By Nancy Barba, Manager Los Angeles Office
The 2009 American Recovery and Reinvestment Act (ARRA) funding was an amazing, and unparalleled, opportunity. I helped implement, administer, and secure $30 million in funding for home upgrade programs that had lasting impacts and shaped the way I design programs today. As I talk with clients about “shovel-ready” programs should federal funding become available in 2021, I’ve been sharing four lessons I learned from my ARRA projects.
Lesson 1: Be prepared to move the money.
The programs I implemented were funded through the Energy Efficiency and Conservation Block Grant Program, a new $3.2 billion block grant that DOE administered and just one sliver of DOE’s massive economic boost. Each EECBG recipient had to move the money fast. Our local government partners and clients aimed to retrofit 30,000 homes by scaling up existing whole-house retrofit programs. As the implementer, Frontier Energy soon discovered that existing programs couldn’t scale as fast as they needed to. My team pivoted and designed a faster, more flexible program, Flex Path, that had its own timeline and tempo. For future funding, we’ll focus on pace and scale simultaneously by leveraging existing resources and workforce instead of tagging on to other programs.
Lesson 2: Design programs for the people with the fewest resources.
Whole home retrofit customers tended to be more affluent homeowners. Flex Path used a combination of measures from a menu-based approach, varied incentives, and reduced upfront costs for homeowners, that increased the number of moderate-income customers that participated. However, the program was still out of reach for many low-income households. In future programs, we’ll incorporate alternative financing mechanisms, like on-bill financing, and the layered incentive approach that we use with clients’ EE programs today.
Lesson 3: Concentrate on the workforce.
ARRA programs included extensive consumer education and advertising to drive demand. We found that despite all the mass media investment, retrofits were triggered by a homeowner’s problem, like a broken water heater, and driven by the participating contractor. We shifted budget from consumer outreach to contractor co-op marketing and saw a direct correlation between marketing and retrofits. We use a contractor-focused approach in other EE programs with the same result and will design future programs with the workforce as the motivating element. If a program or measure makes business sense, then the contractor will help it make sense to the consumer.
Lesson 4: Be prepared for the money to run out.
We were relentless in getting non-ARRA funding and continued the program for several years. However, all programs end eventually and when it did, we saw many grantee programs’ momentum fall off a cliff. Contractors that built a business around energy efficient technologies couldn’t sell them without generous incentives. Some contractors closed shop and others returned to box swapping. In our current programs, we teach contractors about a range of equipment, techniques, and sales approaches so they can maintain the push for energy efficiency when the rebates end.
If the new administration launches an energy stimulus package, it will likely build on the principals of 2009 ARRA and incorporate many of today’s issues including equity, affordable housing, and assisting small businesses.
—December 10, 2020
By Dan Robb, Frontier Energy DER Expert
In August, my wife and I bought a house because 2020 wasn’t quite crazy enough! The home sat vacant for months; the appliances, HVAC, and other systems hadn’t been touched for a long time. During our final walkthrough, it occurred to me that the hot tub sitting in the backyard was full of water, but I had no idea how if or how it would work. It made me think of the energy systems that I’ve been monitoring for years.
I perform monitoring and verification (M&V) for complex distributed energy resources across the U.S. Some DERs, like photovoltaic panels and battery storage systems, have no moving parts and operate in silence. You can stand next to one and have no idea if it’s working well—or working at all. Others, like offshore wind farms or fuel cells located on the roof of a high rise, are in places that makes visual verification nearly impossible. Companies and utilities want to make sure the DER are working at peak efficiency and that the energy production, emissions reductions, and provided grid support are correctly credited so they can be monetized.
Here’s what we do. When the DER is installed, Frontier adds sensors to record and collect interval performance data. The exact requirements vary significantly depending on several factors, however actual on-site measurements are always required. A datalogger records the sensor readings into a time-stamped data file that is then uploaded to our system for verification.
In its most basic form, verification ensures that the data is accurate and includes documenting the chain of custody of data from sensor to recording device to transmission. This process includes many data quality checks to ensure the authenticity and accuracy of the data. Data quality is always important but is crucial to the companies that generate renewable energy credits (RECs) for programs like California’s LCFS and SGIP, New York’s NYGATS, WREGIS, New England’s FCM, and Massachusetts’ APS, and SREC programs. Frontier is a trusted third-party verifier and data provider for these and other REC programs.
Back to the question that I am sure is on your mind—the hot tub. The home inspector said it was in working condition but when my wife first turned it on, only one of the eight jets worked. I trusted the inspection report but didn’t verify the data. Now I’m monitoring its water-heating performance to decide if it’s worth repairing. I have higher hopes for the furnace, especially now that we received our first snowfall of the season here in Upstate New York.
—November 23, 2020
By Chris White, Sr. Manager, Transportation and Power
Who has the “right” recipe for chili? In Southern Indiana, where I grew up, chili has spaghetti and a side of peanut butter bread. When I moved to Ohio, beans replaced spaghetti and Fritos were the garnish. With each move—Texas, Louisiana, East Coast, and California—the chili was different, and equally delicious.
Methods of forecasting EV growth are as varied as chili recipes. This is a technique I use to estimate EV adoption based on population growth and new car sales. It can point out actions a utility or local government can take to encourage a greater number of new car buyers to choose an EV and measures that can keep used EVs in the local market. (Think of it as adding your own spices.)
The EV Sales Projection Recipe
1. Define the geography.
I prefer to use census tracts and exclude non-residential areas; it might be faster to select by major metropolitan areas or county and factor in that some sections will have few households.
2. Estimate the new car buyer population.
This is a great summary of Federal Reserve Bank data about the new car buyer demographic. Find the number of households in your geography that match the demographic and the mean or average number of vehicles in each household.
3. Estimate past new cars sales.
Use your state’s New Car Dealers Association and DMV registrations, if available, to find the number of new light-duty vehicle sales in the same calendar year as the demographic data. Take note the percentage cars and light trucks and by classification (luxury, SUV, compact, etc.). The level of detail of this data varies from state to state and may include fleet vehicles.
4. Approximate the number of new cars in the geography.
Divide the number of households by the number of new light-duty vehicles. This is where working at the census tract level is helpful.
5. Estimate percentage of EVs.
Use DMV or rebate data to find the number of new EVs in the same year as steps 2 and 3. If possible, note percentage of sale by EV type—SUV, sedan, luxury. You might also want to eliminate PHEVs from the EV numbers.
6. Forecast population growth.
Add data to estimate the number of households likely to buy a new car during the next 10 years. This might include population change, land use planning, and transportation planning that can increase—or decrease—the number of detached homes. Some places have detailed data, others assume 1% population growth per year for the region.
7. Forecast new car sales.
New cars sales have been stable since 2015, including this year. Although no one knows what 2021 will bring, assume that the same percentage of households will buy a new car every year for the next ten years.
8. Plug in the EV percentage.
Use the percentage of EVs in step 5 to estimate the number of new EVs every year for your “business as usual” forecast. You can increase the percentage of EVs each year or two based on the predictions of makes, models, and price ranges. This is why knowing the percentage of light trucks in the geography is helpful.
With this baseline data, we can figure out when the percentage of EV sales needs to ramp up to meet a local goal or how to plan infrastructure to broaden the appeal of EVs to certain market segments.
Email me for the spreadsheet to use as a template for your own market estimates or give me a shout if I can help. Or we can trade chili recipes.
—November 2, 2020
by Chris Bradt, On-Bill Financing Lead
For generations, utilities have delivered light, power, water, and heat to their customers’ doorsteps and the customer takes it from there. More recently, utilities recognized that what customers do behind the meter matters and started incentivizing energy and water efficiency upgrades with rebates. This has unintentionally created an equity gap. Rebates are effective for residents and businesses who have savings accounts or access to affordable credit, but for many these financing mechanisms aren’t available.
The picture above is a 1939 map of Oakland, Berkeley, and surrounding communities. In the 1930s, the Home Owners’ Loan Corporation, a federal agency, rated neighborhoods to guide investment. The red areas, which were predominantly communities of color, were deemed the greatest financial risk. “Redlining” made it difficult for residents to get loans for homeownership or maintenance, which led to cycles of disinvestment. Nearly 80 years later, redlined neighborhoods across the county are largely low-income areas. Residents and businesses tend to have smaller financial reserves and less access to credit, which significantly decreases their ability to participate in utility programs. These customers, however, can reap the greatest financial and environmental benefits from efficiency upgrades.
On-bill financing can make efficiency upgrades more equitable. With a unique approach called tariffed on-bill financing, the utility helps their customers invest in efficiency. The utility pays for measures up front and the customer repays the utility over time on their monthly bill. The customer sees an immediate, but small reduction in the utility bill and if the customer moves, the new customer assumes the payments. Other models for on-bill financing operate similarly, but typically involve a loan that the customer repays in full if they move, which can be difficult for customers with financial constraints.
Frontier implements OBF programs for several electric and water utilities and we’ve learned three valuable lessons:
1. For the customer that finances efficiency, the value proposition is very different from that of solar. Efficiency savings and ROI can be incomprehensible to customers, especially for projects with multiple measures. It’s important that outreach and marketing clearly communicate the immediate benefits of increased comfort, improved performance, additional safety, and/or better indoor air quality.
2. The utility bears some financial risk, but like other utility investments the risk is low. If a housing unit is empty or the resident doesn’t pay the utility bill, the on-bill investment isn’t being repaid. Financial partners can offer a no-payment grace period or a loan loss reserve, but the partner is typically paid for taking the risk through an initial stake, higher interest fees, or service fees. An advantage of on-bill tariff is that charges collected from all ratepayers backstop the investment. In the tariffed on-bill programs that we work with, unpaid collectibles are less than 0.1%.
3. Financing programs, whether loan or tariff, trigger statutory and regulatory issues that utilities are unfamiliar with, like the Equal Credit Opportunity Act and state credit protection laws. Lending laws are unfamiliar to many utilities, but they are not as scary as you might think.
It’s my personal mission to help people use less energy and water. I often think about how we, as an industry, can change business-as-usual practices to reach people who can least afford efficiency upgrades and yet stand to benefit the most. Contact me at [email protected] and connect with me on LinkedIn and let’s share ideas.
—September 25, 2020
by Adam Walburger, Frontier Energy DER Expert
As municipalities and utilities begin to shift their fleet vehicles to all electric, they are also considering battery energy storage. BES can keep charging stations operational when the power is out and reduce costs associated with demand charges. However, the costs associated with solar PV and BES can be substantial.
Frontier and our partner DKS Associates are creating year-by-year plans to transition light-duty fleet vehicles to electric by 2030. My team’s role is to model the additional electrical load that car charging adds at facility, and then estimate hour-by-hour energy consumption and cost, including potential demand charges.
Most clients have one or two primary overnight parking locations and several additional “domiciles,” each with a handful of overnight cars. Vehicles’ duty cycles range from less than five miles a day to more than 100 miles a day. Therefore, each domicile has a unique energy profile. Some will never draw enough power to slip into a demand charge while others could see demand-setting events several times a day. In areas with pervasive PV installations, utilities’ peak periods are shifting from late afternoon to early evening, which will coincide with charging times as fleet EVs return to their domicile location for the night.
With a good picture of energy demand, we review satellite images and building plans to determine if a domicile has enough physical space for PV and long-duration BES. (Pre-COVID we did site inspections, but we’re getting good at estimating roof and parking lot sizes from Google Earth.) Off-site storage is also an option but hasn’t been feasible in any of our completed transition plans. In current projects, our model shows that BES yields a reasonable payback at only one or two domiciles, and not necessarily a primary parking location. BES has the best return on investment at locations at which high-mileage vehicles charge—those that return to base every day with a nearly depleted battery—by time-shifting low-cost PV generation into the early evening hours to offset a portion of vehicle charging needs. Currently BES is a costly option and for most fleet domiciles the more cost-effective approach is to combine load management and behavior change. As prices decline, we expect BES deployment at additional facilities to meet the dual goal of resiliency and ROI.
For many of our clients, though, EV transition is part of a commitment to reduce greenhouse gas emissions and decarbonize their buildings and fleets. Our transition plans to date show that opting for a zero-emission fleet, including BES instead of generators, can reduce annual greenhouse gas emissions from light-duty vehicles by more than 95%.
Interested in how this could work for you? Drop me an email.
—August 25, 2020
by Richard Young, Director, Frontier Energy Commercial Foodservice
In 2014, Frontier Energy’s Food Service Technology Center (FSTC) partnered with New Buildings Institute and Rocky Mountain Institute to model a zero-net energy quick service restaurant for McDonald’s Corporation. Last week, McDonald’s announced completion of a first-of-its-kind zero-net energy quick service restaurant that uses many of the recommendations in the modeling study.
According to DOE, a zero-energy building has an energy use intensity (EUI) of 20 to 30 kBTU per square foot per year. A typical office building has an EUI of about 70. A quick-service restaurant, like McDonald’s, has an EUI between 600 and 2,000 due to energy-intensive cooking, holding, sanitation, refrigeration, and ventilation equipment.
A typical McDonald’s has a small footprint and very limited capacity for onsite PV. To get to ZNE status, we had to decrease energy use by 60% compared to a best-in-class McDonald’s. We met that goal by focusing on an integrated design with four strategies:
Reducing or eliminating stand-by energy consumption is a challenge in commercial kitchens, particularly for quick-service restaurants. Griddles, fryers, ovens, toasters, warmers, and espresso machines need to be hot and ready to prepare the next order even when customer traffic is slow. FSTC-tested appliances that “sleep” when business is slow and quickly ramp the heat back up to serve customers were a key component in the study, and we were glad to see that the ZNE McDonald’s implemented many of these appliances.
Now, more than ever, restaurants need to find ways to reduce energy costs. Every restaurant can significantly reduce their utility bills by using energy and water efficient appliances. Read the results of a plug-load study that Frontier recently finished or contact me to brainstorm ideas for making any hospitality business more efficient and ZNE-ready.
—July 21, 2020
“It’s the right time to invest,” said Gerardo Aguilar of MGM Innova Capital. “We want Red Frog to be ready for the turnaround!”
Red Frog Beach Island Resort on Panama’s Bocas del Toro archipelago, was designed in concert with nature. “When we founded it 17 years ago, our goal was to be socially responsible and environmentally sustainable,” said CEO Joseph Haley. “Our first steps were to preserve 80% of the property as a nature preserve and establish a foundation to improve the lives of the people who live in the nearby community. Then we built a beautiful eco-conscious property that has more natural forest than when we started.”
In 2015, Frontier Energy’s Energy Insight team conducted a comprehensive certification process that made Red Frog the first Panamanian destination to be Green Globe certified. “The resort had to meet 340 criteria, including sustainable management, environmental practices, social and economic elements, and cultural heritage,” said Energy Insight’s Tanuj Gulati.
The resort is not connected to Panama’s electrical grid. “We have to generate our own power,” Joseph said, “and as you can imagine, a vacation resort has significant electrical demands.” That’s where Gerardo comes in.
MGM manages private equity funds to implement projects that can mitigate climate change while generating financial, social, and environmental benefits. “We started working with Red Frog and Costa Rica-based Verde O Nada to reduce their need for diesel,” Gerardo said.
“The first step was to add solar and integrate it with the diesel generator to create a microgrid. It reduced fuel by 40%, but solar only provided about 20% of the energy needed,” said Verde O Nada’s Michael McKuen. “Then we worked with Energy Insight to increase efficiency by installing LED lighting, new HVAC, pool pumps, and more efficient controllers.”
Early in 2020, the team started working on the next step of Red Frog’s energy independence by adding 1.7 MW of solar and a 4 MWH battery storage system. “Verdo O Nada already manages Red Frog’s microgrid and the BSS will be one more tool to use,” Michael said. “The BES will substantially reduce Red Frog’s energy costs even as the owners repay the investors.” Joseph added, “These DER assets add value for our villa owners now and in the future.”
When the COVID crisis hit, Panama closed its airport and tourism stopped. The team didn’t even consider slowing down the project. “This is the best time to do it!” Gerardo exclaimed, “The resort is empty, so guests won’t be bothered. The construction workers can stay in the student housing to avoid the boat commute to the island.”
“It’s a heavy financial investment, even in a booming economy,” Gerardo said. “We’re bullish that tourism will return, and our technology will provide clean energy for Red Frog’s owners and visitors,” Michael added.
“There’s no better time to do this,” Joseph said. “We are starting to receive requests for long-term villa rentals. If you’re working from home, why not work from paradise? Long-term, it’s a smart and responsible investment for our resort and for the environment.”
—June 24, 2020
Karya Management manages 53 multifamily properties throughout the Houston, Texas area. “Karya Management’s philosophy is to create a community,” said Swapnil Agarwal, CEO and founder of Nitya Capital and Karya Management. “We don’t just manage the properties. We incorporate activities like after-school programs and established a foundation to invest in quality of life initiatives for our tenants, employees, and the community at large.”
Karya takes advantage of energy efficiency programs that Frontier Energy administers for CenterPoint Energy. “It helps tenants manage their bills,” said CenterPoint Energy’s Chris Lallier, “and helps reduce the load on the grid and conserve energy.” In the Multifamily Direct Install Program, contractors install LED lights, faucet aerators, low-flow showerheads, and water heater pipe wrap in apartments at no cost to the property owner or tenants.
In late April, Frontier Energy’s Steve Wiese called Karya’s regional manager Suresh Chachlani to discuss shifting timelines for already-scheduled work due to shelter-in-place orders. “We started talking about opportunities for direct install work at other properties and realized that the key to unlocking work was to train Karya Management’s maintenance staff to do the installations.”
“Our three properties in Baytown (Texas) have older, less efficient buildings,” Suresh said. “We expect that most tenants will continue to work at Baytown’s refineries because they are essential workers, but they will also spend much more time at home. We could be proactive with the Direct Install program to help tenants control their energy bills.”
Using the maintenance staff to do the work was a great solution. “Each property is like a family; the employees and tenants all know each other,” Suresh said. “It wouldn’t be like letting a stranger into your home. We can strictly oversee the proper use of PPE and maintain sensitivity to tenants’ needs.”
The Karya team immediately started contacting tenants at all three properties via letters, emails, and phone calls to let them know about the project’s benefits. Karya also communicated that the process would help ensure the safety of tenants’ families and maintenance employees.
In early May Frontier Energy’s Edwin Velazquez led a walk-through audit of three vacant apartments. “We identified thousands of opportunities for LEDs to replace existing incandescent bulbs,” he said. After the audit, Edwin ordered materials and modified the installation plans for the maintenance staff. “Materials are expected to arrive around May 18, and installations in 480 units at three properties should be complete by early June,” he said.
The LEDs will help every tenant reduce electricity loads and lower the electric bills during the hot Texas summer. The project helps Karya Management demonstrate its ongoing commitment to conserving energy, helping the community, and—most importantly—helping tenants.
—May 14, 2020