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Big Opportunities for Small Business:
Successful Practices of Utility Small
Commercial Energy Efficiency Programs
MadCity BECCsters
SeventhWave
Madison, Wisconsin
January 5, 2017
2
aceee.org
@ACEEEdc
The American Council for an Energy-Efficient Economy is a nonprofit
501(c)(3) founded in 1980. We act as a catalyst to advance energy
efficiency policies, programs, technologies, investments, & behaviors.
Our research explores economic impacts, financing options, behavior
changes, program design, utility work, international needs as well as US
national, state, & local policy.
Our work is made possible by foundation funding, contracts, government
grants, and conference revenue.
Key points --
• Small business diversity hard to reach
• Programs now: prescriptive lighting
• Many great opportunities remain to expand
participation, service, demand and energy
savings
• Successful practices are customer-centered
and customized
3
Small business program
design is like the video
game Tetris:
getting multiple, moving,
differently-shaped puzzle
pieces to fit into varying
arrangements. . . which
keep changing as the game
proceeds.
4
Why hard to reach?
1. Barriers to customer participation
• Small organization size (no energy staff)
• Time and money constraints
• Lack of awareness
• Split incentives. “landlord-tenant problem”
• Relatively small energy bills, and relatively
small dollar saving potential
• Perceived business disruption potential
5
Why hard to reach?
2. Utility-side challenges to design
programs to address diversity
• Diverse customer segment. Not only
small commercial, but better labelled
“small non-residential” – includes small
industrial, non-profits, schools, churches
• Diverse energy demand, use patterns
• Geographically dispersed premises
6
Less than 10% of small businesses participate
Small business
1 DNV-GL. 2012 C&I Customer Profile Final Report. Sept 23 2014.
http://ma-eeac.org/wordpress/wp-content/uploads/CI-Year-2012-Customer-Profile-Final-Report.pdf
7
How have utilities responded?
Efficient lighting
measures.
• Some small biz
programs ONLY
lighting.
• Even among programs
with other measures,
90% savings from
lighting
Streamlined
programs.
• Fast, simple,
convenient, with set
incentives or free
installation
• Often “direct install”
(energy assessment
and measure
installation in one visit.)
8
Successful practices for broader
participation and deeper savings
1.Segment the market.
2.Offer a wide set of eligible measures.
3.Tailor and target marketing and
communications to customer needs.
4.Provide dedicated project process managers.
5.Establish partnerships
6.Offer zero-interest or low-interest financing
.
9
Segment the market.
Consumers Energy Michigan 2014 Thermostat initiative
• Segmented by fuel and geography (gas-only and combination gas-
electric service areas).
• Programmable thermostats and other measures installed by
implementation contractor teams along specified routes.
Installed 16,181 lighting measures and 10,728 non-
lighting measures. Cost effective both gas and electric.
Image from Franklin Energy http://expert.franklinenergy.com/smallbusiensssegmentation10
Offer a wide set of eligible
measures.
Refrigeration
• LED display case lights
• evaporator fan controls
• anti-sweat controls
• night covers
• strip curtains
• door gaskets
• door closers
11
Tailor and target marketing and
communications to customer needs.
“Neighborhood blitz” approaches have succeeded using
door-to-door and word-of-mouth efforts.
Example: Puget Sound Energy
677 businesses surveyed
622 projects completed
84% conversion rate
12
Provide dedicated project process
managers.
Small business usually do not have facility managers with energy
expertise on staff – don’t know what efficiency they’re missing
Example: Your Energy Manager (YEM) program, an initiative of East
Bay Energy Watch, a partnership between Pacific Gas and Electric
and Alameda and Contra Costa Counties in the San Francisco Bay
Area
• Provided energy end use analysis with benchmarking using
Energy Star Portfolio Manager
• Trained energy champions at the business to ensure continued
improvement in energy savings
13
Establish partnerships.
Ann Arbor, Michigan, Downtown Energy Saving
Grant Program, Ann Arbor Downtown
Development Authority (DDA).
• Free energy audits and rebates for energy
efficiency upgrades.
• 100% of participants participated in DTE
Energy rebate programs
14
Offer financing to encourage comprehensive
retrofits and deeper savings.
Address the up-front
cost barrier and provide
needed project funds
by offering loans to
program participants.
15
Structural Challenges
Natural gas savings
• Higher first cost barrier
• Multiple utilities
• Multiple trade allies, contractors
Tenant-landlord problem/split incentives
• How can utility EE programs encourage green
leases, energy efficiency leases?
• Should they?
Resources
For more information, examples, and references, see the report that
this presentation was from on the ACEEE website:
Big Opportunities for Small Business: Successful
Practices of Utility Small Commercial Energy
Efficiency Programs
http://aceee.org/research-report/u1607
17
The top convener in energy efficiency. aceee.org/conferences
Upcoming ACEEE Conferences
Hot Water Forum February 26 Portland, OR
National Symposium on Market Transformation April 2 Arlington, VA
Energy Efficiency Finance Forum May 21 Chicago
Seth Nowak: snowak@aceee.org
608-354-1329
Q&A and Discussion

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Successful Small Business Energy Efficiency Program Practices

  • 1. Big Opportunities for Small Business: Successful Practices of Utility Small Commercial Energy Efficiency Programs MadCity BECCsters SeventhWave Madison, Wisconsin January 5, 2017
  • 2. 2 aceee.org @ACEEEdc The American Council for an Energy-Efficient Economy is a nonprofit 501(c)(3) founded in 1980. We act as a catalyst to advance energy efficiency policies, programs, technologies, investments, & behaviors. Our research explores economic impacts, financing options, behavior changes, program design, utility work, international needs as well as US national, state, & local policy. Our work is made possible by foundation funding, contracts, government grants, and conference revenue.
  • 3. Key points -- • Small business diversity hard to reach • Programs now: prescriptive lighting • Many great opportunities remain to expand participation, service, demand and energy savings • Successful practices are customer-centered and customized 3
  • 4. Small business program design is like the video game Tetris: getting multiple, moving, differently-shaped puzzle pieces to fit into varying arrangements. . . which keep changing as the game proceeds. 4
  • 5. Why hard to reach? 1. Barriers to customer participation • Small organization size (no energy staff) • Time and money constraints • Lack of awareness • Split incentives. “landlord-tenant problem” • Relatively small energy bills, and relatively small dollar saving potential • Perceived business disruption potential 5
  • 6. Why hard to reach? 2. Utility-side challenges to design programs to address diversity • Diverse customer segment. Not only small commercial, but better labelled “small non-residential” – includes small industrial, non-profits, schools, churches • Diverse energy demand, use patterns • Geographically dispersed premises 6
  • 7. Less than 10% of small businesses participate Small business 1 DNV-GL. 2012 C&I Customer Profile Final Report. Sept 23 2014. http://ma-eeac.org/wordpress/wp-content/uploads/CI-Year-2012-Customer-Profile-Final-Report.pdf 7
  • 8. How have utilities responded? Efficient lighting measures. • Some small biz programs ONLY lighting. • Even among programs with other measures, 90% savings from lighting Streamlined programs. • Fast, simple, convenient, with set incentives or free installation • Often “direct install” (energy assessment and measure installation in one visit.) 8
  • 9. Successful practices for broader participation and deeper savings 1.Segment the market. 2.Offer a wide set of eligible measures. 3.Tailor and target marketing and communications to customer needs. 4.Provide dedicated project process managers. 5.Establish partnerships 6.Offer zero-interest or low-interest financing . 9
  • 10. Segment the market. Consumers Energy Michigan 2014 Thermostat initiative • Segmented by fuel and geography (gas-only and combination gas- electric service areas). • Programmable thermostats and other measures installed by implementation contractor teams along specified routes. Installed 16,181 lighting measures and 10,728 non- lighting measures. Cost effective both gas and electric. Image from Franklin Energy http://expert.franklinenergy.com/smallbusiensssegmentation10
  • 11. Offer a wide set of eligible measures. Refrigeration • LED display case lights • evaporator fan controls • anti-sweat controls • night covers • strip curtains • door gaskets • door closers 11
  • 12. Tailor and target marketing and communications to customer needs. “Neighborhood blitz” approaches have succeeded using door-to-door and word-of-mouth efforts. Example: Puget Sound Energy 677 businesses surveyed 622 projects completed 84% conversion rate 12
  • 13. Provide dedicated project process managers. Small business usually do not have facility managers with energy expertise on staff – don’t know what efficiency they’re missing Example: Your Energy Manager (YEM) program, an initiative of East Bay Energy Watch, a partnership between Pacific Gas and Electric and Alameda and Contra Costa Counties in the San Francisco Bay Area • Provided energy end use analysis with benchmarking using Energy Star Portfolio Manager • Trained energy champions at the business to ensure continued improvement in energy savings 13
  • 14. Establish partnerships. Ann Arbor, Michigan, Downtown Energy Saving Grant Program, Ann Arbor Downtown Development Authority (DDA). • Free energy audits and rebates for energy efficiency upgrades. • 100% of participants participated in DTE Energy rebate programs 14
  • 15. Offer financing to encourage comprehensive retrofits and deeper savings. Address the up-front cost barrier and provide needed project funds by offering loans to program participants. 15
  • 16. Structural Challenges Natural gas savings • Higher first cost barrier • Multiple utilities • Multiple trade allies, contractors Tenant-landlord problem/split incentives • How can utility EE programs encourage green leases, energy efficiency leases? • Should they?
  • 17. Resources For more information, examples, and references, see the report that this presentation was from on the ACEEE website: Big Opportunities for Small Business: Successful Practices of Utility Small Commercial Energy Efficiency Programs http://aceee.org/research-report/u1607 17
  • 18. The top convener in energy efficiency. aceee.org/conferences Upcoming ACEEE Conferences Hot Water Forum February 26 Portland, OR National Symposium on Market Transformation April 2 Arlington, VA Energy Efficiency Finance Forum May 21 Chicago Seth Nowak: snowak@aceee.org 608-354-1329 Q&A and Discussion