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New momentum in the California Legislature is leading to real change in the industry

Posted by Charley Cormany, EFCA Executive Director

After years of doing the same thing and expecting a different result there is finally some real change on the horizon for the energy efficiency industry. Last week the California legislature passed SB 350, also know as the Clean Energy and Pollution Reduction Act of 2015. Initially presented during the Governor’s inaugural speech, it quickly became know as the 50/50/50 plan.

While the oil industry shot back and forced the removal of the first 50, a 50% reduction in petroleum use by cars and trucks, the remaining two thirds of the bill survived the chopping block and holds exciting promise for creating real change in our state.

The second portion of the bill requires 50% of the states electricity to be produced by renewable sources, a goal that is on track to becoming reality possibly even before the 2030 deadline. The real news for the energy efficiency industry is the last 50, the doubling down on energy efficiency in buildings, both new and existing, by 2030. The goal is to increase all energy efficiency efforts to reduce the states already aggressive goals by another 50%, something that will require significant support in order to achieve.

There are several specifics in the bill that will lead to real change in our industry. Perhaps one of the most exciting, from our perspective, is the focus on measured results – something Efficiency First California has been proposing and supporting for several years.

With a focus on measuring and quantifying results we can develop an industry that encourages deeper retrofits and rewards companies that are doing high quality work. This is a significantly different approach than trying to predict savings or using energy models to determine incentive levels. With measured savings, incentives can be based on actual results regardless of how they are achieved. This creates a market-based solution that encourages innovation over regulation.

The missing piece of the puzzle has always been how do we measure the results? Unlike solar, we have never had an easy-to-read meter to quantify our results and what’s different now?  The key component, the current shift in thinking, is the development of EE Meter technology. EE Meters (energy efficiency meters) are not physical meters but software solutions that utilize smart meter data to verify actual savings, the kind that reduce customers utility bills. EE Meters require no physical connection or intrusion into the home. In addition to being easy to use, the EE Meter overcomes previous concerns with privacy that have been a roadblock to obtaining utility bill data. EE Meters will allow interested third parties to obtain information about energy use without compromising the customers private information, a very legitimate concern.

Imagine being able to know how effective your work is without going back to your client for proof or installing physical data loggers? From a business standpoint, access to utility bill information will allow you to test various measures and determine which is actually more effective, no more guessing, no more dependence on flawed software models. Imagine being able to install any measure you desire and building a business model based on measured results vs. program requirements. When the focus shifts to actual performance creative companies will develop innovative solutions and real energy savings will be the result.

We are very excited to see change in the energy efficiency policy in California. With the states ambitious goals we need to look at new approaches to allow the industry to scale. We see SB 350 and the political support in Sacramento for measured savings as huge wins. There is momentum building behind measured results and significant changes are finally taking place in our industry. The multiple benefits of a measured savings approach might just be what we need to create true market transformation in the energy efficiency industry.

For more detailed information please check out this article from EFCA board member, Matt Golden.

Charles Cormany
Executive Director