The Home Performance Industry Debuts a Market-Based Solution to Meet State Energy Goals.

The Home Performance Industry Debuts a Market-Based Solution to Meet State Energy Goals.

The Home Performance Industry Debuts a Market-Based Solution to Meet State Energy Goals.

Question:  What is it going to take to meet State energy goals for California’s 13 million homes?

Industry’s Answer:  It is going to take a scalable energy efficiency market that rewards actual energy savings and leverages traditional market structures that already allow other comparable markets to grow and thrive.

The Bad News

Based on the number of EUC jobs submitted through December, 2013 it is obvious that the market is not growing.  Over $200,000,000 has been spent in program overhead, (not including the homeowner incentives) or about $25,000 for each of the 3,615 completed jobs in 2013-2014.  There have been a total of only 7,500 jobs completed since the program inception in 2010. 

The Existing EUC program is both a cumbersome and confusing program for contractors.  The rules and incentives keep changing, and program design and energy modeling set crazy customer expectations and limit variety in business models.  In fact, for many contractors it costs more to participate in EUC than the value of the sales they receive from the incentives.   As result, many established contractors have started to leave the program.   In summary, the current market is not working; companies are not able to be profitable and this is the main reason things are not scaling.  Unless Energy Efficiency is a good business, no amount of program adjustments will get us on the track that will lead to success.

The Good News

 That is the bad news.   The good news is that when we look at the actual fundamentals of the MARKET, what we care about most, it is actually working!  And, when we look at actual energy savings realized by the program, we see that home performance really does work.  Once we strip away all of the program costs, layers of regulations, the requirement of one software package, etc., there is clearly a great potential for EUC to provide significant energy savings if we can get it to scale.  We simply need to develop a system that delivers results that are lucrative for customers and contractors, while aligning everyone’s interests toward achieving real energy savings.

What We Need to Succeed

 In short, to succeed we need: (1) Verified actual energy savings – and an effective means to reward customers and contractors for energy savings results, (2) Profitable business models (until Participating Contractors start making money, nothing will turn EUC around, and (3) Competition and innovation to ensure that the full range of homeowner needs are met.

The Solution

Energy Efficiency Marketplace 2.0 – A Market Based Solution for Meeting our Energy Goals  presents the industry’s roadmap for building a scalable, sustainable energy efficiency market that can serve California’s 13 million homes and handle the estimated $100 billion of economic activity that effort will generate.  Efficiency First California (EF California) has presented this program in a webinar format twice in the past month; the first time to small group of leading California Home Performance Contractors, program implementers  for the purpose of gathering their input and feedback. The second time, on April 15, 2014, to our members for their feedback on this proposed approach.  During that webinar process, the name of the plan has changed from “EUC 2.0” to “Energy Efficiency Marketplace” (EEM) but the content remains the same.  The entire first webinar presentation is currently posted here.

What You Can Do Right Now

We encourage you to go to the website, watch the webinar and then get involved and support this effort by sending us your feedback.  No amount of tweaking of the current program is going to solve the existing critical issues.  It is time for the home performance contractor to push back by offering a viable innovation solution that will result in a truly scalable Energy Efficiency Marketplace.  Please join us in supporting this effort by becoming a member of Efficiency First California and let your voice be heard.  (Comments should be sent to Charley Cormany at ccormany@efficiencyfirstca.org.)