yoUtilBill - A Fresh Look At Residential Energy Efficiency

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yoUtilBill - A Fresh Look At Residential Energy Efficiency

  1. 1. GET YOUR ENERGY BILL DOWN! A Fresh Look at Residential Energy Efficiency February 2010 Private & Confidential
  2. 2. Government recognizes the energy reduction imperative Example: Sonoma County’s ‘Climate Action Plan’ Goal is to reduce greenhouse gas (GHG) emissions 25 percent below 1990 levels by 2015 • All nine Sonoma cities and the County established this goal in 2005 Over 90 percent of electricity and natural gas is used by the County’s approximately 200,000 homes & 30,000 businesses Action plan is for an aggressive efficiency retrofit program – 80% adoption rate 150,000 residential accounts 20,000 commercial accounts Source: McKinsey & Company, yoUtilBill 1 confidential – yoUtilBill llc 2009© - all rights reserved
  3. 3. Of course, less consumption lowers emissions; residences are key Emissions in United States By 2020, the residential sector will consume 29% of energy in U.S. • Growth of 0.4% driven by population growth, larger homes, and more electrical devices in homes Residential Transportation Buildings (21%) (32%) Over 28% of energy could be saved with positive economic returns • Energy Savings: If enacted all positive Other NPV changes, could save $41Bn a year Buildings and 360 million tons of CO2 emissions (22%) Industrial • Upfront Investment: $229 Bn incremental (25%) which leads to overall NPV savings of $395 Bn Total in California – 492 Millions Tons of Carbon Emissions The U.S. average annual residential energy bill is $2,000, but it could be $1,200 Source: California Energy Commission, The Economist, yoUtilBill 2 confidential – yoUtilBill llc 2009© - all rights reserved
  4. 4. And efficiency is comparatively cost effective Cost of Cutting Carbon By Opportunity Source: Wall Street Journal, McKinsey & Company 3 confidential – yoUtilBill llc 2009© - all rights reserved
  5. 5. After 30 years, why not more progress?? Even homes built after 1978 have poor energy efficiency • Most homes still have little insulation, low performance windows, leaky duct systems, and inefficient HVAC units • This is despite huge government spending on energy conservation awareness and direct subsidies and grants – and mandates! The answer; good citizenship is a good goal – but homeowner pocket book and market forces are the real motivators • Most citizens espouse responsible ethics and wishful conservation intentions • But the real driver of most homeowner actions is inspired by homeowner economics • BUT NO MARKET-BASED APPROACHES HAVE BEEN DEPLOYED TO DATE TO ALTER CONSUMPTION PATTERNS Source: California Energy Commission, yoUtilBill 4 confidential – yoUtilBill llc 2009© - all rights reserved
  6. 6. Problem: Bills are rising, but home prices are down; everyone focused on bottom line PG&E Electricity Prices Greater Bay Area Home Prices Price Dollars per kWh $0.45 $0.40 $0.35 $0.30 Base $0.25 101-130% 131-200% $0.20 201-300% >300% $0.15 $0.10 $0.05 $0.00 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Source: PG&E, yoUtilBill 5 confidential – yoUtilBill llc 2009© - all rights reserved
  7. 7. Problem: Most homeowners have no idea on home energy consumption economics How should homeowners prioritize energy efficiency actions? Inadequate insulation in attic & walls Leaky ducts Inefficient light bulbs Lack of programmable thermostat Plug load from small appliances Inefficient kitchen appliances Inefficient washer & dryer Inefficient furnaces & water heaters Source: yoUtilBill 6 confidential – yoUtilBill llc 2009© - all rights reserved
  8. 8. Problem: The economics are complex Calculating the Economics • Evaluate your current energy usage as well as the prices you pay • Identify all ways to save you energy • Calculate the energy savings of each action • Determine the equipment & installation cost to perform action • Determine the cost to finance each action • Identify all rebates, tax credits, & recycling opportunities Only Actions That Save Money Should Be Performed Source: yoUtilBill 7 confidential – yoUtilBill llc 2009© - all rights reserved
  9. 9. If homeowners know what actions will be economically wise, they will respond… Actual example of savings - $2,500 every year Do these Don’t do these Old annual bill: $6,0331 $6,000 $1,292 $5,000 $27 $55 $146 $44 $97 $684 $254 $334 $4,000 $159 $48 $115 $40 Expected new annual bill: $3,4211 $3,000 $2,000 $1,000 $0 Baseline Plug Loads Air Sealing Lighting Attic Insulation Wall Insulation Crawlspace Refrigerator 1 Pool Filter Pump Dishwasher 1 Heat 1 Water Heater 1 Clothes Dryer 1 Clothes Washer 1 Insulation 1Based on cost of energy consumed in last 12 months; under today’s pricing 8 confidential – yoUtilBill llc 2009© - all rights reserved Source: Equipment specifications, customer interviews, yoUtilBill analysis
  10. 10. Problem: Most homeowners don’t want to invest, they want flexibility to move in 1 yr Options are emerging that allow homeowners to invest in their home’s energy systems without carrying the liability if they choose to move anytime in the future • California Assembly Bill (AB) 811 enables local governments to offer energy efficiency loans to homeowners – Sonoma County has launched this program with $100m in funds – Improvement projects must be tied to the home (e.g. duct work, windows, boilers) – Loans are payable twice a year through property taxes; 7% now, to 3%? • Utilities are considering on-bill financing for residences – Include loan repayments on monthly bill – Ongoing obligations stay with the meter, not the individual Without the ongoing obligation to pay for improvements after moving house, customers are now inspired to invest as efficient homes have higher valuations Source: yoUtilBill 9 confidential – yoUtilBill llc 2009© - all rights reserved
  11. 11. Further, standard private-sector market targeting will deliver the most reductions Home Energy Consumption in Sonoma County Households (Occupied) 40,000 Median 35,000 Average 30,000 25,000 20,000 20% of customers consume 40% of Sonoma’s 15,000 electricity supply 10,000 25% reduction in top quintile consumption gives 10% reduction in county 5,000 0 690 2,070 3,450 4,830 6,210 7,590 8,970 10,350 11,730 13,110 14,490 15,870 17,250 18,630 20,010 21,390 22,770 24,150 25,530 26,910 28,290 29,670 31,050 32,430 33,810 35,190 36,570 Electricity Consumption (mid-point consumption of HHs in range; kWh/Year) Source: UC Berkeley, RECs, EIA, NEIP analysis Source: yoUtilBill 10 confidential – yoUtilBill llc 2009© - all rights reserved
  12. 12. Savings opportunity high for large users; Others must be careful with retrofits Group General Traits Usage Retrofit Economics • Many types of retrofit initiative Top 20% - High • Multi-occupant make sense Consumers • Detached dwelling 43% • Very confusing to figure out • Larger square footage what to do • Some types of retrofit make Next 40% - Mid • Mix sense; most are borderline 41% Consumers • Very confusing to figure out what to do • Single-occupant • Few types of retrofit action make Lowest 40% - Low • Multi-unit dwelling sense (e.g. weatherization) 16% Consumers • Smaller square footage • What needs to be done is often very predictable 11 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  13. 13. With knowledge of which consumers to target, a sensible program is needed PRE-VISIT ENERGY IN-HOME RETROFIT ONGOING ENERGY ACTION ANALYSIS WORK MANAGEMENT ANALYSIS PLAN Free Free Free Government Ongoing loans you with • Review past bills • Conduct • Energy AB811 • Qualify for Diagnostic/Audit Counsellor yoUtilBill • Profile house in the house; drafts plan • Implement ongoing Energy characteristics profile energy –Identifies retrofit work Monitoring and by phone for consumption opportunities –Double-check Management potential to save –One engineer, –Estimates tests to confirm (EMM) program? one hour costs/savings information –Record and • Assess house; –Free of charge –Understands –Access to respond to qualifies for your priorities yoUtilBill real-time yoUtilBill Approved energy Diagnostic • Agree Energy Contractors; consumption /Audit? Action PlanSM pre-negotiated –Track pricing, with you rates rebates, etc. 1Costof energy consumer in last 12 months under today’s pricing 12 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  14. 14. PV solar must be evaluated as part of a whole house view Example Customer View of PV Solar; A Preliminary Look At Overall Savings $35,000 Overall Energy Savings Over Time $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Efficiency (Plus Solar if Cost Solar - Top 2 Tiers Solar - All Electricity (Dollars) ($5,000) Effective) ($10,000) ($15,000) ($20,000) 13 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill LLC analysis
  15. 15. The environmental impact of such efficiency measures is significant Example of the Annual CO2 Would Be Similar To… Savings of One Home... Driving 4,500 fewer miles 16,000 Flying 11,400 fewer miles Annual Carbon Emissions 14,000 12,000 10,000 If 1000 People Joined You, 8,000 The Energy Savings Could… Pounds 6,000 Provide power in Sonoma County for - 4,000 1,180 houses for 1 year 2,000 a hospital for 6 years 0 Today With Just Efficiency a school for 13 years Measures Be equivalent to taking 375 cars off the road a year 14 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill, Chevron, Department of Energy
  16. 16. Will the change happen? Large focus on incentives & stimulus money • $3.2 Billion allocated to fund Energy Efficiency & Conservation Block Grants • $5 Billion in funding for low-income weatherization programs • $800 Million for green jobs, rebates for appliances, & Energy Star Program • Massive subsidization of solar potentially reduces efficiency incentives Financing programs hold great potential, but are in their infancy • Many policy issues need to be addressed – type of assessment, if only finance cash flow positive investments, repairs / replacement • Large potential market for municipal bonds if successful Workforce needs to be developed • Potential for 1.5 million jobs, but need to be adequately trained Consumer awareness about energy efficiency still quite low Source: yoUtilBill 15 confidential – yoUtilBill llc 2009© - all rights reserved
  17. 17. Additional Material 16 confidential – yoUtilBill llc 2009© - all rights reserved
  18. 18. Details of AB811 Eligibility Requirements Required Documents Legal owner of the property Organizational Documents if Property Owner is not an individual Property is developed and located within Sonoma County. (Mobile homes are not Home Improvement Contract(s) or eligible) contractor’s bid(s) or contractor’s proposal(s), which include contractor’s Property Taxes are current name and license number (unless self- Mortgage is current installing) Property Owner is not in bankruptcy and Statements, purchase orders, or other the property is not an asset in a evidence of cost for items not covered by bankruptcy a Home Improvement contract or contractor’s proposal or bid No federal or state income tax liens, judgment liens or similar involuntary liens Current mortgage statements or other on the Property evidence that mortgages or any other loans secured by the Property are current Improvements costs are reasonable for the scope of the proposed project and to Disclosure regarding Assessment Property value Financing (please complete and sign) State of California Fair Lending Notice (please complete and sign) 17 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  19. 19. Gas prices declines expected to reverse as the economy recovers CA Historical Gas Prices CA Gas Baseline Amounts Price Gas Baseline Amounts Dollars per Therm Therms / day $2.50 3.00 2.50 $2.00 Mountain/Low 2.00 Clear Lake $1.50 Coast/S Cruz Coast/InlandHills 1.50 Cent Valley/Mid Cent Valley/Hot $1.00 Coast 1.00 Desert Coast/North $0.50 0.50 $0.00 0.00 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Summer Winter 18 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill LLC analysis
  20. 20. Top 20% are far into top price tier; marginal prices are growing 17% annually in CA PG&E Electricity Price Structure PG&E Historical Electricity Prices Price Price Dollars per kWh Dollars per kWh $0.50 $0.47 $0.50 >300% $0.41 $0.40 $0.40 201-300% $0.30 $0.28 $0.30 131-200% $0.20 $0.20 $0.14 $0.12 101-130% Base $0.10 $0.10 $0.00 $0.00 Jan-10 Jan-09 Jan-04 Jan-05 Jan-06 Jan-08 Jan-07 0 10 20 30 40 50 Your Electricity Consumption (killoWattHours per Day) 19 confidential – yoUtilBill llc 2009© - all rights reserved Source: PG&E, yoUtilBill LLC analysis
  21. 21. Targeting the inspection reduces costs There is a relatively small set of ‘familiar offenders’ Efficiency Area Opportunity Likely Existing Situation Equipment HVAC Cooling Substantive; in hot clime When installed, usually electric central AC. Occationally room-based. Heating Substantive; in cool clime Often gas forced air, perhaps gravity, heat fuel; occationally electric, room-based Kitchen Refrigerator Significant; dep on existing >10 years old, usually more than 1 per HH; poor efficiency Dish Washer Breakeven >10 years old, electric; poor efficiency Other Water Heater Significant; dep on existing Usually gas storage-based, often electric; typically very inefficient Lights Significant Still mostly incandecent (90% energy waste) Clothes Dryer Breakeven Usually gas storage-based; poor efficiency Clothes Washer Breakeven Usually top-loader; poor efficiency Pool Pump Substantive; where installed Usually moderated by valves; very poor efficiency Pool Heater Substantive; where installed Usually gas fueled; poor efficiency Shell Insulate Attic Substantive; in non-temperate Usually gas storage-based, often electric; typically very inefficient Floor Substantive; in non-temperate Still mostly incandecent (90% energy waste) Wall Substantive; in non-temperate Usually gas storage-based; poor efficiency Duct Substantive; in non-temperate Usually gas fueled; poor efficiency Leaks Significant Often a non-trivial source of energy loss Other Controllers PC Periph Strips Non-trivial Peripherials remain on when PC is off Timers Non-trivial Chargers etc. on all time; only needed at 3am Behaviours Focus; 2 actions Non-trivial 1 light on too much; door left open too much Monitors Non-trivial Unrecognized waste in usage pattern A focused, simplified analysis delivers rapid, substantive results – Inspections must focus on known data points; prioritized for economic impact Source: NEIP analysis 20 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  22. 22. 25% bill reduction means saving $700/year Profile of Sonoma County’s Top Quintile Residential Energy Bill (Annual; Median) Key factors Annual Bill: $2,500 (approx) Structure Type detached Age 40 yrs Other Stories 1 Rooms 7 Area 2,400 Occupancy Value Refrigeration Occupancy 4 Annual Consumption Income $100k Electric Gas Cost Cooling Lighting Equipment Cooling Elec/Cntrl 5,986 $1,141 Heating Gas/Cntrl 260 $229 Cooking Gas 17 $15 Water Heat Water Heat Gas 323 $285 Lighting 1,356 $259 Refrigeration 2,109 $402 Other 505 $96 Heating 9,955 600 $2,428 these estimates are for the median user in the top quintile (the average is much higher) Source: UC Berkeley, RECs, EIA, NEIP analysis 21 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  23. 23. Overall-picture of economics are critical High-Potential Changes in (Median) Top Quintile Annual Energy Bill Throw in fridge Switch out the SEER 6 AC and gas furnace for and other a SEER 14 Heat Pump; reduces energy equipment as consumption 40% sweeteners System Existing System Old New System New Type Consumption Annual Change Install Life Consumption Running Annual Annual Annual Electric Gas Bill Costs Electric Gas Cost/Yr Ammort CapCost Bill Cooling & 95% Electric 5,986 $1,141 to heat pump $4,975 15 3,591 $484 $332 $106 $970 Heating 55% Gas 260 $229 359 $48 Cooking Gas 17 $15 15 17 $14 $14 Water Heating 76% Gas 323 $285 to solar $2,100 15 100 $13 $140 $45 $198 Lighting Electric 1,356 $259 to CFLs $225 5 271 $37 $45 $5 $87 Refrigeration Electric 2,109 $402 to efficiency $1,565 10 1,687 $227 $157 $34 $418 Other Electric 505 $96 10 505 $68 $68 9,955 600 $2,428 6,513 17 $892 (@4%/Yr) $1,756 Electricity consumption Bill reduced by a quarter, including reduced one-third installation and financing Dramatic reduction in bill largely a result a result of escaping $0.38/kWh to $0.26/kWh. band. Dramatic reduction in bill largely of escaping $0.38/kWh prices to the $0.26/kWh These estimates exclude expected increasesenergy prices. This view excludes expectrd increases in in energy prices. Even in the $0.26/kWh price band, other opportunities are economically feasible; perhaps shell insulation, ducting and duct insulation, demand management, etc. Source: UC Berkeley, RECs, EIA, NEIP analysis 22 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill
  24. 24. Problem: Each potential retrofit must be evaluated & energy costs allocated Client example – annual savings of changing a pool pump (including financing over 20 years) $1,800 Evaluate current costs (lots of energy Costs spread over Annual cost at 7% Rebates & tax $1,600 in highest tiers) finance term (20 years) credits increase $1,400 (20 years) savings in 1st year $1,200 $1,000 $1,102 $800 $1,577 Annual energy cost $600 of new equipment1 $400 $103 $55 $55 $200 $262 $0 Finance Cost Overall Savings Equipment Cost Installation Cost New Equip Energy Cost Existing Energy Cost 1Mostexpensive energy allocated to highest return measures 23 confidential – yoUtilBill llc 2009© - all rights reserved Source: yoUtilBill LLC analysis

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