Thursday, April 28, 2011

Only the Worst Need Apply

Last week, I had a home energy audit conducted as part of the Clean Energy Works Oregon program. Although this energy program is not directly pertinent to ADUs, I was so impressed by the audit and the program overall, that I feel compelled to write about it.

Several years ago, in Washington DC., I managed to get a free home energy audit through a local grant-based, energy efficiency program. The DC home energy audit was not helpful at all; their findings did not result in me making any changes to my home, due to the program's inability to intelligibly convey the home energy loss findings to me, or to offer me any compelling financial incentives to take action. In contrast, this Oregon-based program is run brilliantly and it truly deserves a national spotlight.

I'll caveat this post by saying that I have not yet gone through the whole program, but my first 'touch' with the program has been fabulous.  If nothing else comes from the program other than the free audit that they conducted (which they value at $500) and the ten free CFL's, it was still totally worthwhile.

The Life Cycle of Clean Energy Works program funding 

You should visit their site for an authoritative overview of their brilliant program. But, here's my layman take on how it works:

The major power/gas providers tack on 3% to their customers' home energy bills; that 3% levy is pooled together and administered by the Energy Trust of Oregon, whose mission is to reduce the region's energy demand. This demand-side reduction ultimately saves the major energy providers (NW Natural, Pacific Power etc) from the costs of having to build another expensive power plant to meet the region's ever growing energy demands.

The Energy Trust doles out this money via incentives and programs to homeowners whose homes need energy improvements. In the case of the Clean Energy Works Oregon program (CEWO), one of Energy Trust's partners; you have to apply to get into the program, and only the big, old, clunky, under-performing homes are admitted into their program (thus, the title of this blog post).

Energy Trust sets the homeowner up with a local, small-business, weatherization contractor, who audits and assesses the home, and provides a bid to do the work to improve the energy performance of the home. The contractor gives a scope of work and a bid to the homeowner. The homeowner reviews the scope of work that they wish to complete with an "energy advocate" from CEWO. Then, they select a scope of work, presumably based on the bid and the likely payback period (let's say this scope amounts to $10K)

The contractor initially fronts the capital to do this work, and when CEWO says that the home improvements are complete, the contractors are paid ($10K) by a partner bank for the work. The bank then turns this capitol expense ($10K) into a 5.9% interest, 20-year loan, that the homeowner then pays back through a extra add-on expense in their monthly energy bill (~$50/month). The monthly loan payments are incorporated into the homeowner's energy bill, which makes the the loan repayment administratively simple for the homeowner (since I pay through autopay, for example, I'll never have to lift a finger to pay off the CEWO loan).

The weatherization work that has been performed on the home by the contractor will result in a lower montly energy bill. Ideally, if the contractor performs inexpensive weatherization improvements, such as air sealing and insulation, the monthly energy bill will be reduced by a dollar amount similar to the loan repayment amount. Ideally, this would mean that the homeowner would pay no more on a monthly basis than they would have paid on their monthly energy bills in the first place.

So, instead of paying $50 extra in my gas bills each month because home is poorly insulated, I'll instead pay $50 a month towards the cost of those weatherization improvements over the next twenty years through a monthly loan. (Presumably, as energy costs increase, this 20-year $50 loan repayment rate will be proportionally less expensive than the cost of inflating gas and/or electrical prices. In ten years, my wasted energy may have gone from $50/month to $100/month, for example) 

Furthermore, if a homeowner achieves 15% energy gains after going their program, CEWO gives the homeowner a $1,500 cash incentive. If you achieve a 20% reduction, you get $2,200. And if you achieve 30% in reduced energy consumption, you get $3,200K. Note that these incentives are not based on how much the homeowner spends on weatherization, but rather on how effective the improvements are at reducing home energy use--a crafty performance-based criteria.

The Audit

The audit that was done on my home lasted four hours; the inspections were extremely thorough. The weatherization contractor spent an hour on each floor, including in the basement and the attic. He conducted a blower door test, which in itself, is a service that would normally cost over $100 to administer. He found that the building envelope was 21 ACH @50 Pascals (they could only pressure it to 35 pascals before the blower maxed out). They estimated that the home gets one air change per hour under normal pressurization. For you non-energy geeks, that means that my house leaks like a sieve.

My leaky-sieve-of-a-house is THE target house for the Clean Energy Works program. For a house as leaky as mine on a gas combustion furnace, there's lots of low cost fixes that could reduce my energy load and monthly bill considerably. Their audit, model, and my gas bills, indicate to them that I have the potential to reduce my home's energy use by 33% by going through their program.

My Review of the Program

In my mind, from a policy perspective, the best benefit of this program is job growth opportunities for small businesses who do weatherization/energy conservation. The contractor who did my home audit owns his business with his wife and they employ one or two others for some jobs. Many of the contractors in the program are small businesses like his.

The Clean Energy Works of Oregon program is exactly what the doctor ordered. The US desperately needs job growth, it needs to stop wasting 30% of its buildings' energy use through careless building design, and it needs to find more creative ways to fund distributed micro energy-conservation projects like this. Citizens are eager to have an opportunity to be part of a solution to address a problem that is bigger than any one of us alone.

I have heard two valid criticisms of the the Clean Energy Works program, and there may be others:
  • This 3% energy levy is a regressive tax that impacts poor homeowners/renter more than wealthy homeowners/renters. In other words, just like other citizens in the region, the region's poorest residents are subsidizing Clean Energy Works program participants. However, unlike the median and upper income residents, they are likely not the beneficiaries of this levy.
  • Weatherization contractors may or may not have the capital to front the cost of expensive repairs for a homeowner in the program. This capital expense (up to $30K sometimes) is too large for some small businesses to afford, pricing them out of the program.
All in all, this is one of the most brilliant and holistic energy programs in the country and it is a pleasure to be a participant in it. My leaky sieve wants to express its gratitude as well.

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