Momentum builds for energy efficiency...but is the wolf at the door?

It says something that Ernest Moniz chose to deliver his first public talk as US energy secretary to an energy efficiency crowd.

His appearance last week at EE Global in Washington, D.C. was a surprise of sorts. And the timing was significant. Moniz had only been confirmed as energy secretary three hours before taking the podium at the Alliance to Save Energy’s annual conference.

Why did he make the stop?

Probably not because of the size of the crowd. About 550 people attended the two-day gathering. For the energy efficiency industry, these are impressive figures, but by energy conference standards in general, not so much. Ten thousand people attended the American Wind Energy Association’s most recent annual gathering and Solar Power International drew 15,000.

Nor was it likely because of the crowd’s influence.  The big money in energy lies elsewhere, with the utilities and the oil and gas industries, which have contributed the bulk of the $91 million spent lobbying Congress on energy issues so far this year, according to the Center for Responsive Politics.  Energy efficiency companies represented only a smattering.

Instead, Moniz’ presence signaled not what the energy efficiency industry is today, but where it’s going – quickly – and the Obama administration’s willingness to help it get there.

In fact, Moniz called the timing of the efficiency conference and his nomination “fortuitous” because of the aligned agendas. “Efficiency is going to be a big focus as we go forward,” he said.

Energy efficiency is poised to be the next big thing in clean energy, ready to take the steps two at a time, as the wind and solar industries have in recent years. (The US wind industry grew 500 percent from 2006-2012; solar has grown almost 300 percent based on megawatts installed)

Energy efficiency’s growth is being fueled by several factors, not the least of which is economic. The market is working in its favor.  Energy prices are up and efficiency offers a way to get them down.

The US Energy Information Administration projects that electricity prices will grow 2.6 percent in 2013, almost double the 1.4 percent increase in 2012. This follows a $720 million rise in energy costs from 2002 to 2011, almost as great as the US’ jump in healthcare costs during that time frame, according to a report released at the conference by United Technologies Corp.

“Energy prices have risen to the level where avoiding the cost becomes the investment opportunity. I think that opportunity will only grow,” said John Mandyck, chief sustainability officer for United Technologies Climate, Control & Security, in an interview.

In fact, UTC found in a report that a 30 percent increase in building efficiency would not only pay for itself, but also generate a net positive cash flow of $65 million per year. This beats the rate of return for corporate bonds, according to Mandyck.

That’s the good news.

The bad news is that as energy efficiency grows in stature, it is likely to attract some of the same enemies as the wind and solar industries. For a look at one of these confrontations – a 12-year confrontation – see this story about Cape Wind’s battle with oil billionaire Bill Koch.

The wolf has already shown up at the door in the Northeast, according to  Susan Coakley, executive director of the Northeast Energy Efficiency Partnerships. The Northeast, in particular Massachusetts, is one of the most active energy efficiency markets in the US.

For example, Americans for Prosperity has pushed for repeal of the Regional Greenhouse Gas Initiative in several Northeast states.  RGGI is a large source of funding for energy efficiency in the region.

“When you are number one in the country, and you are making that kind of progress, you sometimes have a bulls-eye on your back,” said Coakley, during a panel discussion at EE Global. “And indeed, we are beginning to have some well-funded pushback. This is not internally driven. This is externally driven. I’ll tell you right now, it is the fossil fuel industry that is setting up institutes to push back on our policies.”

But the energy efficiency industry comes to the fight with strong advantages. It can build on the lessons learned by the wind and solar sectors in fending off their opponents. And it clearly has some good friends in high places.

 

Elisa Wood is a long-time energy writer whose work has been picked up by CNN, the New York Times, Reuters and the Wall Street Journal Online. See her articles here: http://www.realenergywriters.com/elisa-wood/

Views: 1114

Tags: Moniz, Obama, efficiency, energy

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Comment by R Higgins on July 1, 2013 at 6:31pm

Quick look at the comments, and can't see an obvious...

      Absolutely, Energy Efficency - Way to Go!

Of couse, this isn't "news".

What is news is that the gov't is starting to ensure that those who control building's energy use, the real estate industry works as hard to conserving energy as "making a quick buck", the goal of every developer, big, med, and small.

I was there back at the first energy crisis, when conservation was the only way to go (way before solar or even wind were but dreams).  Superinsulation and passive solar were born then, and have just been reborn.  Still, look around, you see mass housing, or much  housing being built with either?  Nope.  Nor will you until ALL elements of the real estate industry are FORCED through codes AND HONEST THOROUGH inspections / testing / energy reporting to implement these two low to no cost methods that can cut building energy use by 75% and more for less than a 15% upcharge TOPS, less than 10% will acheive most savings.

Check out NYC ECC regs, requiring (for now just very large - but it'll expand) landlords to REPORT energy and water use, carry out energy audits AND IMPLEMENT CHANGES WITH 5 YR OR LESS PAYBACKS.  The energy reporting will be used to further tighten the noose on the "quick buck" real estate industry that controls most building, eventually requiring buildings to meet per sf energy goals.  Also, reporting energy use "proves" conclusively if the building was built right, or if the insulation was skimped on.....  

Potential savings, easily 1/2 of buildings energy use (any professional who can't figure out how to cut a 20 - 50 yr old buildings energy use in half, needs to study harder), which would cut overall energy consumption 20% I believe (buildings account for 40% of energy I believe).

Oh, and "quality control" in contruction, NYC is enacting more and more requirements that building 'inspectors" (most are privately hired in NYC, belive it or not) those who are reporting to the DOB that buildings are built right, that these inspectors pay fees to take tests to prove they know their work, then be licensed, which can be revoked if they rubber stamp shoddy construction. 

Comment by David Eakin on June 19, 2013 at 2:51pm

Here's a very recent article on Green Building Advisor that reinforces the issues to this problem: Green Building Advisor article

Comment by Melissa Baldridge on June 14, 2013 at 12:41pm

Hi Ted,

Nope, 'not directed at you in particular, but I'm glad it made you feel good.  I posted it because I think we, as an industry, are ALL seeking to wrest big changes inside big industries - real estate, construction, etc.  AND I think we'll prevail because (1) what we're doing is good for people and the planet and (2) energy efficiency is really about disclosure.  And that's a big, big deal in real estate.

If I personally didn't feel brought into this work and guided by Something Bigger, I don't think I'd be able to do it - deal with the challenges, the naysayers and prognosticators.  But I think we're right, and industries are changing before our eyes to accommodate better ways of building. 

So keep the faith, dear colleagues!  I admire you all because the cause of better building really is a calling.  Thank you for heeding it.

Comment by tedkidd on June 14, 2013 at 12:06pm

Comment by Melissa Baldridge yesterday

First they ignore you.  Then they laugh at you.  Then they fight you.  Then you win.

-Mahatma Ghandi

Wow Melissa, I suspect that wasn't specifically directed at me but it definitely felt good to read it.  Elisa, love to hear your thought (and anyone elses) on this: 

http://bit.ly/TrustTransparencyTruth

Comment by Melissa Baldridge on June 13, 2013 at 6:38am

First they ignore you.  Then they laugh at you.  Then they fight you.  Then you win.

-Mahatma Ghandi

Comment by Dennis Heidner on June 12, 2013 at 8:10pm

Not sure if this link will make it through

http://factfinder2.census.gov/faces/tableservices/jsf/pages/product...

The is a great source of data for those how haven't browsed before.

For those interested -- it is US Census fact finder,  with a table that shows "PHYSICAL HOUSING CHARACTERISTICS FOR OCCUPIED HOUSING UNITS  2011 American Community Survey 1-Year Estimates.

Number of homes, number owner occupied, the age of homes, number of baths, etc.  I've seen good numbers from DOE with breakouts by age of homes.  The take away is that about 30% of the houses have been built in the last 20 years.  For these homes (hopefully) the contractors did a reasonable job and the houses have windows that don't need replacements,  walls that are insulated, siding is okay, etc.   So in this group - the obvious easy improvements come HVAC replacements (as units wear out), appliance replacements (as they wear out etc...)

Then there are about 40% of the houses that were made between 1960 and 1980.  These are the houses that may need HVAC (ventilation) replacements, appliance replacements,  deep dives into the windows, insulation.  What I've seen happen are various companies selling they can fix MOST of the energy problems for houses in these age group by addressing ONLY windows, or ONLY insulation, or ONLY HVAC.  Really houses are systems of systems - and the 1960-1980's group may have MULTIPLE systems that are now past their prime and need repair replacement.   Appliances can easily save a signficant portion in these houses -- if they still have some of the original appliances installed -- and I've seen that!!    

Then there are the houses built before 1960,  about 30%;  these are homes often with a lot of character and history behind them.  Some with "good bones" as Prof Joe Lstiburek says.... and some that would be great practice buldings for the local fire department burn training exercises.  These are the houses that I love watching on "This Old House" and other TV programs.   They are of course great canidates for energy efficiency improvements -- if the remodel contract really knows what they are doing AND the customer is willing to pay.

Most of the energy efficiency programs are focused on the easier fixes, appliances, insulation, lighting, heating/cooling and windows.  Few of the programs provide funding for major structure fixes and correcting broken bones.

In the residential market,  I think David Eakins observation about owners treating houses as short term stays - will be the most damaging for the middle group the 1960-1980 and some of the early 1990's homes.  If the energy improvements are combined with maintenance activities on these home -- they would last for a long time.  Ignore both - and they become targets for fire department training exercises.

Homeowners in each of the groups above are likely to have very different priorities on where and how much to spend the money.  And the older we get - the more conservative (money wise) as the incomes become fixed.  As we get older -- we also often become more politically conservative (not meant to offend anyone).

So when you look at possible energy efficiency programs and battles that may be fought - we need to look at the efficiency program and what  they were targeting.   Appliances that all of us use and eventually replace?  Or improvements in HRV/ERV's for which some people might not understand the need.  Cold walls that people can feel - or repairs/upgrades to crawl spaces that are mostly out of sight and out of mind.

As long as the programs target the areas that have the highest impact - monetary, social and environmental - I think that the Americans for Prosperity will need to stand down.  

I wish I new exactly how to meet all those goals -- I'd make a fortune.  But I do know that we need to make sure that owners truly understand that homes and buildings are  "systems of systems"   

Comment by Joseph Lamy on June 12, 2013 at 6:40pm

If a cheapo electric resistance heater delivers 3413 BTU every hour for a dime, and costs me $15.99, please tell the Court how a mini-split heat pump delivering 3413 BTU every hour for 3 cents is a bargain for an installed price of $6,999...

If I can buy  bags of insulation at Home Depot for $10 each and use their machine for free, tell me one more time why you are charging me $100 a bag to deliver the stuff in my attic...

It seems the homeowner has some legitimate questions about the value of our suggestions/credibility.

 

Comment by tedkidd on June 12, 2013 at 1:01pm

The claim energy use is not predictable is attempt to shirk responsibility, avoid accountability, and continue selling based upon lies and exaggeration.  Don't do it or you look guilty by association.  

I don't think that's what we should do in Home Performance.   

The idea that energy use is predictable to the head of a pin is an absurd argument for not bothering.  Facetious.  Dishonest.  No reasonable person expects perfect accuracy, and reasonable accuracy is easily achieved.  

If you promise $500 in savings and they achieve $450, I don't think you have a problem.  It's the promise of $500 delivering $190 ON AVERAGE that is a very clear problem.  

One of the really big guys in our space just posted this publicly:

 
Matt Golden • I think there will be a class action lawsuit on our savings numbers... just the moment this industry is big enough to be worth suing. Who is big enough to pay up is the problem. 

Solar industry is seeing class action suits over exaggerating rises in energy costs:http://www.greentechmedia.com/articles/read/sunrun-class-action-com... 

Car companies sued over exaggerated MPG: http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/362... 

These guys have nothing on us! I see data on some of our biggest programs that says we sell savings that are 50% greater, and sometimes more, than we deliver. And we now know it! 

It is just a mater of time.
 
How one might look at the numbers: 
 
50,000 NY consumers told they're going to save $700 a year saving only $266?  $21,000,000 a year in undelivered savings.  At a 5% cap rate, $434,000,000.  Sound like financial harm to you?  Like bankers selling derivatives without accountability?  
 
Here are the numbers: 
http://bit.ly/2007NYSERDAhpwesresults -The first report I found has program realization at .38 (see appendix page 13)
http://bit.ly/NYSERDAandreattareport - the "we suck less" report - see conclusion at bottom
http://bit.ly/2012HPwESImpact - didn't turn out as well as "we suck less" report projected
 
Here is a problem I see NYSERDA is seriously exposed to:
We need some accountability here, or we simply become the rebranded offspring of 1990's window salespeople. 
Comment by David Eakin on June 12, 2013 at 12:19pm

Dennis,

I agree that occupant usage skews historic energy usage records, but what better way is there for a potential home buyer to get a "ballpark" picture of energy usage? 

I have also seen some interesting technology shelved due to high market entry prices and previous assembly line tool/training costs. Like condensing or microwave dryers. No exhaust ducting needed (or leakage endured) so you can put them anywhere in the residence.

My concern with appliances in general is the "engineering obsolescence". Most appliances (of any cost; includes automobiles, HVAC units, etc.) are not engineered to last any where near appliances of several decades ago. Those that can be repaired usually are not if the total repair bill exceeds the "50% of buying new" rule. So the energy efficiency improves, but the total cost of ownership increases exponentially. I'm not surprised by this as this is what has been taught for decades at all engineering and business management schools (and appliance companies are in business to make money by selling automated assembly line-constructed appliances at maximum profit margins). I'm really surprised that large-scale modular housing has not caught on as this would be the ultimate application of the "appliance" direction - just have the old modules removed and new ones installed.

Danny,

I agree with all your points (even the dubious previous-year's utility bill disclosure - better than no info which is what real estate agents give you today), which is why I have been a strong proponent for a nation-wide, mandatory building code that requires a high degree of building science for any new construction or remodel (even going so far as to mandate very low blower door measurements, mandatory outside air delivery, and no non-sealed interior combustion devices - sorry Dennis).  Other countries have done this as part of their overall energy program, why not us? Some say that acceptance of ARRA funding will do this shortly, but builders/remodelers build to local building codes so until they are changed (can anyone say "state's rights"?), I'll believe it when it happens.

Elisa,

I do not think the current "renter" mentality is a result of the recent housing market downturn as I have seen it creeping into all sorts of decisions regarding personal finance budgeting and discretional funds spending.  Maybe it is a backlash from the "me generation" thinking, maybe it is a result of our current "buy everything as cheaply as possible because it is all the same" thinking (despite hundreds of discussions on why most everything is not "the same" or other forms of "education" to the contrary - see http://www.toptiergas.com/ and then see if your gasoline buying habits change). I see this as a "sea change" in American buying trends that will probably last for several decades regardless if the housing market rebounds or not.

Comment by Dennis Heidner on June 12, 2013 at 12:53am

Danny,   I partially agree on transparent reporting for the house energies - HOWEVER - I am now running a business from at home.  My energy use is much higher than a person that commutes to work and leaves the house unattended all day.   Utility bills do not explain the pattern of use, they can only confirm the usage.  One of the other shifts that occurred in the 90's and 00's was an increased number of employee's telecommuting.  In the 80's and 90's it would have been easy to prove to a potential buyer that your energy consumption was related to at home work... simply by counting the number of phone lines installed.  Now with cellphones and internet access that doesn't work.

As for the appliances - I certainly would like to see the efficiency of them improve.   The  appliance that remains in my cross hairs for the longest is now the dryer.  The test protocols for dryers are finally being approved.  My dryer of choice is gas (for various reasons).  I'd love to see a fully modulating, spark ignition, dual electronically commuted motors (drum and fan) - gas dryer.  All those technologies have been available for YEARS. Some of the patents expired long ago... no such critter for sale.  However prototypes were made and tested back in the early 200x's  When the economy collapsed - new products were shelved.

Now as the economy is starting to pickup - perhaps some of the products that didn't make it out the door will be updated and offered for sale....  if so we can see some really efficient appliances in the next couple of years.

Elisa,  rough numbers from US census.  http://www.census.gov/compendia/statab/2012/tables/12s0007.pdf

US Population (2010 census) population is: 308,746 million,

Age 18 and older  234,564

Age  55 and older  76,751

So the under 18 age group would be 308,746 - 234,564 => 74182 (under 18)

There are about 30,672 in the 18-24 age group -- not likely to be buying a house, they are in college or banks do not want to take the risk.   So target market for houses MIGHT be 234564 - 30672 - 76751 => 127141

A portion of the 127,141 will  pair up with family members or friends.  So the quantity looking for houses is probably far less than 127141/306746  (about 40%) of population. In the 1990's and 2000's the employers were saying that "employees" wanted 401K plans that were portable.  Some companies used that reasoning to change their employee pension plans into 401K only plans.  Companies were also telling employees to be nimble and willing to move.  During the last economic downturn,  professional organizations like IEEE were telling members jobs are their - but you need to be willing to move.  So in essentially in the last 20 years one of the largest groups that would be buying a home or multiple homes (vacation spots) -- no longer want to be anchored to a house - because their jobs may change locations.

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