4. • A RMI 2025 seedling
goal is to cut the
consumption of major
energy consuming
products found in homes
and offices by 1/3.
• We aim to do this by
encouraging retailers to
drive energy efficiency by
pressuring suppliers to
product more efficient
products and promoting
energy efficient products
to customers
ONE OF OUR SEEDLING GOALS IS TO REDUCE
ENERGY CONSUMPTION OF CONSUMER PRODUCTS
4
6. PRODUCTS DRIVE ENERGY CONSUMPTION AND
GROWTH IN U.S. BUILDINGS
0
20
40
60
80
100
120
PrimaryEnergy(Quads)
2013 U.S. Energy
Consumption
Residential
Commercial
Industrial
Transportation
6
E
r
t
r
0
5
10
15
20
25
30
35
40
45
2013 Residential and
Commercial Energy
Consumption
Other Products
Cooking
Refrigeration
Water Heating
HVAC
Lighting
7. A LOT OF WORK IS UNDERWAY IN PRODUCT
EFFICIENCY BUT IT’S NOT ENOUGH
7
• Major voluntary specifications such as
ENERGY STAR are less aggressive
because manufacturers and trade
groups rightly view them as the first step
toward mandatory standards.
• The resulting process for developing
voluntary specifications can be highly
contentious, and can be a several year
process
• Updating standards typically happens on
a 5+ year cycle which is far too slow to
affect fast moving product classes such
as consumer electronics
• The result is a significant savings
opportunity is lost because many
voluntary specifications rapidly
become ineffective and mandatory
standards are weak.
Aggressive
Weak
Mandatory Voluntary
CA Title-20
Efficient products
opportunity
8. RMI CAN LEVERAGE RETAILER CLOUT TO
BOLSTER EXISTING EFFORTS
Lots of
suppliers and
manufacturers
Billions of
customers
Retailers already lean on suppliers to reduce cost and build
“sustainable” supply chains on behalf of their customers
Impact pinch
point
Product flow
8
10. THE AVERAGE HOME PROFILE TO UNDERSTAND WHICH
PRODUCTS TO TARGET
10
*Source: Residential Appliance Saturation Study (RASS), 2009
Average 2009 CA Single Family Home*
These are our products of focus because they have the highest
energy drain and saturation in the average household
Conv. Heat
Heat Pump Aux. Heat
Furnace Fan
Attic Ceiling Fan
Water Heater
Central Air
Room AC
Evap. Cooler
Spa Electric Heat
Spa
Dryer
Clothes Washer
Dishwasher
First Refrigerator
Second Refrigerator
Freezer
Outdoor Lighting
Range/Oven
TVMicrowave
Home Office
PC
Well Pump
Interior Lighting
Misc.
11. POTENTIAL ENERGY SAVINGS ARE SIGNIFICANT
11
Televisions
92% savings
Sources:
CA Single Family Home, RASS (2009)
Energy Star Office Equipment Calculator
Top Ten USA
PC Computers
93% savings
Refrigerators
54% savings
Energy savings from switching from what is found in a typical 2009 California
home to the most efficient on market generates significant savings...
0
100
200
300
400
500
600
700
800
900
CA Single
Family
Home
ENERGY
STAR
Top 10
kWh
0
100
200
300
400
500
600
700
800
900
CA Single
Family
Home
ENERGY
STAR
TOP10
kWh
0
100
200
300
400
500
600
700
800
900
CA Single
Family
Home
ENERGY
STAR
TOP10
kWh
12. POTENTIAL COST SAVINGS
12
Televisions PC Computers Refrigerators
$76 in savings per year $71 in savings per year $50 in savings per year
Sources:
CA Single Family Home, RASS (2009)
Energy Star Office Equipment Calculator
Top Ten USA
Assuming a retail power rate of 11.3 cents per kWh...
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
CA Single
Family
Home
ENERGY
STAR
Top 10
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
CA
Single
Family
Home
ENERGY
STAR
TOP10$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
CA Single
Family
Home
ENERGY
STAR
TOP10
13. THE COSTS OF MORE EFFICIENT PRODUCTS
ARE NOT MUCH GREATER THAN THE
CONVENTIONAL
13
Televisions
Average Price Price Difference Payback
Conventional $371 $79 1 year
Most Efficient $450
Computers
Average Price Price Difference Payback
Conventional $850 $26 Less than 1 year
Most Efficient $876
Refrigerators
Average Price Price Difference Payback
Conventional $814 $374 8 years
Most Efficient $1,188
The most efficient TV only costs $79 more than the conventional
14. -$300
-$200
-$100
$0
$100
$200
$300
$400
$500
$600
Refrigerators Clothes
Washers
Electric Water
Heaters
Gas Water
Heaters
Central AC Room AC Commercial
AC
Lighting
Ballasts
IncrementalPriceofEfficiency
($2011)
Comparing Predicted and Observed Price of Energy Efficiency
DOE Estimate Observed Price
THE REAL COST OF EFFICIENCY CAN BE
MINIMAL
14Source: Nadel, Steven and Andrew deLaski, Appliance Standards: Comparing Predicted and
Observed Prices, ACEEE, July 2013.
15. Product Why? U.S. Wide Energy
Savings
Number of avoided
Power Plants
Televisions 2nd greatest energy
consumption
92% energy savings
potential
271,372 GWh 90
Computers Greatest overall energy
consumption
93% energy savings
potential
116,454 GWh 39
Refrigerators 3rd greatest energy
consumption
54% energy savings
potential
183,902 GWh 61
TARGET PRODUCT RECOMMENDATIONS
15Source: : 2010 California Residential Appliance Saturation Survey
17. We want to work with a retailer with...
1. Size of Sales: How large is the retailer?
2. Commitment to Sustainability: How progressive is the retailer in sustainability
goals?
3. Selling Influence: How big are they in the space of selling this specific product?
4. RMI Connection: How well connected is RMI to this retailer?
WHY NARROW OUR SCOPE OF RETAILERS?
17
19. A retailer’s public commitment to sustainability and driving efficiency is an important
factor when considering a potential partnership.
COMMITMENT TO SUSTAINABILITY
19
Level of Commitment Ranking
No report, no stated goals 0
Published sustainability report 1
Published sustainability report and publicly
stated, time-oriented goals
2
Retailer Sustainability Goals
Best Buy 2
Hewlett Packard 1
Dell 2
Amazon.com 0
Walmart 2
Apple Computer retail stores 1
CDW Corporation 0
Staples 0
Target 2
GameStop 0
20. We want to also target retailers that sell the most of the target products we are interested
in.
SELLING INFLUENCE
20
Retailer Where most of revenue comes from Source Scoring
Best Buy
Mobile Devices, Consumer Electronics
(Including televisions)
Marketline, 2012
Best Buy Annual Report 2014
1
Hewlett Packard Personal computers and Printers HP Annual Report, 2013 1
Dell Personal computers Dell Annual Report, 2012 1
Amazon.com Digital content Amazon Annual Report, 2013 0
Walmart Grocery Walmart Annual Report, 2013 ?
Apple Computer retail
stores
Personal computers (hardware), mobile
devices (including tablets)
Apple Annual Report, 2013 1
CDW Corporation
Personal computers, mobile devices
(including tablets)
CDW Annual Report, 2013 1
Staples
Core office supplies, and business
technology (printers, ink, toner)
Staples Annual Report, 2013 0
Target Household essentials and electronics Target Annual Report, 2013 1
GameStop
New and pre-owned mobile devices (tablets,
phones, music players), new and pre-owned
video games and associated accessories
GameStop Annual Report, 2013 0
24. ACKNOWLEDGING THE DATA GAPS
24
Data Gaps
1. Granularity of product sales: What type television is sold the most?
2. Breakdown of retailer sales: Who is the biggest player in television sales? Who
sells the most of what?
3. Target specific individuals at specific companies: Who is the right person to
champion RMI involvement?
25. 1. Purchase reports to fill data gaps.
1. TWICE Top 100 Consumer Electronics Retailer Report (May 2014)
2. TWICE Top 100 Major Appliance Retailers Report (June 2014)
3. CEA Consumer Electronics Detailed Forecast 2013-2018 (July 2014 Edition)
RECOMMENDATIONS FOR NEXT STEPS
25
2. Build out specific data for targeted retailers.
26. RECOMMENDATIONS FOR NEXT STEPS
26
4. Develop partnerships in the product efficiency space
(NRDC, NEEA, ENERGY STAR, CLASP, ASAP, Green Technology Leadership)
5. Develop relationships with large retailers
6. Run efficient products campaign to connect leading retailers, innovative
manufacturers, and world-class design firms
27. Creating a clean, prosperous,
and secure energy future
Special thanks to Eric Wanless, Karen Crofton and Brendan Thompson!
Editor's Notes
Key takeaways:
Give RMI a better understanding of product efficiency
Introduce next steps for RMI to continue this project
Product efficiency is still a seedling project that still requires some further R&D. RMI goal is to cut the energy consumption of products found in homes by 1/3 by 2025. And we intend to do this by using retailers as the driving force for efficiency. The idea of this project is to get a sense of opportunities for RMI to fully engage in product efficiency and potential widespread benefits.
What are product loads? They are the energy loads from products that plug into an ordinary electrical outlet.
The energy consumption from these plug loads are increasing every year. <TRANSITION>
To give a sense of the potential, the commercial and residential sector make up 40% of the U.S. Energy consumption. The energy savings from switching to more efficient products are significant and remain largely untapped. If we were to cut into this consumption and switch to efficient products, we could make a huge impact.
Let’s dive a little deeper into the Commercial and Residential sector. Looking at the end use of these sectors, we see that a significant portion of energy used is being used for products! (Consumer products make up 35% of this consumption.)
But what are these products? They’re household appliances (fridges, stoves, coffeemakers), electronics (televisions, computers, gaming consoles)– anything that plugs into an outlet and demands energy. We’ll get a little deeper into what exactly these products are in a few minutes.
There’s a lot of work being done in product efficiency.
Ranges from Mandatory, Voluntary and Aggressive to Weak. ENERGYSTAR is leading in the U.S. to promote the top 25%, but it’s not enough!
-It’s not aggressive and fast as it needs to be to catch up with the fast-refreshing product cycles of computers, phones (Think about how often a new model of an iPhone or tablet comes out?) and many other consumer electronics. As a result, it’s not as effective as we need it to be to make a strong impact.
-So, therefore, we have to look beyond ENERGYSTAR and other labels/mandates to find the most efficient products.
So I talked about why should we care about products, but why should we care about retailers?
There’s millions of suppliers funneling into a relatively small amount of retailers, which in turn flows to billions of customers. This “pinch point” is where we want to be to make an impact.
Next, I want to dive a little deeper into these products. As you can imagine, there’s a vast amount of products we could focus on.
So why are we narrowing our scope of products?
Savings potential vary across different products
Consumer electronics have the large savings potential
The technology for efficient consumer electronics already exists!
We want to target specific products with large energy consumption footprints
We first looked to data that could provide us with some insight into the average CA home. This was taken from a 2009 RASS Survey (caveat, it is *not* the most up-to-date information). This data gave us the average unit electricity consumption (UEC) from each type of product AND the percent of saturation in peoples’ homes. With that information, we were able to determine that PCs, TVs and Refrigerators should be our target products.
Two points:
Why are we ignoring the interior lighting category, which makes up 19% of energy consumption?
A lot of work and progress has already been made in the space of efficient lighting. We want to focus more directly on something new.
2) Why are we ignoring the “Misc” category (11%)?
We would prefer to focus on specific products with a large energy consumption rather than many small products that make up the “Misc” category.
So what is in the Misc category? Many random things. Electronics chargers, portable fans, ceiling fans, household air cleaners, water purificatiion systems, electric blankets, aquariums
Let’s look at the potential energy savings from these products.
First, in a 2009 CA single family home, they were using televisions that used more than 700 kWh per year. According to EnergyStar, the “conventional” television uses about 130 kWh/year. And if you look at the EnergyStar television, it uses just as much energy as a conventional television! Compare this to a “Top10” television. Top10 is a nonprofit organization that tests and evaluates different products to find the top 10 most efficient products, such as televisions, computers, computer monitors, lights, etc. I took the average of the Top10’s list of products for televisions and found this huge energy savings gap from switching from what a typical CA home was using in 2009 to a Top10 product. Not only is this true for televisions, this is also true for PC computers and refrigerators.
So what does this mean for the average customer looking to save money?
This could mean that average CA single family home could save $76 per year per television, and $71 in annual savings per computer, and $50 annual savings per refrigerator.
For most people, they are hesitant to seek out the most efficient product because the common belief is that they are more expensive than the conventional.
I wanted to explore this, so:
Televisions:
-Data was taken from looking at MSRP prices
-For TVs, I aggregated costs for 32”-36” televisions (2009 RASS Data stated that was the average size of TVs in homes). So looking at conventional, non-ENERGYSTAR certified, non-Top10 listed televisions and ignoring the fact that some TVs cost more due to different features such as Wifi-enabled features, etc., this is the average cost of a conventional television. Compared to the average cost of a Top10 television (the most efficient), this is the price difference. The most efficient television costs about $79 more than the conventional. The lifetime of a TV is about 6 years (ENERGYSTAR data), so this would not pay itself back in its lifetime.
Computers: According to an ECOVA study, they found that you can make computers 30% more efficient cost effectively. This means that the value of energy savings over the lifetime of the computer (4 years?), is greater than any additional cost from the more efficient computer.
Refrigerators: The most efficient fridge would cost $374 more than the conventional. With the savings of about $30 year from a conventional refridgerator, this would pay itself back within the lifetime of a fridge (12 years).
There is a caveat here: We can’t be sure that the these cost differences are driven by efficiency. Could be driven by aesthetic things like color or style. So further research is needed to understand what is driving these cost differences.
Final recommendations for target products. Why? We’re considering the impact of the unit energy consumption of each product and the massive savings potential in peoples’ homes. This is an estimate of the residential benefits: but if we switch out all the televisions in the U.S. To the most efficient, we could realize 277 GWh worth of savings, and 15,200 GWh worth of savings in computers. To put it in perspective, this is the amount of power plants that could be avoided...
However, we want to only focus on televisions and computers.
A lot of historical work for refrigerators to make them more efficient has already been done
Consumer electronics (televisions + computers) have a fast refreshing product cycle that is hard for mandates and labels to keep up with
Break up into 4 slides:
Industry influence: Graph of sales
Sustainability Goals: Table of rankings
Selling influence:
criteria was measured by their consumer electronics sales.
Retailers were filtered by Top retailers in consumer electronics sales before considering the other criteria. This is because we want to target the retailers with the most biggest influence to drive change.
Retailers were ranked based on 1) Which products make up the most of their U.S. Sales revenue, and 2) Whether that product aligns with our target products
The ranking was binary: 0=No, 1=Yes
So, for Best Buy, they stated in their annual report that phones make up 45% of their revenue, and consumer electronics make up 32%. Unfortunately, not all companies broke this down in their annual report, and some just simply stated what was their main revenue source (e.g., they simply stated it was personal computers). So these rankings are somewhat subjective based on my judgment. Back to Best Buy, they were assigned a 1, since the consumer electronics (televisions!) were one of our target products.
Caveat: This is not the whole story. Grocery makes up 55% of Walmart’s revenue, but they still a whole lot of electronics. Although a small %, it still makes up a huge amount of electronics compared to these other smaller retailers.
RMI Connection: Looking into Salesforce and known relationships to RMI. This would make it easier to form partnerships on projects.
To identify specific contact, need senior leadership to fill in.
Final recommendation: Work with Target and Best Buy with televisions and computers.
What are the big gaps?
Granularity on product sales: This is important to fine tune details of savings for types of computers, televisions and other products. If we knew what type of TV (brand, size) is sold the most, then we can more confidently calculate the real savings from switching to the most efficient product available. So right now, knowing the energy consumption of the most SOLD TV is a huge gap. We currently know the energy consumption for the most available TV, but that is not necessarily the most widely sold and used TV.
Who sells the most of what?: This is important and much needed to identify the biggest players in specific product sales, and so we can more sharply target which retailers to work with. Unfortunately, much of this information is locked up in expensive consumer reports.
How to fill these gaps?
Purchase reports:
Costs of reports: TWICE $400, 500
CEA:
Build out specific data for our targeted retailers, Best Buy & Target
Get information on their revenue and sales by products
This would allow us to see widespread (national, international) potential benefits in terms of energy and cost savings by promoting efficient products in peoples’ homes that Best Buy or Target sells to.
4. RMI has relatively little social capital in the product efficiency space. Building a strong relationship with others enable the impact we’re seeking and help RMI become recognized as a leading player in this space.
5. Demonstrating the value of product efficiency to retailers empower them to pursue efficiency in their own facilities and to drive efficiency towards their customers and their brand.
