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Part 3: Utility Incentive Programs Will Require Stricter Monitoring, Offer Greater Benefits
By Loren Snyder
February 2014 -
Energy Efficiency Article Use Policy
Barbose says that policy changes will require both more stringent energy use, but also increase incentive funds.
"In recent years, state adoptions of building energy codes have increased, and federal minimum efficiency standards for appliances and end-use equipment have been tightened," he says. "These policies affect utility customer-funded programs by essentially raising the baseline against which savings are measured, influencing both the size of the remaining potential that can be harvested through those programs and the mix of technologies targeted."
There are structural changes and economic considerations as well. Flanagan sees continued expansion of incentive programs into specific regions on the U.S., especially the Northwest and Southeast where, he says, energy needs have been met so far, and incentive programs haven't historically been used as widely as in other regions. And Welker, who says that the utility industry hasn't changed significantly in the last 100 years of operation, believes the industry will be rebuilt.
"We are beginning to see changes in the way the markets work," he says. "And we'll need to consider where the national economy is; frankly, how much more marginal growth is available?"
Barbose says that savings goals for the next decade are well beyond current experience and practice, even in states that run exemplary energy-efficiency incentive programs.
"The challenge for these program administrators will be to design and implement programs that can achieve both deeper savings, on average, at customer facilities and have a broader reach in terms of market penetration over a sustained period of time," Barbose says.
He says that service providers will have to achieve savings levels of 25 to 40 percent of existing usage at customer facilities, compared to current practice in utility customer-funded programs, which is typically in the five to 20 percent range.
"We are also likely to see increased attention to integrated delivery of electric and gas efficiency programs, coordinated delivery of energy efficiency, on-site renewables and combined heat and power, in order to reduce transaction costs and provide customers with tailored, customized service offerings," Barbose says.
Welker says he believes this all points to a change in the model.
"Facility managers need to know there's a market shift coming without worrying about becoming masters of that universe," he says.
Loren Snyder, a contributing editor for Building Operating Management, is a writer who specializes in facility issues. He was formerly managing editor of Building Operating Management.
Part 1: Facility Managers Need To Understand Changing Market To Maximize Utility Incentives and Rebates
Part 2: Trend In Utility Incentive Programs Is Toward More Monitoring, Proof Of Performance