Notes from the Grid Edge: Modern Measurement Can Lead to Better Programs

By: Tim Guiterman, Director of Quantify Solutions

The American Council for an Energy Efficient Economy (ACEEE) and the Northeast Energy Efficiency Partnership (NEEP) EM&V Forum both released papers in December about key trends in the energy efficiency industry, specifically related to the role of information and communication technologies (ICT), data analytics and, software-as-a-service tools for improving program performance with automated measurement.

These two well-respected organizations make it clear that transformational technology and tools have arrived that can unlock a tremendous amount of value for energy efficiency programs. Importantly, even though many of these tools are rooted in the ability to measure energy savings, their uses, and benefits, go far beyond the field of EM&V.  According to the ACEEE, “[b]y incorporating ICT into the design and management of their services, program administrators and evaluators will be able to improve the effectiveness of their actions and reduce their operating costs.”

Furthermore, as the NEEP paper states, “automated consumption data analysis can provide rapid feedback to programs whether or not this analysis is used as the final evaluated savings” [emphasis mine]. This last phrase is worth highlighting, as this topic arises repeatedly in our discussions with regulators, utilities, evaluators, and stakeholders across the country. Not every utility, state, and region is ready, willing or planning to use meter data as part of their formal evaluation regime. Whether this would be of benefit and, if so, when this should occur, is a complex and highly localized conversation occurring across the country. What is important, as ACEEE points out, is that the conversation has no impact on the value that new analytical tools provide to improve program cost-effectiveness and overall performance NOW.

These independent findings from ACEEE and NEEP confirm exactly what we are seeing in the field. Our clients are using Optix Quantify to optimize their programs in several specific ways:

One of our utility clients switched implementers during a program year. The switch was made in April, and by August, Quantify was able to show that the realization rate on projects completed after the transition improved from 44% to 89% (See Figure 1). Without Quantify, it might have been a full year or more before the utility received this information. Instead, this feedback immediately validated the investment in program implementation and enabled our client to set a new benchmark of expected performance for their implementation contractor.

Figure 1. Validating program changes and investments through metered savings

Program-optimization-01-2016-BLOG

Next, program administrators are managing contractors and trade allies with a variety of metrics, but not on the actual savings they deliver to their customers. For example, one client using Quantify discovered that the contractor with the highest volume, and highest expected savings, actually had the lowest actual performance. The savings claimed by this trade ally were simply not being realized at the customer meter (see upper left quadrant of Figure 2 below). Measuring savings at the meter and placing these findings in the hands of the program manager led to immediate corrective action. This benefited the program, the utility and the customers directly.

Figure 2. Assessing contractor performance through metered savings

Contractor-Performance-2x2-BLOG

Additionally, program administrators are using automated measurement data to capture the value of remote QA/QC. This helps drive down the costs of on-site inspections and to uncover issues that compromise program cost effectiveness. One client using Quantify discovered that more than 10 percent of customers in a particular program were receiving rebates for replacing electric furnaces that never existed. Another client is seeking to significantly slash their QA/QC costs by using Quantify to identify the types of projects that most require on-site inspection.

As a final example, continuous and automated feedback on program performance allows DSM program administrators to capture best practices and identify possible savings that are “left on the table.” One of our clients running Quantify identified one of their highest volume measures was achieving well over 100% of the expected savings. This prompted a collaborative conversation with their third-party evaluator to investigate whether additional savings could be claimed from this measure to improve overall program cost effectiveness.

Our clients believe that when things are measured, they tend to improve. The NEEP and ACEEE papers make this same point: automated measurement enables a continuous program improvement cycle, one that promotes effective actions and can directly reduce operating costs.

Energy Efficiency Organizations Outline the Next Generation of Measurement Tools

by: Jake Oster, EnergySavvy’s Senior Director of Regulatory Affairs

Ever since the term “EM&V 2.0” was first coined in 2014, the energy efficiency industry has been debating how the emerging landscape of tools, technologies, and software products will modernize energy efficiency measurement.

Thus far, the discussion has been led by companies that are innovating in this space. But this month, two important organizations published studies on the field of evaluation, measurement and verification (EM&V) 2.0 and made clear to the energy efficiency industry that change is here.

The two papers provide complementary outlines for the near- and long-term applications for EM&V 2.0 tools (also termed “automated M&V” by Northeast Energy Efficiency Partnerships, or NEEP, and “ICT-enabled EM&V” by ACEEE). The near-term analysis is outlined in “The Changing EM&V Paradigm.” A similar paper from the American Council for an Energy-Efficient Economy (ACEEE), entitled “How Information and Communications Technologies Will Change the Evaluation, Measurement, and Verification of Energy Efficiency Programs,” takes a longer-term view of the innovations that will occur as a result of modern measurement tools.

These papers come at just the right time. The growing industry trend toward the use of EM&V 2.0 software tools is gaining traction. The topic has been featured at several recent industry panels and events, including the International Energy Program Evaluation Conference (IEPEC), ACEEE Intelligent Efficiency, and AESP Big Data Analytics Conference.

The passage of AB 802 in California is driving the measurement of energy efficiency to be based on “normalized metered energy consumption,” and this transition will likely require support from EM&V 2.0 technologies.

And in New York, the state commission’s Reforming the Energy Vision (REV) Track One Order states that “advances in technology [can] be used to challenge and enhance our traditional approach to EM&V.” The immediate value of EM&V 2.0 tools is covered in the paper published by NEEP. The report uncovers important findings for utilities and regulators, including:

  • EM&V 2.0 can provide faster measurement, reduce the risk of surprises, and provide opportunities for course correction
  • EM&V 2.0 can support robust and rigorous evaluation
  • Evaluators can validate EM&V 2.0 tools and then find ways to incorporate the near-real-time results into formal evaluations

NEEP makes clear that EM&V 2.0 tools are here to stay and are fast becoming part of the energy efficiency landscape. A growing cadre of data analytics companies are deploying these tools and utilities are increasingly interested in using measurement technology for program management.

Data-analytics-co-NEEP

Source: NEEP EM&V Forum

According to the paper, these analytics tools can provide “[r]apid and continuous feedback to customers and programs on the changes in facility consumption after measure installation.” This collection of program optimization benefits drives better results from energy efficiency dollars.

EM&V 2.0 tools also provide benefits and support to formal energy-efficiency measurement. According to the report, measurement technologies are using established practices, “similar to traditional degree-day billing analyses,” which have been used for years by evaluators.

As evaluators assess the methodology and outputs from these tools, they will continue to develop confidence in the results and rely on those results to support formal evaluation studies. Furthermore, EM&V 2.0 software offers some distinct advantages, such as offering “more thoroughly tested and vetted analytic[s]” and the potential to “reduce the total time required to complete evaluation of a program.”

EM&V 2.0 to enable next-generation efficiency

ACEEE’s report sees the immediate benefits for modern measurement tools and then looks at the potential for the next generation of energy efficiency. According to the report, “The energy efficiency sector will be transformed by the ubiquity of [information and communications technology]. It will simplify the harvesting of savings data, improve the accuracy and timeliness of reporting, and assist in providing context to energy data.”

ACEEE also sees opportunities that will emerge as a result of EM&V 2.0 technologies. As a starting point, the paper recognizes the ability to “measure energy savings with the same accuracy and fluidity that utilities achieve in measuring electricity consumption.”

This has long been a goal of the industry and a hurdle to allowing energy savings to be purchased “as a commodity that can then be traded in regional capacity markets.” In recognizing the capabilities of modern measurement tools, the report authors contend that EM&V 2.0 tools can “increase the volume of efficiency bid into capacity markets and financed by private-sector financial markets,” also a long-sought-after goal for the energy efficiency industry.

Next steps for EM&V 2.0

While practitioners of EM&V 2.0 have been making these claims for some time, these papers provide significant recognition of the value that EM&V 2.0 tools can deliver. NEEP and ACEEE are injecting well-respected voices into an important industry discussion.

The field of EM&V is undergoing inevitable change. According to ACEEE, this will ripple across the structure of the industry. These papers make clear that this evolution should be embraced.

Today, EM&V 2.0 tools are supporting program optimization for utilities, which can lead to increased accuracy and rigor, as well as more comprehensive data to streamline EM&V and support traditional measurement methods.

Tomorrow, they can empower new program designs, increase value for energy savings, and open the door for the emergence of new energy-efficiency devices for homes and businesses.

Designing an Engagement Strategy for SMBs

by Chris Rovillos, UX Designer

Over the years, our utility clients have shared with us the complex challenge of engaging small to midsize businesses (SMB). Accounting for 20% of the nation’s electricity usage but only about 3% of energy efficiency spending, there is a challenging gap to fill. In a well-known Accenture report, 9 out of 10 SMBs say they want more personalized service from their utilities but just 35% say they’re getting it. Engaging SMBs is hard – they’re just too small for utilities to have dedicated account managers. But they’re too big and unique for the type of mass-market programs that serve residential customers.

So we set off to address this challenge. But we had to get it right…

Design is not just what it looks like and feels like. Design is how it works.
—Steve Jobs

User Experience Matters

At EnergySavvy, the customer experience matters. Our online audit for homeowners, Optix Engage Residential, features some of the highest completion rates in the industry—over 90%. One of the key reasons for these high levels of completion is our focus on great “UX,” or User Experience. The Engage survey doesn’t ask unneeded questions or force homeowners to fill out complex forms. Instead, it features bright, colorful icons with simple, easy-to-understand questions.

When we embarked on designing and building Optix Engage for Business, we knew that we had to continue this focus on great UX, while at the same time addressing some of the tough challenges that make SMBs incredibly difficult to engage from a utility’s point-of-view. Over the past couple of months, we’ve talked with owners, operators and managers at more than 20 SMBs across the country from Seattle to New York, California to Oklahoma , asking them:

  • “How do you feel about your business’s current energy usage?”
  • “What currently motivates you to save energy?”
  • “What would make you want to take an online energy audit for your business?”

So, what were our top three takeaways about small to midsize businesses?

1. They’re busy and have little spare time to think about saving energy

Almost all the people at the SMBs we talked with had one thing in common: they’re extremely busy. In the SMB world, owners and operators don’t have the luxury of being able to delegate tasks to other employees in specialized positions: an SMB operator is often the CEO, CFO, and the operations manager.

Not only do SMB owners and operators have a large typical workload; they often are interrupted constantly whether in front of their desk or on on the move via their smartphones and have to respond to endless amounts of “fires” that come up.

One notable example of this was our experience talking with the owner of an auto body repair shop in Long Island, New York. The owner was interrupted more than eight times by other employees during our hour-long interview: from auto insurance people calling in to verify a claim to personnel management issues.

What does this mean? SMBs have little to no time to think about typical utility programs. Many of the businesses we talked with said that most of the mail they receive immediately is thrown away; there are more important things to do.

2. They value saving money, but are wary of offers that seem “too good to be true”

Saving money is high on the list of priorities for SMBs; quite a few of the ones we talked with remarked that they constantly were on the edge of cash-flow issues with maxed out credit lines. When asked about the payback period for capital investments, such as in equipment upgrades or retrofits as part of energy efficiency programs, the majority of SMBs said that a two-year payback period would be the point at which they would consider participating.

One interesting thing that came up was that many of the SMBs we talked with said that they had heard of opportunities to save money from their utility, but they lumped them in with offers about saving money from their phone company. The word “scam” came up a lot when talking to SMBs about these offers.

Somebody came into the store and we thought it was a scam…You don’t want to trust anybody that is just going to walk and do stuff with your business.
—Small business owner

The small business owner recalled a contractor coming in to tell her about a utility’s energy efficiency program.

3. They’re influenced by their neighbors

SMBs don’t necessarily view neighboring businesses (even those in the same industry) as competition. Neighboring businesses can often serve as a vital source of information regarding ideas for efficiency improvements.

For example, an operations manager at a Seattle distillery talked about how he would read tips on which equipment to buy from a web forum frequented by other distillery operators.

How this influenced our product design

We didn’t let the knowledge that we gleaned from SMBs just sit around, though. In a future blog post in our UX series, I’ll talk about how this user research inspired some of the key elements of the design of Engage for Business.

Interested in learning more?

Read more about Optix Engage for Business.

Request a demo.

Subscribe to our blog.

About Chris Rovillos

Chris-Rovillos

A Washington State native, Chris joined EnergySavvy as the company’s second UX designer. He earned a BS in both computer science and human centered design and engineering from the University of Washington. Chris loves music, especially here in his Emerald City hometown.

A New Way to Engage 90% of American Businesses About Energy Management

With deployments at National Grid Massachusetts and Rhode Island, and four other investor-owned utilities launching soon, Optix Engage™ for Business is a digital engagement solution that effectively addresses a hard to reach, but critical customer segment.

E4B-placeit-man-with-iPad-blogSmall and midsize businesses account for more than 90% of American companies, consume about 20% of the nation’s energy, but attract less than 4% of utility energy efficiency spending nationwide according to E Source. And a recent Accenture study showed that while 9 out of 10 businesses want more tailored products and services from their utility, just 35% say they’re getting it.

Why? Small and midsize businesses have often been challenging for utilities to serve: too numerous for dedicated account managers but too unique for standard mass-market outreach.

EnergySavvy announces Optix Engage for Business, a digital engagement solution that connects small and midsize businesses with the right utility customer programs and offerings.

EnergySavvy has worked with hundreds of businesses in an effort to build a solution that addresses their specific needs. Engage for Business supports more than 2,300 business types with a tailored experience. In Massachusetts and Rhode Island, National Grid is supplementing its award-winning small business programs with Engage for Business, achieving early success. About 60% of business customers who start the audit complete it, and 36% convert to utility program leads.

National Grid has made significant commitments to help our customers save money and energy. Working with EnergySavvy enables us to further enhance our outreach and engagement with New England’s small and midsize businesses. The solution is easy, intuitive, and directs our business customers to a personalized set of money-saving opportunities based on their unique business type and premise.
-Ezra McCarthy, Lead Analyst, C&I EE Program Strategy at National Grid U.S.

Engage for Business is seamlessly integrated into EnergySavvy’s Optix Platform, enabling utilities to benefit from the full suite of engagement, program automation and continuous savings measurement solutions.

“We’ve figured out over the last five years how to make home energy audits work for everyday people. This is all about making it easy for small business owners,” said Aaron Goldfeder, CEO of EnergySavvy. “Our passion is to deliver great customer experiences, drive action that improves the utility-customer relationship, and unlock data-driven insights to enable the utility of the future.”

A New Law Measuring Savings at the Meter

 Why California’s New Efficiency Law Is So Important

By: Jake Oster, Senior Director of Regulatory Affairs

CaliforniaLast month the California legislature adjourned, but not before passing a handful of important energy efficiency bills. Among the pile of bills sent to the governor, Assembly Bill 802 passed largely unnoticed. While AB 802 failed to garner much attention, it’s a truly important piece of legislation for those of us on the front lines of energy efficiency measurement.

AB 802 requires the California Public Utility Commission to update the rules for the measurement of energy efficiency so that measurement is based on “normalized metered energy consumption.” At EnergySavvy, we call this “metered savings” and it means measuring what happens at the meter as a result of an energy-efficiency upgrade performed on a home, building or other facility.

Measuring savings in this way involves looking at weather-normalized energy consumption before and after an energy-efficiency upgrade and accounting for the difference between consumption from pre-usage to post-usage. Measuring at the meter, while making adjustments to account for outliers, is important, because it’s a true accounting of how energy efficiency impacts the grid and provides value for ratepayers.

Across the industry, we’re seeing a general shift toward the use of meter data for measurement. Utilities are recognizing that measuring savings at the meter allows many programs to remain cost-effective, and regulators want an accurate accounting of energy efficiency measurement, instead of deemed savings. (Deemed savings are a set of standardized savings values for commonly used energy-efficiency measures that are developed and maintained by state or regional bodies.)

And while in many cases, measuring energy savings at the meter occurs during the course of the evaluation process, it’s groundbreaking to see it codified in statute as a policy mandate for a state. California has a history of leadership in energy efficiency with more than three decades of energy conservation programs, and California is once again leading a change that many states are likely to echo.

As with any policy change, the details will matter. AB 802 requires the California Public Utilities Commission (CPUC) to develop the new measurement standards by September 2016. The CPUC will have to address several issues through the development of the new rules, such as how net savings are measured, how attribution is addressed for complex multi-measure programs and how to account for the persistence of savings. These are all important details that will need to be hashed out by the the CPUC and stakeholders, but starting from a place of measuring savings at the meter is likely to lead to better measurement practices for California’s energy-efficiency programs.

As California is leading the way with new policy, the industry is meeting the challenge with new savings measurement software tools. Often referred to as “EM&V 2.0” technology, savings measurement software is made possible by advancements in cloud computing, parallel processing and data analytics to reduce the cost and time constraints that have traditionally hindered measuring metered savings.

These savings-measurement software tools empower utilities to measure savings at the meter, transmit savings data in a continuous manner and analyze the various factors that drive program performance outcomes to optimize programs.

Policy changes cannot happen in a vacuum. The industry has to be ready to meet the requirements set forth by the California legislature and the CPUC. In this case, modern software is capable of meeting those needs. In fact, while accounting for net savings will be a significant challenge that the CPUC needs to address while writing the new rules for measurement, savings-measurement software can measure net savings through the use of robust comparison groups that span entire service territories.

The arrival of savings measurement software will be a crucial enabling tool to meet the requirements set forth by AB 802.

Measuring savings at the meter is an important stepping stone for the energy efficiency industry. As energy efficiency is called on to address climate change, serve as a compliance mechanism for the Clean Power Plan, and deliver cost-effective savings for ratepayers, we need to measure energy savings in a way that meets those challenges.

Additionally, the growing calls for market-based energy-efficiency programs will require reliable measurements of savings and savings measurement software that can produce accurate results fast enough for a market to find useful.

For all of these reasons, energy-efficiency advocates and industry leaders should be cheering for California and AB 802, and other states should begin to follow the lead of the Golden State. With the recent arrival of savings-measurement software, accounting for metered savings is now cost-effective, simple and accessible. There is no reason why 2016 can’t be the year we move to measuring savings at the meter and capturing the true and full impact of energy efficiency.