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The State of California
This month we are taking a departure from the goings on at the state capital and will instead focus on some events that are occurring across the State of California.
The landscape for energy efficiency incentive programs in California is changing. Late last year, a program in Southern California announced a funding cap for the year 2018. The program implementers anticipated the funds would last roughly 3 to 6 months and then be exhausted. Effectively the program will still exist through the end of the year, but without incentives, it doesn’t have a lot to offer.
PG&E’s Home Upgrade Program Ended
This week, Pacific Gas & Electric announced that they are “sunsetting” the Home Upgrade program. There will be a brief transition period to allow contractors to finish out jobs that are already in progress. After June 2018, all PG&E jobs will need to meet the Advanced Home Upgrade requirements.
It’s easy to read things into these changes and have a “sky-is-falling” perspective. Personally, I see these changes more as adjustments than drastic actions. One thing I think most contractors don’t understand is how much the state is counting on energy efficiency to be a viable solution. We will never meet our long-term energy reduction goals with renewables alone. The state has placed a big bet on energy efficiency, and there are plenty of people working hard to see that it delivers.
Advanced Home Upgrade Program
PG&E intends to use the funds that have been allocated to Home Upgrade to educate contractors and encourage participation in the Advanced Home Upgrade program. Ultimately this will lead to deeper retrofits and increased savings. In short, this means the focus is shifting to support higher quality work and more comprehensive projects. I think most people would agree that this should be the goal. I am not as certain about the intent of the Southern California program.
I think we need to recognize that change is not always bad. These programs are expensive to operate and I think we need to anticipate that from time-to-time they will change. Making adjustments to programs, in order to improve their performance, should be part of the equation. Eventually, the goal is for the market to transform, and flourish, without the need for incentives.
The real key is being flexible so that you can adapt your business to meet the ever-changing energy efficiency landscape in California. Efficiency is a long-term objective and the state of California is all-in. The programs will change and hopefully, there will soon be a time when there is no need for incentives at all.