Re-envisioning Energy Programs for our “New Normal”

The COVID-19 “Pandemic Pause,” along with climate related events, is prompting energy program administrators and regulators to rethink the way they deliver programs. Programs have historically focused on energy efficiency or renewable energy, and mostly measures for buildings and homes, but a new generation of forward-looking programs is needed to address other modern society needs and through a greater range of solutions.

The rationale for expanding and integrating program benefits has never been stronger. Consumers are navigating an ongoing pandemic, persistent climate effects, and the prospect of financial instability—and need healthy spaces and reliable, affordable energy services. Developers and building owners are seeking to avoid risk and invest in marketable homes and buildings. Cities, states, and community choice energy providers are prioritizing decarbonization and the safety for their residents. Utilities are aiming to minimize service disruptions to customers and optimize grid operations.

Energy programs can play a significant role in helping society meet these challenges. Our “new normal” presents new opportunities to evolve programs to deliver important benefits like health, energy accessibility, resilience, and decarbonization. And today there is a greater diversity of solutions to enable these benefits across the built environment—from high performing, low-carbon measures and systems to behavior-based interventions, storage across the meter, electric vehicles, and much more.

Crafting a New Vision to Meet New Circumstances

So, what stands in our way of cohesive programs that simultaneously address energy, carbon, health, and resilience? Energy efficiency and other programs have not traditionally had the immediate drivers or valuation framework to fully re-envision the design, implementation, and management of our buildings and energy systems. This is changing, however, through an evolving industry conversation.

We are acknowledging the risks and potential costs associated with our new normal, as well as the value of advanced buildings and systems (low or zero carbon, healthy, and resilient) in mitigating or minimizing these issues. The National Institute of Building Sciences, for example, explains how building retrofits deliver a 4:1 benefit-to-cost ratio under typical circumstances, which grows to 13:1 in the event of an earthquake or 6:1 in the event of a flood. And according to J.D. Power and Associates, business customers who are aware of energy programs give their utilities higher satisfaction scores as well.

A value stack perspective for energy programs can recognize and even quantify the wide variety of available energy and non-energy benefits shown in the figure above. While important for us all, these benefits and programs support equity and deliver an even bigger “bang-for-the-buck” when they serve vulnerable communities and populations who experience heightened energy insecurity, financial, and health issues as a result of national crises, climate impacts and air pollution.

Yet to access this value, programs must address the practical realities affecting program participants today. For example, how do programs engage businesses that are focused on their bottom-line amidst financial instability or residents who are afraid to let solution installers into their homes? Or, local governments and agencies reallocating time and resources to other pressing matters?

Delivering Proactive, Flexible Programs

Delivering programs that anticipate a broader range of consumer, community, and utility needs and challenges is becoming part of our new normal. As stewards of ratepayer money, some administrators have delivered innovative programs over the past several years to help people recover from California wildfires, east coast hurricanes, and other natural disasters. However, the best way for programs to serve is proactively (rather than reactively) and in a fair and equitable manner.

There is public discussion about whether COVID-19 will drive sweeping energy related relief efforts, similar to the American Recovery and Reinvestment Act of 2009 post-recession funding for clean energy development. Perhaps this vision will materialize, but even without, other long-term policy and regulatory changes will be critical to empower programs to expand their benefits. This “pandemic pause” is giving policymakers as well as program administrators an opportunity to re-evaluate. We anticipate that contributions to the greater society will be an important part of our industry policy progress.

In the immediate term, there is still much we can do within existing regulatory program frameworks to innovate. We are seeing many program administrators build upon their existing energy public-purpose programs with incremental effort—for carbon, healthy, and resilience solutions. The most successful programs for our new normal anchor on three principles:

Customer Service
More than ever before, lasting and trusted customer relationships are essential to program success. People navigating difficult circumstances have unique needs and programs must speak their language. The award-winning Advanced Energy Rebuild (AER) Program, from Sonoma Clean Power and Pacific Gas & Electric, is an exceptional example of a program with every element of its design aimed at helping customers recover and rebuild after losing their homes in California wildfires. The program provided hands-on, sensitive support—working with customers throughout the project lifecycle to minimize their burden and customize solutions. Incentives are also paid 50% upfront, to help homeowners cover ongoing construction costs. And the program extended its impact by provided training and professional development opportunities for the local building workforce, supporting the industry in a more wholistic shift towards efficient, resilient homes.

Marin Clean Energy’s Energy Storage Program is another creative example of a behind-the-meter approach to deliver energy resilience and decarbonization for customers facing power shut-offs and climate effects. It also prioritizes storage for low-income and other vulnerable populations—an important part of maximizing the program’s value.

Health & Safety
Due to COVID-19 physical distancing, digital solutions are becoming a minimum requirement for safety, while also reducing program administration costs. Virtual inspections and “contactless” tools like online applications, web portals, and advanced videoconferencing capabilities are now a foundational element of many programs. For instance, many of our clients have transitioned to remote audits and project inspections, using customers’ smart device to visually check for building design characteristics and safe operations. Another one of our clients offers residential customers the option to secure energy efficiency kits through the mail.

Program outcomes are also trending towards health and safety. The AER Program, for instance, promotes fire-retardant building materials to mitigate risks around future wildfires and also provides customers the option to reduce their homes’ carbon emissions through electrification, solar with battery storage, and electric vehicles. The Energy Trust of Oregon’s EPS New Construction program is another example of a program prioritizing resident health—through use of whole house ventilation systems that act as lungs for homes, bringing in fresh filtered air at a consistent rate to replace stale air and remove excess moisture, for example from cooking or bathrooms. This approach promotes healthy, comfortable homes that use less heating and cooling energy.

Agility
While programs should be proactive, some circumstances will remain unforeseen and programs must be able to flex and pivot appropriately. One recent example was NYSERDA’s response to COVID-19 by increasing the number of incentive payments for customers. Other programs are also taking advantage of empty businesses and schools to begin capital improvements early and using slower production cycles in manufacturing and warehouse facilities to implement equipment improvement or perform testing.

Outside crisis response, program agility in times of stability can still help utilities and other administrators meet new or multi-faceted goals. The Tennessee Valley Authority (TVA), for example, transitioned the focus of its EnergyRight® Solutions for Business and Industry from a highly effective energy efficiency program to a program solely focused on beneficial electrification in 2019. Today TRC is working with TVA to respond to the impacts of COVID-19 by providing resources and support that directly helps to mitigate the impacts of the virus throughout the Tennessee Valley.

Pacific Gas & Electric also found favorable grid load shapes due to advanced envelope and thermally efficient design in its long-running California Advanced Homes Program. Last year thousands of high-efficiency homes, designed and built as a result of the program, have shifted the load curve especially in the hot Central Valley climate, helping relieve steep demand ramps the utility was facing.

Towards a Better World

Amidst real challenges, it is also a hopeful time for energy transformation. We are working together as an industry and as communities to re-envision the next generation of smart, caring and cost-effective energy programs. As just one example, TRC has created an Integrated Demand Side Management (IDSM) Working Group which today raises the bar on programs that deliver multi-benefit distributed energy resources (including energy efficiency) to satisfy the needs of consumers, utilities, systems, and society. We are optimistic that through our combined cross-industry efforts, we will evolve from our new normal to an even better world.