Posted by Charley Cormany, EFCA Executive Director
Stacy Butler, our Membership Director, speaking at the PG&E Contractor Exchange. (Photo from Build It Green)
The 2016 PG&E Contractors Exchange mingled Home Performance Contractors with A/C Quality Care Program contractors. Was attending the event still worth it for our community? I believe it was. Despite the inclusion of the other contractors, discussions were still heavily based on Home Performance, energy savings, and the Energy Upgrade California Incentive Program.
Takeaways for Contractors
Besides the worthwhile breakout seasons and the chance to connect with like-minded contractors, there were two other big takeaways from the event.
One was that home performance contractors can learn from each other. The industry may not be in its infancy, but it’s not quite grown up. We still have a lot to figure out, and we should do it together. The sharing of information is crucial to our industry.
The second takeaway was a reaffirmation that the rebate programs aren’t performing as expected. The function of the incentives is to pay for energy savings and the ratepayers simply are not getting what they are paying for. ( Energy Upgrade California is Not Sustainable)
There are some slow and positive changes, though, including how Energy Upgrade California (EUC) rebates are calculated. These changes are designed to incentivise greater energy savings. But these small changes likely will not be enough. This means there are much bigger changes to come, and it is important for contractors to understand and be ahead of those changes.
Cracking the Code
During the midday presentation, Mark Bigby discussed Build It Green’s survey of top EUC contractors. The survey focused a lot on what works and what doesn’t. It included examples of common problems and common solutions. It reiterated the fact that the industry is still trying to figure a lot out and that learning from each other has value.
- Internal process
- Affording test equipment
- More homeowner education
- Differentiation from other contractors
- Referral programs
- Knowing your market
- Having well-defined goals
Contractors frequently face the same challenges and effective solutions benefit everyone. To me, this means that one of the best ways for this industry to be successful is to share ideas and learn from others. The potential market for home performance and energy efficiency contractors is huge. We should try to work together to grow that market. To use a cliche: a rising tide will carry all boats.
Raising the Bar on Residential Energy Efficiency
Sabrina Gomez started out the PG&E afternoon presentation. Her focus was on how Energy Upgrade California performed last year in PG&E’s territory and what to expect into 2016. Overall, it illustrated that the program is not performing as well as it could and that changes are coming.
2015 in Review
There were several positive notes in 2015. Rebate processing time was cut nearly in half, additional co-marketing resources were made available for contractors, and it was clear that there were a lot of happy customers. Not everything was positive, though.
Over 3,600 jobs were completed last year in the PG&E territory. But is volume really a good indicator of success? Jobs completed under the Home Upgrade Program did not meet their energy savings goals. Modeled savings was 9.22% versus the 10% goal.
Advanced Home Upgrade, in contrast, did meet its goals: 22.17% vs 20%. A great result? Not really. The problem is that the savings are still modeled ( The “M” Word), and that the state’s ultimate goal is a 50% savings on existing buildings by 2030. ( New Momentum in the California Legislature is Leading to Real Change in the Industry) The industry and the EUC program has to do a much better job to have any chance of meeting the state’s aggressive goals.
2016 Rebate Structure Changes
The changes that are coming this year that are designed to help meet the program’s short-term goals. ( Changes to Home Upgrade Program Rebates)
The Home Upgrade Program is getting rid of “kickers”. To qualify, Home Upgrade jobs must reach 150 points instead of the former 100 points. Maximum rebates will stay the same and points are aligned statewide.
For the Advanced Home Upgrade, the incentives for site savings are going down, though kWh and Therm “kickers” are not changing. (Pool pump and AC “kickers” are also staying.) The maximum rebate will not change. Contractors and homeowners will just have to get there in a different way.
How are these changes suppose to help the program meet its goals? Stay tuned for deeper analysis in future posts.
PG&E Home Upgrade Future Directions
The afternoon PG&E presentation concluded with Leif Magnuson talking about the future of the Energy Upgrade California rebate program. The changes for 2016 are just the beginning.
Other Program Issues
Besides the programs not making their goals, there were other issues.
One unavoidable problem is the way that rebate program effectiveness is calculated by the state. It undervalues home performance work. The basic formula compares homeowner out-of-pocket expense to program dollars spent. Unfortunately, this type of calculation does not account for the non-energy savings benefits of building performance upgrades.
Another problem is that the program is running up against the ceiling of money. Funds are not unlimited. Savings need to be based on actual and not modeled savings. So what are they going to do about it?
One of the issues that Efficiency First California has championed is that the software required by the program for energy modeling was inaccurate. It was consistently over predicting energy use and energy savings.
CALTRACK is a software tool that compares pre-retrofit energy use and post-retrofit energy savings. This allows us for the first time to be able to measure actual energy savings vs. simulated or modeled savings. This weather-normalized data can then be utilized to improve the accuracy of the program approved modeling software in order to provide more accurate predictions. ( CALTRACK – Metered Savings and Providing Feedback)
A significant feature of CALTRACK is the ability to share third party information without compromising the homeowner’s privacy. This means for the first time, contractors can work together with PG&E and Build It Green to track jobs and improve their business.
A beta version should be available for use shortly.
Pay for Performance
The next step with CALTRACK is pay for performance. With the ability to measure actual energy savings, incentives can be paid out on a performance basis. This is something that Efficiency First California has been pushing for some time. CALTRACK information can be used to pay aggregators the a rebate amount based on actual savings.
This is a completely new approach to providing incentives for energy savings. It will allow for third parties, from the private sector, to design and support their own rebate programs. In practice, there’s a lot to still work out.
PG&E is sending out an RFP soon and intends to have a pilot program in place by the end of the year. The expectation is that the aggregators will be large companies and most likely the current players in the PACE market.
Part of the excitement is that there could be added services that include operations and behavior. This is because it doesn’t matter where the savings comes from, it just has to be measured at the meter.
Will it work? Only time will tell. The current approach is not working and we feel that this is a much better option. It’s time to try it out.
It Was Worth It!
Admittedly, it’s hard for contractors to find the time their busy schedule to attend events like the Contractor Exchange, but it is well worth it. The exchange was another place where contractors can keep up-to-date on industry trends and practice both near and long-term. Both are vital to the health of your businesses and the industry. It is also a good place where you can see program people–yes they’re humans–and share ideas and best practices with other contractors.
Thank you to Build It Green, EGIA, PG&E, and all the presenters for all their hard work.
What were your thoughts on the 2016 PG&E Contractor Exchange? Let us know in the comments.
Whether you can make it or not to these types of events, EFCA is here to keep you informed. Sign up to become a member today.
Chief Information Officer
Efficiency First California