Preliminary Industrial EM&V Results Jennifer Fagan - PowerPoint PPT Presentation

Preliminary Industrial EM&V ResultsJennifer Fagan

June 18, 2009

• Data collection and analysis well underway for both gross and net impact work
• Findings to-date demonstrate there is a fairly significant gap between assumed ex-ante:
• Baseline conditions
• Net-to-gross ratios
• Continuing to find high rates of free ridership for large industrial custom projects as well as for pump-off controller projects

• Efforts to reduce free ridership appear to have been minimal over the 1999-2008 period.
• There are, however, a number of strategies available to mitigate free ridership, which have been recommended in several past evaluations of the SPC program and in the Large C&I Custom Best Practices Report.
• These strategies are in no special order and are offered here as merely food for thought.

• Optimize incentive levels.
• One approach to consider, with care, is increasing incentives for higher payback measures, particularly for emerging technologies.
• A tiered incentive structure, with a lower base incentive level for more common technologies, and a higher incentive level for emerging technologies, would accomplish this purpose
• Implement a minimum payback threshold
• Minimum payback periods of 6 to 18 months are common
• Provide a bonus for first-time participants
• Alternatively, incentives could be decreased for projects that individual customers repeat in the program year after year; this would also encourage bigger projects (with larger savings) upfront.

• Set a minimum percentage for incentive payments.
• The obvious goal of this approach is to draw those into the program who require more than a token incentive level in order to participate.
• Screen and exclude obvious free riders
• Allow the program administrators the flexibility to simply exclude projects from the program that they believe have a high probability of being free riders.
• Customers would still be allowed to participate, however, they would be expected to select an alternative project which they were not already planning to implement on their own

• Encourage greater participation by trade allies at the project identification stage.
• Findings from participant surveys suggest that trade allies play a pivotal role in influencing the customer’s decision to install energy efficient equipment as long as they are involved early on
• Only about one-third of Industrial projects involve trade allies that have been engaged in the project at an early stage
• When trade allies are involved at a later stage, their role is of ‘order taker’ with little or no influence on the customer’s decision to install EE equipment

• Influence customer adoption at the earliest stages of the design process.
• Free ridership can often be reduced by working with customers at the earliest possible point in their equipment- and process-related decision making. In large industrial sector, such early intervention must occur months and often even years before project installation.
• The CEI approach being proposed seeks to accomplish this through formation and use of program-led customer teams which jointly develop ideas for future EE projects.