Beyond Lighting: Innovative EE Program Ideas For Small Business

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Lily Li's picture
Founder and CEO, Hancock Software

Lily has been the guiding force at Hancock Software since its inception in 2004. She is a naturalized U.S.citizen originally from China where she graduated top of her class with a MS in Physics...

  • Member since 2019
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  • Mar 23, 2020

This item is part of the Innovations in Power - Spring 2020 SPECIAL ISSUE, click here for more

In his article “COVID-19 and Climate Change,” Joel Makower of GreenBiz Group makes a sobering  connection between this pandemic and climate breakdown.  For nearly two decades, health officials around the world have warned about the rise of infectious disease from a warming climate.  In 2014, in a Climate Change Adaptation Roadmap, the Pentagon warned of “the emergence of new strains of disease.”  According to Tedros Adhanom Ghebreyesus, director-general of the World Health Organization since 2017, “As man-made climate change has taken hold over the last four decades, dozens of new infectious diseases have emerged or begun to threaten new regions, including Zika and Ebola.” Moreover, he writes, “Bubonic plague, spread by rats and fleas, is predicted to increase with warmer springs and wetter summers. Anthrax, whose spores are released by thawing permafrost, could spread farther as a result of stronger winds.”

Ebola? Bubonic plague? Ancient diseases emerging from melting permafrost? I’m not trying to say Coronavirus was caused by global warming, but it should serve as a comparatively gentle wakeup call to us all to double down our decarbonization efforts.  Our planet can’t afford our continuing glacial pace of carbon reduction.  We can no longer be content picking the low hanging fruit that has been the bane of Energy Efficiency efforts in the small and mid-sized (SMB) commercial building sector. 

Energy efficiency can slash US energy use and greenhouse gas emissions by about 50% by 2050, getting us halfway to our national climate goals.  Small commercial buildings with monthly demand below 200kW represent 47% of a typical utilities demand but have proven hard to reach for energy efficiency retrofits.  Despite a variety of efforts focused on engaging small business owners, utilities on average see less than 1% participation by small businesses in their Energy Efficiency programs each year.  These utilities often use direct-install programs for the relatively hard-to-reach small business sector. Contractors qualified and selected by the program do an energy audit and equipment installation all in one visit. 

While this type of program is effective at overcoming the high cost per unit of energy saved of small business energy retrofits, they have relied almost entirely on lighting measures for their energy savings often leaving stranded other important but less economical energy savings measures.    Energy Efficiency programs must move beyond lighting and find deeper energy savings at the small businesses that have been mostly underserved by utility programs.  

How do we accelerate greater participation in energy efficiency retrofit projects by small businesses?  How do we go beyond lighting retrofits for deeper savings in buildings with relatively small energy savings per location?

For an innovative approach to overcoming the barriers to the broader and deeper participation needed by small business, I would suggest that we look to the D.O.E funded residential Weatherization Assistance Program (WAP).  In total since 1976, WAP provided over 7 million low-income households with home improvements worth an average of about $5,000 and typically saving 20% or more on their energy bills.  From capital constraints, to energy awareness, to competing priorities, these low-income households share many of the same obstacles to EE retrofits that we see with small business.    While Community Action Agencies that administer WAP programs in every state are free to run their programs as they see fit, they are all singularly focused on streamlining client identification, qualification, and measure installation processes to stretch limited grant funding to as many homeowners in need as possible. 

The best performing of these agencies share some common best practices we should consider to improve small commercial energy efficiency programs.

Prescribed conservation measures: When a Community Action Agency visits a home for potential weatherization, the auditor is working from a pre-approved list of measures that varies depending on whether it is a single family, multi family, or manufactured home.  In some cases, measures are analyzed for potential energy savings and in others they are prescribed with deemed energy savings.  Either way, they have a template of solutions that dictates the data that they must collect and the analysis to be completed expediting the measure identification and qualification process. 

The diversity of the SMB sector is one of the major reasons that we’ve only managed single measure direct install type retrofits thus far.  Instead, create a program template specifically for restaurants for example, that includes not only lighting but the measures most beneficial to a restaurant like refrigeration, HVAC tune up, electrification and controls.  Then you can leverage the most economical benefits to bring together a full spectrum of deeper savings all in one project, rather than picking just the low hanging fruit and leaving the less beneficial measures stranded.  Likewise, create program templates for supermarkets, car dealers, dry cleaners, retail shops, and so on. 

Education and behavior modification:  When the WAP agency staff are in the home, there is inevitably a kitchen table conversation where the homeowner is made aware of the energy savings potential for their home.   This instruction covers the conservation measures to be implemented and their benefits as well as behavioral changes needed to realize the full potential to save on their energy bills.  It does no good to put in a heat pump for one zone in a home unless the homeowner knows to set back thermostats in the other zones.  Likewise, the auditor going in to a small business should be prepared with educational materials and tools to have a similar “kitchen table conversation” in the same visit while they have the business owner's attention.

Streamlined implementation:  Whether they use their own installation crews or subcontractors to install conservation measures, the WAP agencies are forever working to streamline the implementation process.  They have established material and labor costs for the various measures.  They inventory frequently used items to speed implementation and to leverage bulk purchase discounts.  Where subcontractors are used, they have pre-negotiated agreements that make it possible to forego a costly bid and procurement process.  For small commercial retrofits, programs need to partner with Energy Service Providers who specialize in a particular SMB sector like restaurants.  The ESP will develop proficiency from repeated implementations that will further drive down the cost per unit of energy saved.

Technology empowered field staff: WAP agencies that have done the best streamlining the delivery of energy conservation measures to reach the most homeowners in need have equipped their field staff with technology to be able to audit, assess energy savings priorities, and educate the homeowner all in the same visit.  Rather than collecting client qualification data and home audit data on paper forms and re-entering that data in spreadsheets for analysis, they use laptops or other mobile devices that make it possible to minimize the trips to the home to the audit, the installation, and the final inspection.  Our clients report doubling and tripling the number of homes served by the elimination of paper and clipboards.  Most commercial EE programs rely entirely on spreadsheets and even paper based field audits.  By taking a program template approach to various types of small businesses, it becomes possible to leverage automated tools and streamline the audit/implementation/inspection process, saving time and reducing the cost of these small retrofit projects.

No-cost projects: By definition, the low-income homeowner pays nothing for the WAP energy efficiency improvements installed in their home.  So it should be also for the small business owner.  Now more than ever, small businesses are cash strapped.  This is likely the single largest barrier to participation in the SMB sector.  Providing a no upfront cost retrofit project that delivers reduced operational costs with lower energy bills will serve to incent even the most reticent business owner to participate.  Through a combination of incentives, on-bill financing, and performance-based contracting, the small business owner should see immediate benefit to their bottomline with their very next utility billing cycle.

If we are going to move beyond lighting only retrofits in our pursuit of energy efficiency in the SMB sector, we are going to need innovative ideas like these to bring together conservation measures for deeper energy savings.  Picking low hanging fruit leaves too many potential energy saving measures stranded for another time down the road.  Try creating a “kitchen table conversation” about energy savings with a small business owner the way a WAP agency does with a low income residential homeowner.  If we learn anything from the crisis of the global spreading of COVID-19, it should be that the time for kicking the can down the road is past.  Like this pandemic, the climate crisis requires immediate critical action to mitigate its devastating consequences.  We need not wait for political leadership.  As energy industry professionals, we should apply the same level of urgency we see in fighting this pathogen to innovating ideas for energy efficiency today, and success in the next decade meeting our carbon reduction goals.

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Matt Chester's picture
Matt Chester on Mar 24, 2020

This needs to be said-- EE light is so important, but sometimes it gives people license to think they 'achieved' efficiency and so they don't need to look into these additional power & money saving ideas!

Lily Li's picture
Thank Lily for the Post!
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