Transform Your Small Business EE Retrofit Program

In this article I will share how a handful of forward-thinking utilities are leveraging a mobile energy audit tool to transform their aging small commercial EE programs into programs that offer pay for performance energy efficiency retrofit projects yielding deep carbon reduction benefits.

Our planet can’t afford our continuing glacial pace of carbon reduction.  We can no longer be content nibbling around the edges of energy efficiency efforts in the small and mid-sized (SMB) commercial building sector.  Energy efficiency could slash US energy use and greenhouse gas emissions by about 50% by 2050, bringing us halfway to our national climate goals.  Small commercial buildings - defined as those with monthly demand below 200kW - represent 47% of a typical utility’s demand but have proven difficult for energy efficiency retrofit programs to reach.  Despite a variety of efforts, utilities see less than 1% annual participation on average in their EE programs by small businesses.  

Owners of small commercial buildings are put off by the high upfront costs of utility efficiency engineering programs that return only modest savings. Where those programs have succeeded, they have done so by relying on lighting measures to overcome the high cost-per-unit of SMB energy saved by retrofits. Other important but more technically daunting measures have been left stranded. To boost participation, EE 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 go beyond lighting retrofits for deeper benefit in buildings with relatively small energy savings? And how do we make that a financially viable prospect for small business owners? Hancock Software is working on the answers with four forward-thinking utilities that are transforming their small commercial energy efficiency programs by using an advanced mobile energy audit tool to scope EE projects that deliver deep, multi-measure, financeable energy savings.

Energy Efficiency as a Service

A March 2022 ACEEE article describes energy efficiency as a service (EEaaS) as a valuable tool in which the upfront costs of energy efficiency upgrades are financed by the savings they ultimately realize.  ESCOs have long profited from providing pay for performance EE retrofits for their large commercial customers.  As states adopt more aggressive carbon reduction targets, some utilities are now administering their own EEaaS programs to help meet their energy efficiency and GHG reduction mandates.  The benefits for a customer entering an EEaaS arrangement include:

• Zero upfront costs
• Quick energy and operational savings
• Ability to bundle short-payback measures (e.g., LED lighting) with longer-payback measures (e.g., building envelope) and still meet minimum payback for a bundled set of comprehensive upgrades
• Transferring performance risk of energy upgrades
• Faster project delivery
• Improved operational performance
• Wide range of improvements; more comprehensive retrofits for deeper savings
• Non-energy benefits (e.g., improved indoor air quality)

(*See Henner, N., and B. Howard. 2022. Utilities and Energy Efficiency as a Service: The Potential for Win-Win Partnerships. Washington, DC: American Council for an Energy-Efficient Economy. https://www.aceee.org/research-report/u2203.)

Before now, the engineering effort required to prove enough energy savings to guarantee front loadable costs has meant this approach has only been worthwhile for larger projects. 

Mobile Energy Audit Tool

Utilities have long used mobile technology for residential weatherization efforts; staff routinely audit for recommended energy efficiency measures and perform savings analysis in the same visit.  Until now, the mobile applications deployed for commercial EE retrofits have been too generic to identify specific savings benefits accurately or reliably enough to secure financing.   As a result, auditors must collect site data manually using paper and clipboard, return it to the office and transpose it into a variety of models and spreadsheet tools in order to generate enough engineering data for a financeable custom proposal.  Then return weeks later to attempt to reengage with a business owner who, frankly, has many other more important issues affecting their immediate cash flow than saving a few dollars on their energy bills.

A utility on the West Coast now provides MINT, the mobile energy audit tool from Hancock Software, to commercial energy service providers to deliver that same automated residential EE program experience to small business owners.  MINT uses local Technical Reference Manual (TRM) analysis to aggregate savings across a number of measures tailored for that specific site. By combining National Energy Improvement Fund (NEIF) financing with existing measure incentives, the entire project is proposed right there onsite, instantly demonstrating a guaranteed cash flow positive opportunity for the business owner.

Streamlined Project Implementation

Streamlining the administration of energy efficiency retrofit projects continues when results from the auditors’ mobile devices - complete with photos and required signatures - are synced with Hancock Software’s cloud-based program management system. The system automatically generates work orders for installation contractors, who use the same mobile app in Installation Mode to confirm completion of the recommended measures, along with taking photos of final work and making notes of any discrepancies.  Savings analysis is then automatically recalculated based on this updated installation data.  Inspectors use the mobile app as well in Inspection mode for the final inspection audit.  The same project data is available to all project stakeholders in real time, all the time, eliminating much of the costly reporting now required for tracking project status and applying for incentives.  Utility program management has a full view of the entire program funnel, with the ability to drill down for specific job details.

Conclusion

In order to move beyond lighting-only retrofits in our pursuit of energy efficiency in the small commercial sector, we need innovative ideas and tools like these to enable more effective conservation measures for deeper energy savings.  Picking only the low-hanging fruit leaves too many potential energy saving measures stranded for another time that rarely arrives.  Collecting site data on a clipboard or even an offline spreadsheet wastes expensive engineering time re-entering that same data in disconnected modeling tools back in the office and also fails to maintain the engagement of a preoccupied small business owner.  Forward thinking utilities are providing mobile technology to empower onsite staff with a “kitchen table conversation” about financeable energy savings with a small business owner the same way a residential weatherization agency does with an income eligible homeowner. 

If we learn anything from the global crisis of the spread of COVID-19, it should be that we cannot assume we have the time to kick the can down the road.  Like this pandemic, the climate crisis requires immediate, critically effective action to mitigate its devastating consequences.  We in the utility industry need not wait for political leadership.  As energy industry professionals, we should apply the same level of urgency we see in fighting this pandemic to innovating ideas for energy efficiency today, and success in the next decade in meeting our carbon reduction goals.