Thirty Years Later
In the midst of this century's first energy and housing crisis, we can learn a lot from the years following the Carter Presidency - no sweaters required.
Thirty years ago, our President declared energy independence was the “Moral Equivalent of War,” and we needed a new national energy policy to deal with the lessons of the energy crisis of the 1970s. Sound vaguely familiar?
One of the promising outcomes of the National Energy Policy act of 1978 was the formation of the “Residential Conservation Service” program that mandated in-home energy audits were to be offered at no charge by utilities under the auspices of state energy offices (see “History”). Was this idea doomed from the start when President Carter’s fireside chat was perceived as a call for national sacrifice? Did we miss the message of Energy Efficiency as a “no-sacrifice” alternative to the suffering that supply shortages, embargoes, high energy costs and environmental catastrophe would bring? Was there an overt or hidden benefit to requiring a massive “academic exercise” of engineering style audits for low-tech consumers? The answer is, as usual from an energy geek, “It depends.”
What does it depend on?
- The value of the jobs created and the careers launched
- The ability of local program managers to link action to audits with incentives, low interest loans, rebates and Tax Credits
- Whether we learn the lessons of history as we re-discover the “Moral Equivalent of War” (on climate change)
|Prior to the laptop computing capacity we have today, the RCS audit relied upon a mainframe computer to crunch numbers, recommend measures and estimate energy savings based on individual customer needs.|
Prior to working at the City of Palo Alto, I studied energy policy at Stanford University, inspired by titans of the energy efficiency world like Amory Lovins, Gil Masters and Harry Whitehouse. I was looking for a way to join the cause articulated by “Soft Energy Paths.”
I applied to work for Pacific Gas and Electric Company (PG&E) as an RCS Auditor. PG&E responded that it really wanted to recruit me as an in-house RCS trainer assigned to take over from national expert consultants and become part of a new in-house team. The few short months of early exposure to RCS and the State Plan positioned me to be just slightly ahead of the new game of energy efficiency. Instead of being trained as an auditor, I became an auditor trainer. It was an amazing first month. I observed our experts and then assumed the responsibility for delivering one quarter of the curriculum the following month.
PG&E’s RCS Training program served its graduates well, and is widely known as the best energy “boot camp” training for new hires in PG&E history. It also served as the backbone for subsequent training for Low-Income Energy Efficiency programs, Home Energy Rating Training and now Home Performance training. The four-week program was state-of-the-art. It was built on an effort by the Department of Energy to create model curricula by developing an intense training program focused on building science as available in 1980. Two full weeks of Energy Efficiency training was followed by two more weeks of material on Renewable Energy, all focused on delivering the knowledge, skills, and abilities necessary to collect and enter 114 data points into a “revolutionary” computerized remote access energy audit.
Prior to the laptop computing capacity we have today, the RCS audit relied upon a mainframe computer to crunch numbers, recommend measures and estimate energy savings based on individual customer needs. Through an “acoustic coupler” strapped to the phone handset, the device mimicked the tones that brand new “touch tone phones” provided, but were not widely available in 1981. Eventually, other interface devices were created including a precursor to today’s laptop with a keyboard and onboard memory that enabled faster data transfer and receipt. Today, we might scoff at that early technology, but it did provide these key ingredients to a quality audit: real time results for customers in their homes, a centralized database and quality control.
Its major appeal was that it was the key that unlocked rebates, loans, and tax credits for measures that were otherwise not deemed to be generically cost effective.
In-home audit programs continued for a short period after the RCS state mandate expired. The Energy Savings Plan program was created, effectively sweetening the cost benefit analysis by directly installing shower heads, water heater blankets, and faucet aerators.
Early in the evolution of Residential Energy Management programs at PG&E, leadership realized the key Achilles heel of the RCS program—audits alone don't save energy. Bottom line: It is actions taken by consumers to adopt energy-saving practices (conservation) and measures (efficiency) that make a difference for individuals and society.
To incent consumers to act, PG&E developed the first major financing and rebate programs in the country. Between 1983–1987, more than 450,000 10-year Zero Interest Loans were implemented and over $35 million Cashback Rebates were paid to customers. To sweeten the deal, these programs also integrated Federal and State tax credits. Even though some states grumbled at being forced by the Federal Government to implement an expensive “academic exercise only nuclear engineers could appreciate,” it was possible to make the most of the situation and help customers address their energy costs. In fact, the home energy audit remains one of the most popular services ever performed by PG&E employees.
Home Energy Rating Systems (HERS) were an offshoot of energy auditing programs created to provide the analysis needed to qualify for Energy Efficient Mortgages (EEM) through HUD, Fannie Mae or Freddie Mac. Energy Efficient Mortgages have been available for decades, but with sub-prime loans, they were not considered necessary. If you needed a home equity loan for energy improvements in recent years, you just clicked a mouse. EEMs still offer the promise of freeing up capital to retrofit existing housing stock with the right kind of loan now: 30 years and very low interest.
Time-of-sale energy retrofits using EEMs and rating upon resale requirements have been shot down by the real estate and lending industries as a complication that would kill deals. Green brokers, armed with a new passion for energy retrofits due to the climate crisis, are starting to create new opportunities. In California, AB 549 created a plan to require an energy saving guidebook and eventual rating on resale requirements—and now, California has passed the HERS Phase 2 regulations that define audits and ratings as well as training and certification of the players. In addition, an analogous product on a national level has been developed by RESNET that will guide policy and certification of existing home ratings and audits nationally.
To move forward, we must look back at the misapplied engineering, academic exercises, false starts, inadequate consumer response, market opposition, and poor cost benefit analyses that killed old versions of audit and rating programs. As we restart in-home energy audit programs, what lessons do we need to learn from history so we are not doomed to repeat past mistakes?
- Linking loans and rebates to audit services
- Making it easy to get the work done while maintaining consumer protections
- Using real customer data and not just generic modeling
- Taking advantage of less costly diagnostic tools to get the diagnosis right the first time
- Incorporating building science principles in a systems approach
- Valuing the information from both audits (based on actual disaggregated consumption) and ratings (modeled usage based on rating the home, not the occupants)
- Acknowledge and encourage different business models and job descriptions
- Home performance needs a custom assessment without interference by an additional player
- Get work done in turnkey manner, but protect consumers
A new era of cost benefit is needed to make existing building retrofits pencil out. We must monetize energy efficiency savings in combination with a robust valuation of greenhouse gasses. We must come to the realization that if we are going to have any real possibility of reaching the carbon reductions we must reach to fend off climate change and meet international treaties, we must conquer existing building efficiency retrofits. If 21% of the carbon footprint is from existing residential buildings, we must tackle this last difficult task—because, simply put, savings cannot accrue in sufficient quantity from other greenhouse gas producing sectors to counteract the contributions of the already-built environment.
|We need to phase in projects that segregate the top quartile of homes that use half the electricity, and address them with Home Performance programs aimed at eventual deep energy savings.|
Charles Segerstrom is the Supervisor of Energy Efficiency Training for Pacific Gas & Electric Company.
>> For more information:
PG&E’s Energy Training Center — Stockton
1129 Enterprise Street
Stockton, CA 95204
Tel: (800) 244-9912
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