of wholesale generating assets that total about 53 GW.

In an earnings call last month, Crane said he sees industry value swinging from the wholesale to the retail energy markets. To that end, the company has restructured to capture more retail business. NRG also recently announced plans to acquire Goal Zero, which offers personal solar products.

Demonstrates utility microgrid play

Mary Powell, GMP president and CEO, described the utility’s partnership with NRG as “a really big deal for our customers and for Vermont.”

”Our customers consistently tell us they want tools to save money and move to renewable energy sources, and we can show the rest of the country how to get there. This is what our energy future looks like,” she said.

The deal also demonstrates how a utility might take ownership of the microgrid play, rather than fear it. Some utilities worry that the growing use of distributed energy will erode their customer base and send them into a revenue tail-spin, what has been dubbed the ‘utility death spiral.’ Other utilities see microgrids as a new business opportunity.

Crane said the Vermont project will “prove that the concepts of ‘electric utility’, ‘renewables’ and ‘personal choice’ are not mutually exclusive.”

The plan has the backing of Governor Peter Shumlin.

“I’m proud to stand with GMP and NRG today to announce a partnership that will help Vermont transform our energy future,” Shumlin said. “We know the threat that climate change presents our economy and our way of life, but with this challenge comes opportunity. This partnership is exactly the type of leadership we need to seize that opportunity and create a model for the rest of the nation.”

Vermont represents a good statewide lab for a more distributed grid because of its small size and strong green energy inclination. The state houses only about three percent of New England’s power plants, about 900 MW, according to ISO New England.

The state has been planning a major shift in its power portfolio with the retirement this year of the 604-MW Vermont Yankee nuclear unit. The state’s energy plan calls for achieving an energy mix that is 90 percent renewables (including transportation fuels) by 2050.

Vermont already derives about 20 percent of its electric supply from renewables, much of it from Hydro-Quebec imports, according to ISO-NE. But it has been pushing to secure more renewables locally through its Sustainably Priced Energy Enterprise Development (SPEED) program. The state plans to serve 20 percent of the total statewide electric retail sales with new SPEED resources by July 1, 2017, and 75 percent by 2032.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

09/03/2014 0 comment

Energy Efficiency Renewable Energy

Would Homeowners Say “Yes” to Energy Efficiency if it Came with Solar?

written by Elisa Wood

Solar is experiencing over-the-top popularity among US homeowners; energy efficiency not so much. But what if state programs made solar a subset of energy efficiency?

That’s the recommendation of an intriguing paper released August 19 by the Center for Sustainable Energy.

The California non-profit tried to tease out what it takes to motivate solar customers to pursue energy efficiency. Homeowners run the risk of buying more solar panels than they need, if they do not make their homes efficient first.

Several state and utility programs think the energy audit is the answer. They require an audit before homeowners can receive incentives. But audits may have limited impact.

Such is the case in San Diego where the researchers studied more than 2,300 residents who participated in the California Solar Initiative rebate program.

Only 30 percent even remembered the audits being done; 42 percent said no audit was done and 28 percent were unsure. This seems to be a fault of memory, since paperwork was filed with the state verifying the audits.

Even though the audits didn’t make a big impression, the majority (87 percent) of those surveyed did make some sort of energy efficiency improvements. But the upgrades were mostly simple: swapping out light bulbs, fans and shower heads, or buying more efficient appliances. The homeowners tended to forego deeper retrofits. For example, only one in eight pursued duct sealing, although the average California home loses 30 percents of its air conditioning through leaky duct work, the paper said.

Only 30 percent even remembered the audits being done; 42 percent said no audit was done and 28 percent were unsure.

Avoiding grid power

Authors Ria Langheim, Georgina Arreola and Chad Reese then held focus groups to investigate the thoughts and actions of the homeowners more deeply. They talked to two groups that tend to invest in energy products, what they called ‘leading achievers’ and ‘practical spenders.’

Leading achievers typically own their homes, earn high incomes, hold advanced degrees and vote for liberals. Environmental concerns motivate them, as does worry about future generations.

Practical spenders are more politically conservative and pursue energy efficiency to save money and reduce dependence on foreign countries. Their incomes and education levels are slightly lower than the leading achievers.

The researchers found that having solar panels on their roofs did change behavior. The focus group participants reported that they were trying to use no more energy than the solar panels produced; they didn’t want to buy grid power.

Still most did not complete energy efficiency upgrades in conjunction with their solar installation, even though they understood the value of doing so. They made no strong mental connection between the solar installation, the audit, and timing of energy efficiency upgrades. “It seems that the requirement was merely a formality in the application process,” the researchers said.

Who’s talking to homeowners?

The authors speculated that solar contractors are not taking the time to educate consumers about the audit.

“The implications of this are potentially large given the scale of savings that could be left on the table when energy efficiency is not addressed comprehensively before the installation of the PV system,” the paper said.

So what’s to be done? The paper suggests swapping the order of things. Today, the energy efficiency audit is a subset of the solar installation process in the California program. Under their proposal, solar becomes a subset of energy efficiency. To get solar incentives, homeowners would sign onto an energy efficiency program. To that end, the paper suggests re-framing the California solar rebate program into a ‘home energy upgrade technology’ program.

Would this work? It makes a lot of sense. Consumers are motivated to pursue solar. They won’t abandon solar if it is folded into a larger home energy efficiency effort. But they may more seriously embrace energy efficiency. Another benefit: we could see “crossovers of energy efficiency contractors to solar and solar contractors to energy efficiency,” the paper said. Trained in both resources, the contractors are less likely to push solar at the expense of energy efficiency.

Called Energy Efficiency Motivations and Actions of California Solar Homeowners, the paper is available for free download here.

The paper is part of this year’s Summer Study held by the American Council for an Energy-Efficient Economy, being held Aug. 17-22 at the Asilomar Conference Center, Pacific Grove, Calif.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

08/20/2014 2 comments

Energy Efficiency

Utilities See Distributed Generation Coming; Energy Efficiency Working

written by Elisa Wood

Once upon a time when a big power plant retired, it was replaced by one as big or bigger. But not anymore. Energy efficiency is increasingly reducing the need for more power. And when it is needed, distributed generation may be enough.

That’s how utilities increasingly view the market, according to this year’s Strategic Directions: U.S. Electric Industry report issued August 12 by Black & Veatch.

The report is based on a survey of 576 utility leaders from May 7 to May 27.

As coal and nuclear plants retire, utilities find it less necessary to replace them with the same number of megawatts because of increased levels of energy efficiency, according to the survey. Instead, utilities can turn to solar and other smaller generators.

“Our system was built around the notion of central generation, transmission, distribution. But now with renewables and more self-generation, we are going to have to integrate those into the grid,” said Dean Osvig, president and CEO of B&V Energy. “What that means for the traditional utility is that they are going to have to make their money more on a capacity basis and less so on an energy sales basis.”

Over half the respondents said they are considering new generation, according to the results. But flat demand and a slow economy make it difficult for them to move forward.

“Many of utilities are putting off the large investments that they need to make until they can carefully analyze these scenarios with regard to demand growth and environmental regulations,” said Ann Donnelly, director at Black & Veatch. “More than ever, electric utilities need to carefully consider distributed generation and the role it may play in actually fulfilling customer electricity requirements.”

In a finding that may bode well for microgrids, reliability was the number one issue of utility concern among 10 listed. Others were environmental regulation, economic regulation, cybersecurity, natural gas prices, long-term investment, aging infrastructure, physical security, natural gas fuel supply reliability and fuel policy.

The report also found that emerging technologies, such as demand response, data analytics and advanced metering, provide more opportunity than challenges for utilities. Over 40 percent of the utilities surveyed said they have advanced data analytics programs is place, and more than 38 percent have advanced meters. More than 27 percent are using programmable thermostats for demand response programs; 26.5 percent have direct load control for home area networks; and almost 16 percent have in-home displays.

The full report is available for download here.

08/14/2014 2 comments

Energy Efficiency

International Energy Efficiency Ranking Shows How the US Shortchanges its Economy

written by Elisa Wood

A new international energy efficiency ranking by the American Council for an Energy-Efficient Economy places the United States at a lowly 13 out of 16 leading world economies.

There are many reasons to bemoan the finding. The US is throwing away a lot of economic opportunity.

Energy is a basic economic input. Using more, where less suffices, is like paying two workers for a job easily done by one.

“Energy efficiency means using less energy to accomplish the same or better results,” said Rachel Young, ACEEE research analyst and the report’s lead author, during a July 17 news conference. “Using less energy to do more means nations preserve valuable natural resources and can build, transport and grow at a lower cost than countries that waste their energy resources.”

China does better

Despite its iconic images of people wearing masks in polluted cities, China bested the US. So did India, where the grid functions erratically. In fact, all major economies outperformed the US except for Russia, Brazil and Mexico. Germany topped the list, followed by Italy, the European Union, China, and France.

“Stagnation and inaction” characterizes the US energy efficiency scene, Young said.

True, the US has improved with appliance standards, government/industry initiatives, and recent fuel economy standards. “However, the overall story is disappointing,” she said

Since the ACEEE’s last international energy efficiency ranking two years ago, the US “has progressed slowly and has made limited improvement,” she said. “In contrast Germany, China and Canada are pulling ahead.”

It’s odd that the US performed so poorly, given that it is home to innovation centers like Silicon Valley that are developing impressive energy efficiency technologies. Plus, the US has a president who clearly champions energy efficiency more than his predecessors.

So what’s the problem?

Energy efficiency efforts are scattered throughout the US. It is largely a local play, with some states aggressive in their pursuit and others negligent. The federal government could create a focal point for achievement, but Congress has done nothing significant on energy efficiency for a long time.

“We need policy from Congress to help folks back home, help companies back home, get a focus on the benefits of less is more,” said U.S. Congressman Peter Welch of Vermont.

Welch sponsored legislation to create a national energy efficiency target. He also supports stronger national building codes and education for industry. The US needs more emphasis on energy efficiency in federal transportation planning too, according to Welsh.

“These are all things that are going to make us money,” he said.

Here are some interesting statistics from the report that shed more light on the US’ lowly international energy efficiency ranking.

The US is one of only two countries with no national energy-savings or greenhouse gas reduction plan.
Since ACEEE’s last international energy efficiency ranking, R&D in energy efficiency has declined.
The US uses less combined heat and power (CHP) than many other countries.
In transportation, the US ranked second to lowest. This is because of its poor fuel economy and the high number of miles traveled per vehicle. The US also has scant mass transit compared with many other major economies.

It’s not all bad news; the US did pretty well in some categories. Even though there is no national mandate, states have imposed stringent building codes. And the US EnergyGuide and Energy Star labels offer best practices to the world market for voluntary appliance and equipment standards.

But how is it possible that China, with its heavily polluted cities, beat the US?

“Pollution and energy are related, but they are not the same thing,” said Steve Nadel, ACEEE’s executive director. “While China has more efficient cars, for example, the US cars are much cleaner. The US has much stronger emissions standards on cars, likewise on fixed sources. Also China uses far more energy from coal.”

Energy efficiency may help China reduce pollution, “but absent cleaning up their power plants and cars a lot more, their air is not going to improve,” Nadel added.

In the US, however, the reverse is true. Efforts to clean up the air, carbon dioxide in particular, could lead to greater energy efficiency. The Environmental Protection Agency in June released a draft proposal to reduce carbon dioxide from existing power plants. Energy efficiency is seen as the least cost way to meet the standard. So if the proposal is finalized as it is now conceived, the US could see a significant boost in energy efficiency projects.

But that won’t happen any time soon. It will be about another year before the EPA plan is finalized. After that the states must file plans to show how they’ll comply. That should take another year. Law suits could also cause delay. So for now, absent action by Congress, the US may continue to ‘spend’ more energy than it needs to get the job done.

Download the ACEEE 2014 International Energy Efficiency Scorecard here.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com.

07/23/2014 1 comment

Green Building

Where are America’s Greenest Buildings?

written by Elisa Wood

Ok, no surprise to see Washington, D.C. or San Francisco ranked high in a list of the cities with America’s greenest buildings. But Atlanta?

Georgia’s capital was the only southern state to make the top ten in the 2014 U.S. Clean Tech Leadership Index, released July 15 by Clean Edge. The cleantech research firm tracks the cleantech progress of the 50 largest metro areas and the 50 states.

“A good deal of Atlanta’s performance can be chalked up to the city’s green-building requirements, having passed an ordinance that all new city construction and major renovations must be Silver-LEED certified,” said Ron Pernick, Clean Edge managing director.

Atlanta knocked out Milwaukee to take over the number ten spot in the green building ranking.

The South has been notoriously slow to pursue green technology. But Atlanta is different. This is not the first time the city made Clean Edge’s top 10 list. It was number #8 in 2012, but then dropped to #12 in 2013, according to Pernick.

With the exception of Atlanta’s entry, the green building list showed little change over 2013. Clean Edge attributed the lack of change to the long lead times for new construction.

This year’s top spot went to Washington, D.C. , driven by efficiency efforts in federal buildings. Boston and Minneapolis also made the top ten. Otherwise the usual suspects, Western cities, dominated the top slots: San Francisco, Denver, Portland, Seattle, San Diego, Sacramento. The five cities at the bottom of the green building list were: New Orleans, St. Louis, Memphis, Birmingham and Oklahoma City.

Why cities are important

Energy use by cities is gaining increased attention because of the dramatic population growth in metro areas. Cities accounted for almost all US population growth from 2012 to 2013.Worldwide, 7 out of 10 people are expected to live in cities by 2050, up from today’s 5 out 10.

Meanwhile, city leaders are increasingly pursuing green energy to attract jobs and meet carbon emissions goals. They are also looking for more control over their power supply, which is contributing to growing interest in microgrids and other forms of decentralized energy.

Green building was just one aspect of the green tech market analyzed in the detailed 49-page report. It also looked at electric vehicles, renewables, patents, policies, investment and other factors that signify progress by cities and states.

Across all categories, the top three cities were all in California: San Francisco, San Jose and San Diego, which jumped four places. California was the top state for the fifth consecutive year, with Massachusetts and Oregon repeating their #2 and #3 rankings from the 2013 state index. Vermont and Connecticut moved into the top 10 this year, while Hawaii and Minnesota dropped out.

For overall energy efficiency, California continued with the lowest annual per capita consumption, 6,704 kWh, followed closely by Hawaii. 6,767 kWh. The remaining top states were all in the Northeast, with the exception of #9 Alaska

Other significant findings from this year’s report are:

Colorado, Vermont, Oregon, and Washington each now exceed 100 LEED projects per million people for the first time
Eleven states now generate more than 10 percent of their electricity from non-hydro renewable energy sources, with two – Iowa and South Dakota – exceeding 25 percent.
U.S. solar installations climbed more than 40 percent year-over-year
Registrations of all-electric vehicles more than doubled from last year to nearly 220,000 nationwide
At least eight states now have more than 50 percent smart-meter market penetration; California leads with 70 percent.

“Net-zero building and energy-storage mandates and new public-private investment vehicles are just a few of the emerging policies that are dramatically shifting the energy landscape,” said Clint Wilder, Clean Edge senior editor. “While there have been some regional attacks against cleantech supportive policies, such as net metering and renewable portfolio standards, for the most part, the clean-tech industry and its allies have successfully fought off such efforts.”

Issued July 15, the 2014 U.S. Clean Tech Leadership Index is available here.

07/16/2014 3 comments

Energy Efficiency

Joule Assets: Unearthing Hidden Revenue for Smaller Energy Efficiency Companies

written by Elisa Wood

Take heart smaller energy efficiency companies. Good times are coming.

That was the positive message from Mike Gordon, CEO of Joule Assets, as his company recently rolled out news of $90 million in financing being offered to 10 US companies with a $270 million pipeline of projects.

“The contractors, the technology integrators, technology providers, vendors – these guys in the market, they are more powerful, with more opportunities than they perceive,” Gordon said in an interview. “It is only getting better.”

The New York-based firm has carved a niche helping smaller energy efficiency companies with its $100 million fund announced earlier this year.

Lacking the federal contracts of the big ESCOs, smaller energy efficiency companies often find it difficult to secure funding and bring their products and services to scale. Joule Assets provides them with backing, so that they can finance deals for customers, close on them and build a portfolio.

Wholesale market money

The New York company also helps contractors aggregate savings and tap into revenue streams from wholesale power markets. These markets are complex and risky, so are often avoided by smaller companies.

Smaller energy efficiency companies typically “have no idea about the permanent demand reductions available in New England or Pennsylvania, New Jersey, Maryland,” Gordon said. “If they do know about them, they don’t necessarily know how to register it. Or if they do know how to register it, they don’t necessarily know how much it is going to be worth. If they do know how much it’s going to be worth, they don’t know what vendors they need to engage.”

The same holds true for capacity demand response, spinning reserve demand response, hourly demand response, and even in some cases rebates, he said. Smaller companies are unaware of these financial opportunities.

“Those are the kinds of things we introduce to these projects to make them more valuable,” he said.

Whiz-bang tech may dominate the headlines, but it was traditional projects that penciled out for Joule Assets in this funding round: lighting, AC, control system upgrades and integration, and energy management software.

For the most part, Joule Assets kept the chosen companies names confidential. But it did highlight one contractor, NorthWrite, an energy information management company that expects to finance 50-100 energy efficiency projects in the next 12 months in schools, restaurants, national chains, offices and other small commercial buildings.

Patrick O’Neill, NorthWrite founder and CEO, said that Joule Assets has “a level of domain knowledge around conditional cash flows that others deeply discount or won’t even consider, which is what makes these projects possible.”

Watching NY, New England and microgrids

Gordon also keeps an eye on how wider market changes might influence the energy efficiency industry. He’s now watching New York’s Reforming the Energy Vision, or REV, which sets up new rules for the grid to create a distributed energy market – somewhat akin to the state’s wholesale energy markets.

Gordon sees a lot to like in New York’s vision, but he is worried about a state recommendation that utilities act as operators of the new, distributed grid.

“I think it is a very exciting vision – New York is exciting. More power to the folks who have begun to formulate it. However, as far as I see it, the devil is in the details,” he said.

In ISO New England, he sees a market with “stark physical need” where prices for peaking products are going up. He doesn’t think a publicly funded roll-out of smart meters is the solution. What will work is a well-designed market with critical peak pricing, no bid limitations on energy nodes, capacity markets, and nodal requirements for “every single product so that you can have some locally based products,” he said.

“If you design your market that way, you are going to have financiers like us lined up, coming out of the woodwork,” he said, adding, “I don’t think you need state funding. You need well designed markets.”

On microgrids, Gordon says he sees interest in the technology emanating in part from a growing sentiment for “power by the people, not power to the people.”

The key to that market, he says, is support for the ”multi-stakeholder microgrid,” a configuration beyond the more common university or military microgrid, something more like a neighborhood microgrid with generation, demand response and control infrastructure that can reliably isolate and operate.

A good example of a multi-stakeholder microgrid is New York’s Co-op City, a 330-acre housing cooperative in the Bronx with a 40-MW combined heat and power plant. This kind of microgrid will emerge more and more once microgrids have full access to market cash flows, he said.

“By that I mean if a neighborhood decides it wants to slowly grow into a microgrid construct , it should be able to create its own power supply – maybe not 100 percent of their use but a portion of their use – then they should be able to sell what they don’t use into the more sophisticated electricity market.”

The bottom line for Gordon? Markets, markets, markets. Get them right and the rest will work.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

07/09/2014 1 comment

Renewable Energy

If You Had Five Minutes to Talk Alone with Obama on Energy: Rocky Mountain Institute

written by Elisa Wood

What would you say if you had five minutes alone with Obama on energy? EnergyEfficiencyMarkets.com asked Jules Kortenhorst, CEO of the Rocky Mountain Institute, in the first article of this occasional series.

What energy idea would you discuss with Obama if you had five minutes alone with him? What argument would you use to win him over to the idea?

The United States needs to double down on energy efficiency. We made great efficiency strides in the wake of the oil embargoes of the 1970s, when U.S. energy consumption per dollar of GDP dropped five times faster than it had over the previous quarter century. But while the energy intensity of our economy has continued to decline, albeit much more slowly, we can do better. Energy efficiency remains the lowest-cost source of energy, and the cleanest kilowatt is the negawatt you never have to burn. The inefficiencies still embedded in our buildings, cars, electronics, and more offers a wealth of economic opportunity to unlock. That’s also why—whether you care about the economy, or climate, or another motivation—energy efficiency is a no-brainer that should garner broad bipartisan support.

If Congress agreed to pass one energy bill, and you got to write it, what would it do?

While the new EPA regulations curbing power sector carbon emissions are an important step in addressing climate change, institutionalizing more aggressive climate mitigation through a bipartisan act of Congress—something more robust and less easily undone than the President’s executive order—is a clear next step. Such a bill could include a carbon tax or carbon cap under a technology-neutral feebate program … an approach enabled by policy, but moved forward through markets. Such a bill wouldn’t burden the economy, but rather profit it. Climate change mitigation turns out to be not just exceedingly cheap, but economically profitable. RMI’s own rigorous analysis, Reinventing Fire, found the U.S. could transition to a 2050 economy energized by tripled efficiency and 75 percent renewables for a $5 trillion net-present-value savings—not net cost—while supporting a 158 percent bigger U.S. economy and slashing carbon emissions to 82–86 percent below 2000 levels.

If you had the undivided attention of every PUC commissioner in the US for three minutes what would you talk about?

The urgent need for new business models that address the rapidly evolving nature of today’s power grid is the most pressing issue facing the utility industry. From debates about the future of net metering in many states to contentious interconnection delays for rooftop solar in Hawaii, as customer adoption of distributed energy resources continues to grow at an ever faster pace, utilities—and the state-level regulators that govern them—need to revisit their traditional business models. The “old” way of recouping major infrastructure investment through kWh sales is proving increasingly antiquated. This is not a hypothetical future but a near and present reality. For example, RMI’s recent report, “The Economics of Grid Defection,” analyzed when and where solar-plus-battery systems could reach parity with retail electric prices. A forthcoming Electricity Innovation Lab (eLab) paper explores what future business models could like via alternative pricing, but it’s clear we must develop and adopt regulations and rate structures that enable the evolution of a 21st century grid that is clean, affordable, and reliable.

You’re in an elevator with the FERC commissioners, and they ask what’s on your mind when it comes to energy policy. What would you say? You only have a minute before the elevator opens, and they all get out.

The U.S. is blessed with abundant, concentrated sources of domestic renewable energy, from Southwest sun to Midwest wind. But those sources are often located far from the population centers they serve. FERC will have an increasingly important role to play in helping to deliver power across interstate transmission systems as renewables grow in scale. RMI’s Reinventing Fire analysis shows how we can power the U.S. with 80 percent renewables by 2050, half of them distributed on places like customers’ rooftops. But that leaves another half of utility-scale renewable generation that we’ll need to transmit from the places where we source it to the places where we consume it. FERC will have an integral role to play there.

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

07/07/2014 4 comments

Energy Efficiency

How Do Utilities Make Money in an Age of Energy Efficiency?

written by Elisa Wood

Electric utilities are survivors. Their doom has been predicted many times over the last few decades as their industry restructured, competitors arrived and new technologies emerged.

Rather than die, utilities morph.

We’ve entered yet another period of utility disruption. This time the challenge is formidable. Electricity sales are flat in the U.S. Worse, electricity use could decline as much as 10 percent from 2013-2040, according to the American Council for an Energy-Efficient Economy. That kind of prognosis would unnerve any industry.

So how will utilities save themselves? What will they morph into this time? Some recent events provide clues.

Kill Our Old Network

Electricity sales are falling because our appliances, homes, offices and factories are now more energy efficient. With less energy, we get more light, heat, and machine action.

It’s good for us, bad for utilities. We don’t have to buy as much of an electric utility’s main product. So some utilities are beginning to think they need a different value proposition.

One of these is National Grid, a utility in the Northeast that often acts as a testing ground for new ideas.

“Can utilities and energy companies adapt quickly enough and continue to grow and prosper? We believe they can,” said Rudy Wynter, National Grid’s president of FERC regulated business, in a recent interview with EnergyEfficiencyMarkets.com.

National Grid has developed an internal point of view about the utility industry’s future that it calls Connect21. The premise is that “it’s time to kill our old network paradigm and create a new one,” the utility said in a white paper. National Grid uses Connect21 as a framework to consider new projects and policies as they arise.

Policy vendor

Connect21 brings a kind of honesty to the relationship between utilities and regulators. Utilities tend to be the vehicles through which states carry out energy and environmental policy. National Grid proposes that regulation be changed so that utilities are paid based on how well they fulfill that mission.

Wynter described it as “aligning and rewarding utilities for meeting some big public policy goals, whether those policy goals are energy efficiency, carbon reduction, resiliency – whatever the big public policy goal is.”

Connect21 has three main components.

First, the utility works to improve the grid’s backbone, its transmission system, so that the grid is ready for the changes now occurring, such as the addition of renewables, microgrids, and other distributed resources.

Second, the utility partners with third-party technology companies, so that it can bring to energy the kind of innovation we’ve seen in telecommunication and personal computing.

“If this industry is going to have the big catalyst it needs to really change how customers use energy, how we move energy, we’ve got to bring in some new thinking,” he said. “To be honest, we haven’t done, as an industry, a great job at embracing these technology partners.”

And third, the utility needs to foster the trend of putting customers more in charge of their own energy and making educated choices about energy efficiency and distributed energy.

Connect21 is the broad stroke business plan; National Grid said it will be honing it as policy evolves in the states where it does business. The utility likes New York’s proposal to make utilities ‘system integrators’ that manage the many different kinds of distributed resources on the grid, Wynter said.

What about competitors?

“We think the utility is going to play a vital role as a well-placed system integrator that provides delivery, infrastructure and other related services. I think that’s the model we are probably morphing into in this industry,” he said. “As the business model and industry evolves, someone is going to have to play the role to integrate the distributed resources and dispatch some of these very localized forms of generation and help the customer manage that. We think the utilities are well positioned to play that role.”

Some aspects of National Grid’s plan are likely to be controversial. Independent companies worry about too much utility influence and control over the market. Some already are challenging the idea of the utility – rather than a neutral third party – acting as the system integrator.

In addition, some distributed energy advocates are concerned about creating incentive for utilities to build more infrastructure. They worry say that it will lead to an over-build – that generation and transmission will be used to meet demand in places where energy efficiency would be most cost effective. And finally, competitive companies see utilities using their market clout to dominate technology distribution and installation.

When states restructured their power generation markets more than a decade ago, several placed prohibitions on utility ownership of generation. Should the same be done for distributed resources? Wynter says no.

“You’ve got to look at the right solution. If the right solution is to have a third party provide it, then let the third provide it. If they cannot, then the utilities should be allowed to provide it,” he said. “We just have to put in the right mechanisms to be sure we’re making the right decisions.”

This article is published under a cross licensing agreement with EnergyEfficiencyMarkets.com

06/25/2014 2 comments

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