Customer needs point way to utilities’ future

In a serendipitous case of cyber call and response, an energy industry blog recently posed a question that should be nagging all power providers, and another offered an answer that could give utilities hope.

At the Solar Electric Power Association’s Utility Solar Conference in May, Energy Efficiency Consultant Suzanne Shelton posted an essay titled “So why do I need my utility, exactly?”Redirecting to a non-government site Discussions among conference attendees about how best to build, integrate and price solar power seemed to leave the customer’s wishes entirely out of the equation. Coming on the heels of SolarCity/Tesla unveiling its Powerwall battery storage system, that approach struck Shelton as dangerously short-sighted. She conjectured that solar panel/battery storage combinations could become efficient and affordable enough in as little as five years to lead utility customers to ask themselves the question of her title.

Just two weeks later, “Listening for what matters to residential utility customers” Redirecting to a non-government site appeared in Intelligent Utility. The article focused on motivating customers to make energy-efficiency upgrades, but its underlying theme applies equally to the threat of grid defection. To get a customer to replace an inefficient furnace or stay connected to the grid, you must listen to their concerns and offer solutions that address their needs.

Doing business in brave new world
Broadcast television and landline phones tied to homes and offices were once life-changing services that quickly became viewed as necessities. For the most part, people were satisfied with those services and trusted the few—sometimes, sole—providers. Although utilities still enjoy that kind of marketplace (for now), consumers live in a world that offers myriad options and custom plans for other services, and they are starting to cast a skeptical eye toward their power providers.

A Shelton Group study found that 55 percent of consumers are less than satisfied with their utility, and would be open to other options. Tesla is only one of the private companies working on creating those options, and there are plenty of innovators in the energy-efficiency sector, too. It would take only a couple of breakthroughs to turn the much-discussed “utility death spiral” from a distant cloud on the horizon to a looming thunderhead.

The good news is that utilities still have time to get in front of the change curve. Both articles were optimistic about the new business opportunities awaiting utilities that are ready to look beyond the status quo of selling kilowatt-hours (kWh).

New model built on listening
Instead of seeing new technologies that save or generate energy as competition, utilities might consider how these systems meet customers’ specific needs. The IntelligentUtility article offers insight on how to talk to residential customers about saving energy, drawn from a poll by energy and sustainability marketing firm KSVRedirecting to a non-government site Researchers found that different demographics have different motives for making home improvements, a point Shelton frequently makes. Whether it is saving money, controlling home systems, freedom from time-of-use rates or something else, the utility of the future may be one that designs and markets customized equipment and service packages that speak to customers’ values.

All the points in the article are worth taking time to read, but Point 5, where researchers asked people where they get advice on home improvements, has particular resonance. Only 1 percent turned to their electric utility company, and this is where Shelton sees the greatest opportunity.

Despite sometimes bumpy relations with their power providers, people are still confident that when they flip the switch, the light will come on and when they open the refrigerator, the food will be cold. She suggests that by combining their established reputation for reliability with a new menu of customized products and programs, utilities will be able to keep customers even when leaving the grid becomes easier.

According to KSV, listening for what matters among utility customers is the best way to figure out how to connect homeowners with the right messages to get them to make efficiency upgrades. It is also the key to building the trust necessary to long-term customer loyalty, something no technology can duplicate or replace.

Source: Shelton Insights, 5/5/15; IntelligentUtility, 5/18/15

Finding, cultivating qualified retrofit contractors getting easier

Editor’s note: This is the second story in a series on overcoming barriers to customers implementing energy-efficiency improvements.

The key to successful energy-efficiency upgrades—and, therefore, to happy customers—is proper equipment selection, installation and user orientation, if needed. All of which require a qualified contractor who is committed to saving customers energy. While finding enough such vendors to support an energy-efficiency program continues to be a challenge, utilities now have more resources to help them cultivate trade allies.

As with project financing [link to story re-posted on Breaking News], the strategy a utility uses to develop a contractor pool depends on specific factors—the size and population of the service territory, local regulations, the measures a utility chooses to promote. No one size fits all (yes, that phrase again), but the number of utility program models is growing, along with educational programs to train the next generation of contractors.

Utility examples

Many utility programs require customers to hire contractors from a list of preferred vendors, though the qualifications for being included on the list vary greatly. Contractors doing work for Midwest Energy’s How$mart program must simply sign an agreement to install the utility-prescribed measures according to local building code. Fort Collins Utilities’ Home Efficiency Program requires contractors to attend orientation and specialized training, maintain Better Business Bureau accreditation and meet certain insurance requirements. Utilities generally contract with a third-party business or nonprofit organization to provide training.

Where there is a large and diverse labor pool, utilities may allow customers to hire their own contractors to install prescribed measures, but follow up with an inspection by a certified provider. That’s how Platte River Power Authority on Colorado’s Front Range operates its Building Tune-up program for commercial buildings. An approved retrocommissioning service provider identifies ways to improve a building’s efficiency and oversees the projects implemented by contractors the customer chooses.

Platte River takes this approach because retrocommissioning is a specific skill, but post-installation inspections also provide quality assurance—an important step in successful energy-efficiency projects. A knowledgeable utility employee or another third-party energy services professional may perform the inspection. 

Growing the skills

Even in a metropolitan area, however, energy services experts and contractors experienced in energy-efficiency measures don’t grow on trees. That is slowly changing, thanks to programs emerging around the country to train and certify contractors in energy-efficient building practices.

Volunteers participating in the Community Energy Exchange mentoring event at Easter Seals Rocky Mountain Village in Empire, Colo., prepare to do a blower door test on a camp cabin. The event taught basic energy auditing and weatherization skills while improving the efficiency and safety of camp buildings. (Photo by Community Energy Exchange)

Nonprofit organizations like Affordable Comfort Inc. (ACI) and Electric & Gas Industries Association (EGIA) offer a full menu of webinars and workshops highlighting best practices in the home performance industry. They work with the Building Performance Institute (BPI), the nation’s standards setting and credentialing organization for energy efficiency retrofit work, to raise the bar in home performance contracting.
Regional, state and local groups often team up with these national organizations to put on training and networking events in their own territories. Partnering offers local businesses, utilities and educators a way to increase their reach and resources while addressing the issues specific to their own situation.

Community colleges, with their focus on job readiness, are finding a niche with “green building” programs. Given California’s leadership in energy efficiency, it is not surprising that Los Angeles Community College boasts a cutting-edge sustainable building program. Red Rocks Community College in Lakewood, Colo., is building a green collar workforce with degree and certificate programs across a range of sustainability disciplines. Even in Utah, where energy prices are relatively low, Salt Lake City Community College’s Green Academy offers a lengthy list of certificates in renewable energy and energy-efficiency technologies.

On the private side, Everblue Training Institute, a nationwide continuing education institute, partners with BPI, Energy Star, the U.S. Green Building Council and several universities to advance green building skills. Colorado-based Lightly Treading targets both consumers and contractors, offering energy services to the former and training and exam proctoring for BPI certification  to the latter. This two-pronged approach is one way to make sure that you have qualified contractors to meet your customers’ needs.

Local nonprofit organizations are another avenue for developing the building performance workforce. Sustainable Ideas has partnered with many of the industry associations, schools and businesses noted above to design mentoring and training programs, and do some good in the community in the process. Through its Community Energy Exchange, auditors and contractors have sharpened their skills on projects that improve safety and energy efficiency in low-income housing and nonprofit facilities.

But first, demand

Of course, contractors won’t sign up for training unless they see a consumer demand for energy efficiency. That requires nothing short of market transformation, a seemingly glacial process. The American Recovery and Reinvestment Act moved the ball forward by funding state and local programs that raised consumer awareness about energy-efficiency measures, and created a demand for contractors to install them.

Energy Upgrade California is one of those stimulus-funded programs. Local governments, municipalities and utilities created an umbrella initiative to help homeowners make energy-saving improvements, and to give local contractors the opportunity to learn new skills. All contractors participating in Energy Upgrade must complete mandatory orientation session workshops and hold a Whole-House Home Energy Rating System Certification. Over the year that the program has been in operation, 507 contractors have fulfilled the requirements to become Energy Upgrade vendors.

The Home Energy Makeover Contest is a good tool for raising both consumer and contractor awareness by showing how energy retrofits create a positive cash flow. Winning homes are selected for their potential to show how efficiency upgrades can reduce energy consumption. Delta-Montrose Electric Association in Colorado pioneered the promotion, and BPI now sponsors contests with utilities around the country. The contests have helped to increase awareness of home performance assessment and retrofit services, which in turn contributes to more people earning BPI certification—currently at about 22,000 individuals.

Before the contest takes place, BPI recommends that sponsors conduct contractor outreach and training. Contractor networking events like the Rocky Mountain Contractor Exchange might be held as a precursor to a makeover contest, or presented as an annual regional event to build interest and momentum.

No standard certification

The last piece of the puzzle is developing nationally recognized professional certifications, so customers can make informed decisions when hiring contractors—a challenge that won’t disappear any time soon.

More than 100 organizations nationwide are working with the home performance industry to establish guidelines for quality work, effective training and professional certifications. Unfortunately, like building codes, every jurisdiction has its own unique needs and its own ideas about what is important. Expect this challenge to be with the industry for some time to come.

That being said, utilities that have, or want to launch, a retrofit program should get to know what kind of skills exist in the local contractor pool and start building a network. The resources in this story only scratch the surface so there is no need to wait to reap the benefits energy-efficiency upgrades offer customers, power providers, the economy and the environment. 

ACEEE report finds energy-efficiency upgrades a win-win for apartment owners, tenants

 Engaging as Partners in Energy Efficiency: Multifamily Housing and Utilities, a new report from the American Council for an Energy-Efficient Economy (ACEEE), demonstrates that energy use in multifamily buildings could be cut significantly to save building owners and residents as much as $3.4 billion nationwide . Cost-effective energy-efficiency upgrades in buildings with five or more residential units could also reduce utility costs for those buildings by 15 to 30 percent.

Energy-efficiency upgrades improve the bottom line for multifamily building owners and improve comfort for occupants. Such building improvements also help to maintain the value of affordable housing and decrease financial risk for lending institutions. However, building owners face the usual barriers to implementing retrofits: difficulty finding technical assistance, financing, or qualified contractors.

According to the report, better coordination between apartment building owners and energy utilities is the key to unlocking the savings. The study produced by CNT Energy for ACEEE finds that there is a largely untapped opportunity for utilities to engage the multifamily sector with energy-efficiency programs tailored to those customers’ needs.

Anne McKibbin, CNT Energy policy director and coauthor of the report, stated that partnering with utilities is central to the process. “Building owners and other housing industry players need to work with their utilities, engaging them directly and in local and state regulatory proceedings,” she said.

ACEEE senior policy analyst Eric Mackres concurred with McKibbin about the crucial role utilities play, while acknowledging that there is no one-size-fits-all solution. He added that the report outlines a variety of strategies that can help the multifamily housing sector to engage electric and natural gas utilities. 

You can download Engaging as Partners in Energy Efficiency: Multifamily Housing and Utilities from ACEEE with free registration. Learn more about the report by joining the webinar, Engaging as Partners in Energy Efficiency, Feb. 13 at 1 p.m. CST. Call 773-269-4037 for more information.