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>Why Won’t Utilities Pay Homeowners To Cut Use?


Please Pay Me To Use Less EnergyEnerNOC pays companies to cut energy use. Why won’t someone pay homeowners to do the same?

Illustration by Robert Neubecker. Click image to expand.In this project, “The Efficient Life,” Slate has been seeking your best ideas for helping people use less energy at home and save money. You can read Daniel Gross’ explanation of The Efficient Life here, his article about compact fluorescent light bulbs here, his article about utility bills and peer pressure here, his passionate exhortation that you get a home energy assessment here, his speculation about whether we should pay fuel bills in cash herehis annoyance with his vague heating bill here, and his love letter to home insulation here. You can scan all the proposals submitted by readers hereIn the next week or so, Slate will be announcing the top dozen ideas.
Over the last few weeks, I’ve talked to a lot of professionals about things I can do to make my home more energy efficient. The most satisfying aspect has been shelling out a small amount of money to have people come in and make some quick, cheap fixes that will pay dividends. My home energy assessment was heavily subsidized by Connecticut’s energy efficiency fund and was a form of triage. If I want to pursue more serious efficiency, I will need to make significant investments, in insulation, for example. As I’ve been wondering about whether to make that investment, I have been thinking it would be great if there were a private-sector company that could, for little money down, analyze my energy use and set up a system that would help me use less energy—and pay me for doing so.
It turns out there is one—but the catch is that it pitches its services only to businesses.
EnerNOC solutions, which got started in 2003, is a company that has grown rapidly during the recession. Its revenues tripled between 2007 and 2009. (Here’s a recentearnings report.) EnerNOC has a couple of different business models, each of which depends on delivering energy savings to buildings.
EnerNOC’s main line of business is demand response. Utilities like to say that the most efficient power plant is the one that doesn’t have to be built. The theory in the utility industry is that it’s much cheaper to invest in measures that can cut use by 5 percent or 10 percent at peak periods (90-degree days in August) than it is to build and maintain a stand-by power plant that will be called into action a few days per year. Hence: demand response. Utilities negotiate deals with big users who agree to dim lights and turn down air conditioning or heating when called upon. They also pay companies like EnerNOC to do it for them. EnerNOC signs up big users—hospitals, colleges, office buildings—and installs software that analyzes facilities’ energy use and then calculates how they can shed load quickly without disrupting operations. There’s no installation cost for the user. EnerNOC shares with its customers the payments it gets from the utilities just for agreeing to be part of the plan to reduce usage. When customers actually do cut their use, they get additional payments. The demand-response model has proved attractive in a recessionary environment of pinched capital spending. Last year, EnerNOC’s “megawatts under management” rose 73 percent. Its Demand Response program has 2,800 customers and 6,500 sites. Unlike many energy efficiency programs, its benefits are clear and transparent. You get a check merely for agreeing to reduce energy use at certain times.
In order to figure out how buildings might shed demand quickly in peak hours, EnerNOC uses software to analyze buildings’ energy use in microscopic detail. It checks out how much energy each office, hallway, closet, nook, and cranny is using and analyzes the air flow through every piece of equipment.”When we submeter a facility, we can receive 6,000-10,000 data points on a building’s management system in real time,” said Tim Healy, CEO of EnerNOC. “As a result, we can see where air is being unnecessarily moved.”
And this capability has led to EnerNOC’s second main business, SiteSmart. Essentially, EnerNOC sells software that analyzes buildings and generates ideas on how to cut energy use. “We’re selling them software as a service and then guaranteeing that they’ll be able to identify energy savings opportunities worth at least twice what they pay us on an annual basis.” In effect, EnerNOC will contract to reduce energy use by 8 percent to 10 percent and share the savings. Its Web site includes case studies such as Morgan Stanley’s New York headquarters, where it identified more than $100,000 worth of savings “from operational energy efficiencies, such as refining automated schedules to better align with actual occupancy behavior.” (Translation: turning off lights and cranking down the air conditioning when fewer people are around.)
Last year, solutions such as SiteSmart accounted for only 3 percent of the company’s revenues. But Healy says EnerNOC’s approach—for both Demand Response and SiteSmart—have found greater traction in this environment because they offer energy efficiency on the cheap. “Traditional energy efficiency is characterized by big-ticket capital expenditures. You pay a lot for equipment and it takes a few years for the investment to pay back.” Today’s building managers have limited budgets and need to generate savings more quickly to justify investments.
Interesting, right? But how does this bear on my desire to cut my own energy use at home? I’d love it if my utility would pay me to agree to dim the lights, unplug the unused television, and unplug the half-empty wine fridge when they ask. And I’d love it even more if someone could rig up fancy software that would program my heating and cooling systems more effectively. But as of now, EnerNOC doesn’t have a practical application for individual users or for smaller businesses. The electricity load of any given store or home is so small in comparison with overall usage that it doesn’t make much sense for utilities or EnerNOC to target them for Demand Response. And most homes don’t have complex commercial energy systems that could benefit from SiteSmart. But Healy believes that it’s a matter of time. It’s all about data. As appliances, homes, and the grid get smarter, consumers, utilities, and third parties will have much more granular information about energy use. “I think the residential market does look appealing,” he said.
How about you? Are you able to participate in demand-response programs with your utility? Do you know of any third parties that will do for homes what EnerNOC does for large businesses? Please tell me about them in the comments section below.
Or join the discussion
on the Fray

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5-Course Maintenance: Your Home Holiday Meal

Here comes the craziness of the Holidays. It’ll be great to see the family, but you can’t forget your home. Home maintenance is key, especially before winter. You need to make sure that your roof is in good repair, that your windows seal tightly, and your furnace is running properly. Maybe even boost your insulation. To find out what’s best, here’s your Holiday To-Do List.

Easy Home Projects for the Holidays
• Maid Service • Plumbers
• Home Winterization • Handyman Services
• Interior Painting View All Projects

Holiday Home Improvement
A recent ServiceMagic poll of homeowners indicates that home improvement gift giving is on the rise. While power and hand tools top most lists, appliances and even a complete remodeling project are common and creative gifts. How about giving the gift of time this Christmas – get connected to prescreened Maid Services for her or Handyman Services for him.
Jimmy Pace's Fixer Upper
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Jimmy and Contractor Carl compare tools, I mean actual tools, as they work through the latest edition of Fixer’ Upper‘. Good news is that Jimmy discovers he might be spicy enough.
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>Solar Panels


There’s nothing new about solar house panels. They can be used to heat water for the pool or water heater. The cost for our home, some $4,000, has delayed our installation, but maybe it’s not so bad.

By the time we get ready, something new that has been invented will save us a lot of money–or at least be more efficient.

Solar rising
As a result of the oil crises of the 1970s, alternative energy sources, including solar power, received increased attention. From the mid-1970s through the mid-1980s, the solar industry grew from 45 solar collector manufacturing firms to 225 firms, according to the U.S. Energy Information Administration (EIA). During this period, construction began on nine solar thermal power plants, collectively referred to as the Solar Energy Generating Systems (SEGS), in California’s Mojave Desert. These power plants — still the largest solar plant system in the world — were hybrids, using solar energy by day but fossil fuels at night.

In the late 1980s, oil prices fell and remained low through the 1990s — and construction of new solar plants stalled. But more recently, with oil prices soaring past $130 per barrel, solar power has once again become economically attractive. In the United States, the solar energy industry has been growing rapidly since 2003, fueled not only by high energy prices but also by an increased focus on reducing carbon emissions.

They can do it today with mirrors. Some people are familiar with photovoltaic cells. These cells convert sunlight to electricity by absorbing photons from the sun’s rays; the photons kick some electrons loose from atoms of silicon in the cells, and the resulting flow of electrons through the material produces electricity.

Above photo Courtesy of DOE/NREL, Credit – Dave Parsons

The Jefferson County jail in Golden, Colo., uses a parabolic trough solar thermal system to provide hot water to the facility, meeting 50 percent of its hot water needs.

In addition to providing electricity, hot water and heat to homes and businesses, photovoltaic systems supply power to everything from ocean weather buoys and communications equipment to streetlights and satellites.

But cost is an issue: Photovoltaic solar power is still more expensive than electricity generated by fossil fuels, costing between 10 and 40 cents per kilowatt hour, depending on whether it comes from a solar power plant or from cells on a small building. Coal, on the other hand, costs 2 to 4 cents per kilowatt hour.

An innovation to temporarily store the heat, improves on one of solar energy’s primary limitations — sunlight is intermittent. A few plants use insulated tanks filled with molten salt for heat storage, which — although only possible for a few hours — means the plant can still provide power on cloudy days or at night.

See Carolyn Gramling’s article at GEOTIMES