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ENERGY CONTENTS ENERGY I N T E L is produced by: INTEL 02 Association of Energy Services Professionals 04 08 15215 S. 48th St., Suite 170 Phoenix, AZ 85044 Two Years With E ective Compliance, Consumer Marketing: (480) 704.5900 (1,051,898.4 Minutes) Appliance Standards Meeting Your Customers AESP.ORG of Adaptation, Invention, Can Lower Emissions Where They Are and Resilience and Save Energy EDITORIAL TEAM BY JENNIFER ROSENTHAL BY RAEGAN BOND BY ROXANE LE CORRE, Ian Motley, Manager, KATE DOVALE, JULIE BIRCHFIELD Marketing & Communications 11 AND KYLE BOOTH Chris Baggett, APS Jeff Ihnen, Michaels Energy 14 17 Greg Wikler, CEDMC Breaking Out of the Why Building a Great You Already Have My GRAPHIC DESIGN Net Savings Box Customer Experience is Key Thermostat, Now You to the Success of Demand- Want My Car Too? Angela Payton, Splash Printing & Marketing BY JEFF INHEN AND JAKE MILLETTE side Management Solutions BY HILARY POLIS AND AESP STAFF BY ALYSHA D’SOUZA STACIA DREYER Jennifer Szaro, President & CEO 21 23 Suzanne Jones, Chief Operating Officer Shannon Britton, Vice President, Supporting New York’s Creating Internet-Enabled Finance & Member Services Small to Medium- Thermal Batteries Amber Stewart, Director of Content Sized Businesses in Through Retrofit Water Ashley Wilson, Director of Membership A Time of Need Heater Controllers Jennifer Lee, Program Manager Ian Motley, Manager, BY SHAUN HOYTE AND BY WESLEY WHITED Marketing & Communications ASHLEY NICHOLLS Amelia Hall, Training Manager Anastasia Claxon, Marketing Coordinator Kristi Hewitt, Member Associate/Executive Administrator BOARD OF DIRECTORS Marie Abdou, National Grid Ariana Arguello, FortisBC Dave Backen, Backen Consulting Chris Baggett, APS Peter Banwell, ENERGY STAR®, US EPA Raegan Bond, Dunsky Energy + Climate Advisors (BOARD CHAIR) Knox Cameron. DTE Art Christianson, The Home Depot Charmaine Cigliano, Orange & Rockland Sarah Colvin, Opus One Solutions William Ellis, Pepco Mark Gentry, CLEAResult Sue Hanson, Tetra Tech Jeff Ihnen, Michaels Energy James Linder, TVA Danielle Marquis, Franklin Energy Sherry McCormack, SWEPCO Tim Michel, PG&E Bill Norton, Opinion Dynamics Laura Orfanedes, ICF Quinn Parker, ENCOLOR Brian Pippin, JEA Laura Schauer, ILLUME Advising Katie Vrabel, Buckingham Companies All rights reserved. Contents may not be www.aesp.org | fourth quarter 2021 1 reproduced by any means, in whole or in part, without prior written permission from AESP. The opinions expressed by the authors do not necessarily reflect those of AESP.

Two Years (1,051,898.4 Minutes) of Adaptation, Invention, and Resilience By Raegan Bond, AESP Board Chair (2020-21); Partner, Dunsky Energy + Climate Advisors When I took over as Chair of the Board • Be the preeminent clean energy education leader of AESP in 2020, I knew my two-year term was going to be challenging... • Thoughtfully expand content beyond energy efficiency The Board was recruiting a new CEO to replace John Hargrove after • Increase content depth and quality his retirement, we were scheduled to update our tri-annual strategic plan, and we had plans to make some significant shifts in our traditional • Better integrate chapters with headquarters conference offerings. These things did all happen, but the biggest challenge over the past two years, has of course been COVID-19. • Increase membership breadth and depth When Bill Norton (AESP Chair, 2018-19) and I performed the • Retain existing membership ceremonial “passing of the gavel” at the Annual AESP Conference in February 2020 in Anaheim California, COVID was only just starting to • Demonstrate member value touch down in North America. None of us could have imagined what was yet to come. I certainly had no idea that the conference would be Despite the incredible challenges presented by COVID – transitioning my last trip outside of Canada for nearly two years. to online events, members having to furlough their staff, and so much more – we made significant strides with several of these goals in 2021, While my tenure as Board Chair during a global pandemic has particular in the areas of membership and education. presented some enormous challenges, it has also been incredibly rewarding. I am so proud of the AESP staff, led by our CEO Jen Szaro, and Creating a More Inclusive Membership Structure the AESP Board of Directors for their tireless efforts throughout the last two years. While there are surely some ‘battle scars,’ AESP has not only Possibly the single biggest structural change we have made this year survived the pandemic (which is a huge feat for a non-profit association), at AESP has been to adjust our group membership structure. Gone are but we have continued to develop and make investments to grow and the days of having to track and use points to provide AESP membership better serve you – our community of clean energy professionals – for to specific individual employees within your company. Under our new many years to come. group membership structure, all your employees can now become AESP members through our new membership offerings! Our new, In our 2021-2023 Strategic Plan, we developed seven key goals to very competitively price membership categories include local/state steer the Association’s efforts, to cultivate our community and to serve governments ($750), non-profits ($750), public power utilities ($1,000), our members. Our goals are to: co-operative utilities ($500), and various corporate tiers that provide greater coverage choice. While membership fee structures may not seem like an overly exciting thing to highlight in an article like this, I feel strongly that we have made an important and strategic change. Our mission at AESP is to be “a dynamic community of energy professionals dedicated to advancing 2 Association of Energy Services Professionals

the industry through professional development, DEI Foundational Statement an individual’s gender, race, religion, networking and supporting for a resilient, ethnicity, age, sexual orientation or sustainable energy future”. To fulfil this mission, The Association of Energy Services identity, education or disability, everyone we must be inclusive in our membership and Professionals (AESP) is committed to a who engages with AESP should feel expand our reach. We want all organizations framework for change that will eliminate valued and respected. We will make every that are contributing to the clean energy barriers and challenges in our operations effort to identify and respond to feedback transition to feel welcome and to become a to ensure we protect minorities who may to continuously improve our practices and part of our community. be under-served and under-represented. remove barriers to inclusion. No matter We will ensure that our actions, policies who you are, you should feel like you are Diversity Equity and Inclusion and practices are free of deliberate or welcome and belong at AESP. (DEI) Council unintentional barriers so that no one is disadvantaged. Without regard to Thank You Another important change we made to our organization this year was the establishment of • Led the development of two DEI-focused I would like to thank my fellow directors on the Diversity Equity and Inclusion (DEI) Council. education sessions at the upcoming the AESP Board for their incredible support, Launched in March 2021, the DEI Council is Annual Conference in February 2022. humour and patience during the past two comprised of members and representatives years, as well as the entire AESP staff – a small from AESP’s Board of Directors who have Our new membership structure and our but mighty team that is passionate about our a dedicated interest and commitment to DEI council are fundamental shifts in how industry and our members. furthering diversity, equity, and inclusion and AESP is organized and how we operate. I am AESP’s role on the issues. hopeful that they will help us reach our goal I would also like to thank all our members of broadening our community of clean energy who have stayed with us, or rejoined us, AESP is committed to promote diverse professionals and deepening our relationship during the pandemic. We are grateful to have perspectives and ideas while developing with our members. you in our community and cannot wait to see a framework for change that will eliminate you in person again soon! And for those of barriers and challenges in our operations, And So Much More… you that are not currently a member (due to within the membership, and the industry COVID or any other reason), we look forward at-large. Our mission is to ensure we provide In addition to these foundational changes, to welcoming you back when the time is right. equal opportunity, access to and participation the AESP team has been updating and in member programs and benefits. We launching new content delivery channels The future is bright for our industry and our envision an organization where our actions, (Energy Beat Podcast, Energy Feed newsletter, association, and I look forward to continuing policies and practices are free of deliberate Energy Intel quarterly digital magazine) and to be a part of both. And I look forward to or unintentional barriers so that no one is delivering a significant amount of training (fingers crossed!) taking my passport out for disadvantaged. (launched 11 new asynchronous online training the first time in two years and seeing you courses and delivered 24 online instructor-led all in Nashville at AESP Annual Conference, Our strategy is to first look inwards – at AESP courses). February 7-10. as an organization. With less than a year under their belts, the DEI Council, hit the ground Our association is focused on cultivating a About the author running. So far, the Council and/or Board of community of clean energy professionals. Our Directors have: objective is to remain relevant to our members Raegan Bond throughout their entire careers and to provide • Developed a foundation statement to the development support they need at each Raegan Bond has 20 years guide our DEI efforts stage - training, networking, mentoring, and of leadership in Demand executive leadership. In early 2022 we will be Side Management (DSM) • Developed initial working definitions of launching a very exciting online career map planning, program design diversity, equity and inclusion (and noted tool which members can use to create their and implementation. that these definitions will likely evolve over own customized career development plan. With work experience in time) the private, public and In 2022 we will continue to thoughtfully utility sectors, Raegan • Reviewed charters for all AESP committees expand our technical content beyond our roots brings a proven ability and made recommendations for of energy efficiency and demand response. to understand and bridge perspectives among diverse adjustment We recognize that conversations are shifting stakeholders and to build common ground. She is a from energy to climate, and that traditional strong advocate of evidence-based decision making, • Initiated a review of AESP functional areas silos (e.g. demand vs supply, efficiency vs inclusive strategic planning and rigorous program to provide suggested DEI improvements fuel switching) are breaking down. There is a performance management. A recognized leader in to the organization. Areas being reviewed desire for integrated and holistic dialogue and energy efficiency, Raegan is currently Chair of the include peer engagement, marketing solutions. AESP is on top of these industry Association of Energy Services Professionals (AESP) and communications, human resource trends and we will be there with you, our which represents over approximately 2,000 DSM management, board governance, members, as the sector evolves. professionals across North America. membership and events. DEI Council Members • Ariana Arguello, FortisBC • Pamela Fann, SEEA • Jasmine Johnson, Sparrow Energy Services • Knox Cameron, • Elizabeth Freeman, DTE Energy Nexant • Quinn Parker, ENCOLOR • Robin Clark, ICF • Antonia Ornelas, • Sam Ross, Optimal Energy • Scott Alan Davis, Elevate Energy • Lynn Roy, BrightLine Group SEEL, LLC www.aesp.org | fourth quarter 2021 3

With E ective Compliance, Appliance Standards Can Lower Emissions and Save Energy By Roxane Le Corre, Kate DoVale, Julie Birchfield and Kyle Booth As more states move toward lower emission targets, many have under consideration in another five. While these bills are an important recently enacted appliance standards bills or introduced legislation step towards decarbonization, the best way to achieve desired savings to achieve large-scale energy savings and greenhouse gas (GHG) is to look holistically at all delivery channels for energy efficiency. These reduction. This type of legislation is critical to driving energy savings include existing energy efficiency programs (EEPs) and compliance necessary to meet states’ emission reduction targets. Appliance programs (CPs). Coordination between EEPs, standards development, standards raise the baseline efficiency requirements on energy- and and compliance will help ensure that these delivery channels are water-using appliances, contributing to energy efficiency by phasing out maximizing impacts by working with the market to transition from inefficient equipment. At the same time, ensuring these standards are programs to standards. cost-effective to consumers is important in promoting equity. Successful implementation is therefore crucial to meeting goals. Standards are only impactful to the extent they are adhered to, and compliance is a critical element in achieving these savings. However, State appliance standards regulate products for which there are no compliance rates can vary depending on the product, the compliance existing national standards and can therefore vary on a case-by-case enforcement process, and the budget dedicated to compliance basis. Each individual state is responsible for defining and passing such improvement. This type of low compliance means missing out on the legislation, promoting compliance, and determining mechanisms for intended energy savings of the standards, which can lead to unintended enforcement. To date, legislation around appliance standards has been consequences that miss further opportunities for energy savings. implemented in 17 states and the District of Columbia and legislation is 4 Association of Energy Services Professionals

One of those unintended consequences relates to energy efficiency Compliance programs already play a role in driving the successful programs. These programs are key to driving state energy savings implementation of appliance standards in some states. California has targets and market transformation through rebate programs that been a leader in adopting appliance standards and has been able to encourage the sale, stocking, and purchase of more efficient appliances. explore best practices to help ensure that its regulation is having the As more consumers seek out and purchase efficient equipment, intended effect. For the past two decades, the state and its utilities have distributors will be more likely to stock this type of equipment. Rebates developed an approach to promoting and improving compliance with therefore play an important role in accelerating sales, phasing out California’s Appliance Efficiency Regulations (Title 20) which can inform inefficient equipment and establishing the market conditions that enable future CPs. Additionally, the Northeast Energy Efficiency Partnerships standards to ultimately be passed. Under traditional efficiency program (NEEP) has been working to support compliance improvement in design, when standards become effective, the performance baseline for multiple states by creating frameworks for such programs. There are appliances eligible for rebates shifts, with products previously eligible other tools states can use to ensure that they are paving the way for for incentives now becoming standard. EEPs therefore pave the way successful new standards. These include compliance programs and for appliance standards to be effective, driving market transformation existing EEPs, adapted as needed to support the market transition to activities that are codified through state appliance standards. One of standards compliance. Coordination between all delivery channels for those unintended consequences relates to energy efficiency programs. energy efficiency will be the most effective means of driving intended These programs are key to driving state energy savings targets and energy savings. market transformation through rebate programs that encourage the sale, stocking, and purchase of more efficient appliances. As more consumers seek out and purchase efficient equipment, the more distributors will stock this type of equipment. Rebates therefore play an important role in accelerating sales, phasing out inefficient equipment and establishing the market conditions that enable standards to ultimately be passed. Under traditional efficiency program design, when standards become effective, the performance baseline for appliances eligible for rebates shifts, with products previously eligible for incentives now becoming standard. EEPs therefore pave the way for appliance standards to be effective, driving market transformation activities that are codified through state appliance standards. However, failure in standards compliance can result in missed energy saving opportunities. In such instances, noncompliant appliances remain available for purchase even after incentives for more efficient products are removed, so the effective price for compliant, energy-efficient appliances rise as consumers are no longer able to take advantage of program dollars. Customers continue to look for the most affordable option, so distributors revert to stocking noncompliant, less efficient budget appliances to meet this demand. This can reverse energy savings previously achieved by EEPs and make the savings anticipated by the new legislation difficult to achieve. Figure 1: Screenshot of Website Recent surveys of commercial foodservice equipment dealers in both California’s Title 20 Compliance Washington and Massachusetts illustrated this scenario. The surveys Improvement Program found that these market actors are unaware of upcoming standards, do not anticipate being penalized for noncompliance, and will likely revert The first Title 20 standards became effective in 2003, but it wasn’t to selling noncompliant, less energy-efficient equipment if rebates are until 2018 that the California investor-owned utilities recognized the no longer offered. Sales from out-of-state or online marketplaces also opportunity for compliance improvement. The utilities identified two present challenges with compliance, and manufacturers operating on a necessary elements to improving compliance: providing easy to national level are likely to continue producing noncompliant equipment, understand, on-demand information and conducting effective, ongoing given that standards vary between states. outreach to increase awareness and understanding of the Title 20 compliance process. In 2008, the Energy Code Ace program was launched to provide compliance support to manufacturers, test labs, third-party certifiers, distributors, retailers, and equipment installers, for high impact standards including lighting, pool pumps, and computers and monitors. A combination of tools, training, resources, and outreach are key to achieving high compliance rates. Market actor feedback was used to develop a user-centered approach, including: • Interactive tools that make it easier for users to navigate the code language, www.aesp.org | fourth quarter 2021 5

• On-demand trainings that help users understand how to National Appliance Standard certify products, and Implementation E orts • Resources that provide information on Title 20, the Many states have adopted standards that align with compliance process, and the technical requirements of California and are able to use the Modernized Appliance the standards. Efficiency Database System (MAEDbS) to verify compliance. However, for adopted standards that don’t align with These offerings now help ensure the success of Title 20 California, there has not been a mechanism to verify standards. However, on-demand support alone is insufficient compliance. To bridge this gap, NEEP is developing the State and should be coupled with market engagement. Appliance Standard Database (SASD) and an implementation toolkit. When it becomes publicly available in January Successful outreach is the product of ongoing, consistent 2022, states can use the SASD to verify compliance. The relationship building. Energy Code Ace builds trust and implementation toolkit will help states effectively enact their communication pathways with market actors through direct standards so that they reap the full benefits. This toolkit will outreach via phone or email, at conferences and events, and include information on how to define their compliance and through industry associations and networks. enforcement process as well as outreach best practices. This kind of investment establishes the foundation for successful Before a standard becomes effective, outreach is appliance standards in the future. targeted towards manufacturers to ensure that they have the knowledge they need to test, mark, and certify their Strategies for Successful Appliance products. After a standard becomes effective, outreach Standard Implementation is targeted towards distributors, retailers, and installers to ensure they understand how to verify that products are States and utilities can leverage a suite of strategies compliant before offering them for sale. to move the market towards compliance and obtain the intended benefits for new standards. These include a focus Additionally, market actors can directly communicate with on existing efficiency programs, compliance surveys, and the Energy Code Ace through the Title 20 email account, where implementation of compliance programs. These strategies they can ask technical questions regarding requirements for are best approached in coordination. performance, testing, marking, or certification. To alleviate obstacles and potential delays in compliance, it is critical for Existing EEPs states to have technical experts available to answer market actor questions in a timely manner. Energy efficiency programs are an important tool for market transformation through incentivization and therefore Over time, California has been able to establish a strong play an significant role in the lead-up to standards becoming compliance improvement program, which has taken time, effective. The more established the program, the more resources, and funding. Although the budget for standards likely that compliant products are already being stocked implementation might vary, to ensure high compliance by distributors when the standard becomes effective. It is the most basic, critical component that every state should therefore crucial to continue to implement and even grow budget for is outreach. these programs as a means of preparing the market for upcoming changes. In anticipation of these changes, utilities can also expand their measure offerings. This could include adding tiered rebates to their programs to incentivize the highest efficiency equipment and adding new measures that remain unregulated. All of this will facilitate a managed transition, setting up EEPs to continue transforming the market once new standards are enacted. Utilities should also adjust their baselines for energy efficient equipment by tracking compliance rates and continue to provide rebates that shift the market towards alignment with new standards, while compliance training programs lay the groundwork for compliance. Utilities can then transition away from incentivizing measures that meet state standards over time, as compliance increases. Market compliance surveys To understand the likelihood of market actors complying with new standards, states and utilities can conduct surveys through existing market relationships to obtain accurate insights. These surveys can indicate levels of awareness of the standards, expectations around enforcement, and whether intentions around stocking account for the new standards. Utilities who run EEPs are uniquely positioned to accomplish this, as program outreach establishes trusted relationships across the market. 6 Association of Energy Services Professionals

Compliance programs About the authors Compliance programs are one of the most effective ways for states Kate DoVale to ensure that they are establishing frameworks for their appliance standards to achieve desired outcomes. These can prepare the Kate is a Project Manager on Energy Solutions’ Policy market by raising awareness of upcoming standards, providing and Ratings team. She leads the Statewide Utility tools for market actors to identify compliant products, and offering C&S Program’s Title 20 Compliance Improvement supplemental educational resources. Targeted communication subprogram, which aims to garner energy savings is an essential first step, and the implementation toolkit created by increasing compliance rates with California and by NEEP can serve as a good starting point for anyone looking to federal appliance efficiency standards. Some of define a compliance improvement program. The California Title 20 her responsibilities include supporting outreach Compliance Improvement program, detailed previously, can also campaigns, developing resources, and coordinating serve as a model. research, data analyses, and impact modeling. Additionally, Kate supports several projects that assist states in adopting and implementing appliance standards. Tactics to consider for such programs include: Kyle Booth · Manufacturer and distributor outreach – Increases awareness of the standards and their role in the compliance process. Mr. Booth is a member of the Boston, MA Energy Without this basic information, compliance will be low. Solutions team. He acts as the engineering lead for Energy Solutions’ point-of-sale foodservice programs · Educational resources – Helps support clear, consistent as well as the MA, NH, and RI Upstream C&I Water messaging for market actors understand and execute their Heater Initiative. He led development of the controlled responsibilities in the compliance process. environment horticulture measure proposal for the CA 2022 Title 24, Part 6 code cycle. He has led the · Market studies – Provides insight into how widely available development of market research reports for several noncompliant products are, both before compliance technologies, including heating equipment, chillers, improvement activities are initiated and afterward, and will serve heat pump water heaters, and PEI-rated pumps. He works on several M&V studies, to inform necessary next steps. including a foodservice electrification impacts monitoring study and an emerging technology monitoring study on adaptive daylighting controls for greenhouse Comprehensive and effective compliance programs take time supplemental lighting. Responsibilities include calculating program energy savings, to establish. The priority for such programs should be targeted evaluating technical reference manual assumptions, evaluating and recommending communications to raise awareness of the standards and provide new measures, and reporting program progress. Prior to joining Energy Solutions, knowledge of how to comply. Mr. Booth was the Engineering Team Lead for EnSave, Inc, a national agricultural energy efficiency company. Mr. Booth received his Bachelor of Science Degree in Combined efficiency and compliance programs Mechanical Engineering from the University of Vermont. Mr. Booth is a licensed professional engineer in Vermont, Alabama, Kentucky, and Oklahoma. Full market transformation potential is enabled when appliance standards are implemented in coordination with market-based Roxane Le Corre programs. While EEPs pave the way for the standards by moving the market and CPs drive the market toward compliance through Roxane Le Corre is a Project Manager in the Energy training and resources, the two can be most effective when Efficiency department at Energy Solutions, where harnessed to common energy and GHG savings goals. she supports California Midstream Foodservice Programs. Some of her activities include program Conclusion outreach and supporting the management of marketing campaigns. She comes to Energy Given the proper resources and strategy, appliance Solutions with 5 years of experience as a relationship standards can achieve large scale energy savings manager, project manager and communications and consequent GHG emissions reduction. Working expert in tech and UX design. Roxane received her with the market to support compliance through Bachelor of Arts in English Literature with a minor in resources and education helps make the most of Political Science from McGill University in 2013. appliance standards and prevents the unintended consequences of low compliance. States planning Julie Birchfield compliance and enforcement efforts can make use of the NEEP toolkit to support the development of Julie Birchfield leads the development of Energy CPs and ensure their standards effectively transform Solutions Energy Efficiency Team as a Product the market. Existing CPs such as the California Title Manager. Julie has over 12 years of experience 20 Compliance Improvement Program can serve working for utility companies Demand Side as examples for future programs. States that are Management Programs. She is an expert at leading considering appliance standards can coordinate efforts to improve efficiency and coordinating with their efficiency programs with compliance education teams for the development of innovative solutions to smoothly transition the market from incentivized and achieve efficient operations. She is armed with to codified measures. There are strategies available organizational, communication and interpersonal to meet states wherever they are in the process - skills. Her responsibilities at Energy Solutions include developing value from starting to think about standards to improving propositions, anticipating client concerns and questions, journey mapping compliance with existing standards. and designing new products. Julie is a Certified Energy Manager. www.aesp.org | fourth quarter 2021 7

Consumer Marketing Meeting Your Customers Where They Are By Jennifer Rosenthal, E ciency Project Manager, TRC Residential energy efficiency programs continue to rely on an old standby – efficient products – for a significant share of energy savings goals. What’s changed is the method of engaging customers. To drive participation, EE programs are evolving to connect with customers where they are and provide value when and how they want it. Case Study: NIPSCO’s Online The marketplace provides an instant discount on energy-saving Marketplace products that are shipped directly to the customer’s home. These measures are discounted with the NIPSCO incentive to reduce the out- The incentivization of energy efficient of-pocket expense. The program’s intent is to help remove the financial products is a mainstay of residential barrier associated with the initial cost of energy-efficient alternatives. demand side management programs, and for Northern Indiana Public Service This shift reduced barriers to participation, and provided three key Company (NIPSCO), this is no different. benefits to customers: Serving more than 821,000 natural gas customers and 468,000 electric • Speed and convenience: rather than the old model of purchasing a customers across the northern third of product and waiting for an inventive check, the marketplace allows Indiana, NIPSCO offers incentive programs customers to get an instant discount on energy efficient equipment. to achieve energy savings goals. NIPSCO’s The waiting and application paperwork are removed from the Residential Energy Efficiency Program, process. implemented by TRC since 2017, offers financial incentives for both electric and gas energy-saving measures, products • Reduced upfront cost: having to put down the full product cost programs, assessment programs, educational, behavioral and no-cost upfront has been a historical barrier to participation. The marketplace income-qualified programs. removes that barrier by providing the incentive on the front end. Faced with COVID lockdowns in 2020, the NIPSCO Program team • Shopping from home: the COVID lockdown radically shifted transitioned its traditional in-store products program to a model that purchasing behavior, and the marketplace gave customers an suited the new normal, by launching an online marketplace. alternative to visiting stores in person. Products are purchased on the marketplace and shipped directly to a customer’s home. 8 Association of Energy Services Professionals

The NIPSCO Residential marketplace social media post received 1,007 Shares, 269 Comments and 155 Likes. The post was so successful that the team had to shut down the promotion with an “Out of Stock” post 4 days later. NIPSCO’s new marketplace for efficient products received a strong NIPSCO’s program staff identified three best practices for consumer response from customers, who took advantage of the new, simplified marketing that could be reproducible for future utility program platform to order equipment. campaigns: NIPSCO’s marketplace is implemented by TRC in partnership with 1) Timing is everything: customers will be more engaged when TechniArt, which provides services including hosting the marketplace messaging is aligned with seasonal trends. For example, a Back- website, verifying customer accounts, handling customer orders, to-School promotion in August, when people are getting their kids shipping products to customers, and answering customer questions ready for school, can drive more engagement than a standard “save and concerns. money” messaging tactic. Going Viral: The Back-to-School Efficiency Kit 2) Meet your customers where they are: don’t be afraid to use social media as a marketing channel, since this is where your customers After launch of the marketplace, the NIPSCO program team promoted are spending a lot of time (and becoming more receptive to the available products via bill inserts, social media and email campaigns, messaging from brands and professional services). community outreach, and cross promotions, building awareness by informing customers about details of the program and the benefits of 3) Make participation simple: more and more, customers expect energy-saving measures. The team focused on three key strategies to a simple call-to-action. With just a couple of clicks, they should drive success of the campaigns: be ready to execute their purchase, without any cumbersome applications, mail-in rebates, or similar time-consuming additions to • Data-driven marketing, to identify the customer segments most likely the conversion process. to engage Upcoming seasonal promotions for the NIPSCO marketplace include • Creative messaging, to engage busy customers during the short a Holiday Smart Thermostat Promo, Earth Day bundle, and Father’s Day moment of interaction kit, all of which will receive increased quantities based on the success of the 2021 Back to School promotion. In designing future energy • Limited time offers, to create urgency and drive a call to action efficiency programs, the NIPSCO team will take lessons learned from this campaign and leverage the success to the Commercial products One of the product offerings released on the marketplace in 2021 marketplace and other aligned programs. by the NIPSO team was a “Back to School” Efficiency Kit, a limited-offer timed to the August/September back to school season. The program About the author staff promoted the kit heavily on social media, using upbeat and engaging messaging, and emphasizing a limited timeframe in which to Jennifer Rosenthal purchase the kit. In an exciting moment for the program team, the post went “viral,” with 1,007 Shares, 269 Comments and 155 Likes. The entire Jennifer is a passionate Business month’s allotment of 7,500 kits sold out in four days. Development Manager in TRC’s Advanced Energy practice, with over 12 years of While these numbers don’t compare to those of a Hollywood experience leading teams, projects and social media star, for the NIPSCO program they were impressive, and programs for utility energy programs showed that our customers were responsive to the marketing channel, across the country. She has supported messaging, and timing with which we served the marketplace promotion. utility clients in the successful design, These results will help the program team adapt future campaigns to implementation and strategic direction “meet customers where they are” and deliver more cost-effective and of beneficial electrification programs, including non-road electric impactful marketing. vehicles, and continues to support clients in their efforts to develop and implement on-road transportation electrification offerings. Key Takeaways A key to the NIPSCO marketplace program’s success was recognizing changing consumer behaviors and preferences. By 2020, customers had shifted to more online versus brick-and-mortar transactions, and were more accustomed to streamlined, application-free program types. www.aesp.org | fourth quarter 2021 9

RECYCLE EVERY MERCURY THERMOSTAT EVERY TIME Always remember your obligation to properly recycle mercury thermostats during energy efficiency projects. Learn more at thermostat-recycle.org10 Association of Energy Services Professionals

BRSOEAFAVKTINIHNGEGSNOBEUOTTX By Je Ihnen and Jake Millette T’S BE C AB T T M OLOGY It has been said that if you ask ten engineers Defining terms is always important to bring newer folks in the what the energy savings are for a project, they industry up to speed. will provide ten different answers. If that is true, a million evaluators asked to determine the Gross Savings: Changes in energy use resulting from program- net-to-gross ratio for an efficiency program related actions taken by participants and their agents, regardless of will provide a million different answers, which why they participated. is quite astounding when the answer is can be found in just three significant figures. This is no Net Savings: Only those changes in energy use that are attributable to surprise: trying to put a numeric counterfactual the program. Net savings account for free riders, free drivers, and value on a complex decision-making process is market effects. challenging. Free Rider: Program participant who would have done their efficiency Net savings determination for programs project the same way in absence of the program. serving large commercial and industrial sectors is hard, expensive, and controversial - and Free Driver: A customer who completes an energy-saving project implementation contractors (ICs) never like the outside of the program. This may include past participants or results. This article explores critical issues and customers who have no history with the program. Savings from identifies needs in an effort to better assess net these projects are called spillover. savings for large capital-intensive programs including custom efficiency and commercial Market Effects: The impact efficiency programs have on the and industrial new construction programs. inducement of product options and availability in the market, prices, product or practice acceptance, customer expectations, and the knowledge, services, and practices of market actors. Long lasting market effects are described as market transformation. Net-to-Gross: The ratio of net savings to gross savings, which averages about 80-90% for all programs, from year to year.1 Net Savings = Gross Savings – Free-Ridership Savings + Spillover Savings + Market Effects Savings 1 ACEEE’s Annual State Energy Efficiency Scorecard. www.aesp.org | fourth quarter 2021 11

PROVID G C TEXT For example, strategic energy management programs should include a multi-year capital improvement map or plan. An audit or The basic foundations of various net savings approaches can be assessment of a customer facility outlining efficiency upgrade options, found in chapter 21 of the Uniform Methods Project (UMP),2 “Estimating even for analysis later, is evidence of intervention and influence. Net Savings: Common Practices,.” Dec n-Mak s The reasons why attribution research is important include: Everyone knows an interview with the customer’s decision-maker • Improving program performance by effectively directing and is essential for determining attribution. However, the definition of setting program funds; and “decision-maker” is grossly oversimplified. Decision-making for large commercial projects is more complex than for smaller commercial • Assessing market transformation as free-ridership and spillover or residential equipment purchases. Big decision-making typically change over time. includes a large team (five or more) of influencers and, if necessary, a final decision-maker to make the call. This is how utilities select While the UMP describes many approaches for determining net implementation contractors and evaluation teams. At Michaels, we savings or attribution, from randomized control trials to expert panel have a similar process for big decisions. methods, this article focuses on survey approaches, which are among the most frequently used for large commercial and industrial programs. There are project champions, influencers, and decision-makers in any organization. The “decision-maker” may rarely make decisions, and At just over 70 pages, chapter 21 is merely a guide for establishing instead, simply accept what the team, champion, and influencers put net savings and attribution. It includes guidance such as survey forth. A decision-maker may know nothing about the program or how question development (e.g., open or closed ended), cross examining the project originated and was developed. Rarely would one person be and triangulation of responses, and aiding recall of survey participants. able to provide half the story. Multiple perspectives are needed. There are other approaches beyond those listed in the UMP M ket Ac rs specifically targeted at large capital-intensive projects that involve many influencers and long-time scales. Market actors for capital-intensive projects include engineers, architects, contractors, suppliers, and manufacturers. Program Through sharing of best practices, evaluators have been able to implementation contractors are wise to attack barriers and exploit incrementally improve net-to-gross (NTG) methodology although opportunities where they are, and this is largely with market actors. important work remains. Some concerns these groups are addressing Designers and contractors often make or break big gains in efficiency include: through systems design – trying new technologies and design approaches. The project may succeed spectacularly while the • Question development. Are questions phrased so participants “decision-maker” knows nothing about the program’s impact on their understand the concept being measured? Can they answer the project. Therefore, surveying a swath of market actors to document the questions and are appropriate scales or response options included? full picture is necessary. • Numerical algorithms. Are survey responses appropriately Some NTG frameworks include market actor responses to translated into estimates of free-ridership and spillover? How supplement the participant survey. However, this is not standard should responses be weighted when combined? practice for commercial or industrial projects and is only triggered if the participant identifies the contractor as a major influence. Subtle • Market actor influence. How are program-sponsored actions for influences from market actors such as selling the non-energy benefits designers and contractors weighed into the results? of efficient equipment may be completely overlooked by the participant when recalling the program or market actor’s influence on their project. L GE CAP AL PROJECTS – SU B T PRAC C C factuals The UMP focuses on the mechanics, question development, The UMP states that survey questions begin with determining sequencing, timing, and other things. However, details of complex, why the customer did what they did and what they would have done long-term project processes are beyond the scope of the UMP. otherwise. What was the timing of program intervention relative to Details for survey development, deployment and analysis for specific decisions made? How would you rate the influence of the program programs are left to the evaluation practitioner to handle. compared to other factors? Below, we discuss some of the issues and best practices to consider That may be how evaluators think but average folks are unable to in attempt to quantify savings attributable to a program for large capital give accurate or even serious responses to these inquiries. Effective projects. people and organizations decide and move on rather than remember hypotheticals. Moreover, customers are busy. In addition to honestly Orig s not knowing the counterfactual, they are subject to social desirability and “get me out of here” biases that result in inaccurate conclusions. Ideas, projects, and program participation start at some place and time and with a person. Successful programs have lasting market If a customer can identify and discuss the counterfactual, evaluators effects, which include changes in market structures and increased must make sure they understand the baseline considered in the adoption of efficient products, design, or practices. These effects customer’s mind because that is often different than what the program can span many years, projects, and customers. Designers and uses to calculate savings. Programs may assume a federal minimum contractors learn that new technologies and approaches provide non- efficiency standard as a baseline instead of local market conditions energy benefits like greater margins, upselling, and client/customer or they may assume the baseline is the most recent energy code satisfaction. Evaluators must move upstream to find the origin of the which has low compliance. In each case, the disconnect between the system design and equipment selection. It might not be the project customer’s and program’s baselines would lead to faulty attribution in question, but some other project that was 100% influenced by the values. We must understand the true market baseline and how it program. That attribution from market effects may last several years changed over time to accurately determine program influence. before the market is transformed. 2 https://www.nrel.gov/docs/fy17osti/68578.pdf 12 Association of Energy Services Professionals

R l Time I view g The best time to ask about decisions is immediately after they are We saved the best for last. The well-suited NTG researcher for made. Many decisions are made with emotions and validated by data. capital-intensive programs has dual degrees in engineering and Emotions change by the day and time of day. For example, judges psychology. We don’t know any such people so they may be formally have a much higher rate of granting parole early in the morning and educated in one topic area and learn the other as a hobby. right after lunch.3 Consider that these people are public servants with sworn obligations to the public and their profession to be impartial. Deploying the guidance in this article requires in-depth interviews How do efficiency decisions compare to judicial parole decisions? Can with those stakeholders mentioned: a cross-section of customer staff, a facility manager remember details of their interaction with a program design professionals, and contractors. Getting the facts and prompting a year later, particularly if they have worked with the program for many people to recall accurate activity is guided by well-documented projects over many years? touchpoints through the customer journey, and cross-examining interviewees with additional questions. The best way to assess Docum t n whether people are accurate with their responses is to ask for details and sequences. Attribution research must be a team effort between the implementation contractor and evaluator. Too frequently, evaluators PU G A GE R work in a vacuum determining the score like grading an exam. But it’s not an exam. It’s a discussion with all relevant parties – customer Experienced NTG researchers likely noticed that some of the influencers, champions, decision-makers, contractors, designers, and ideas included above, particularly those related to market effects, are the IC. not allowed in existing NTG frameworks. It is important for working groups to continuously examine and incrementally improve NTG To support the evaluator’s project-specific research, the IC must methodologies and not be held to past approaches when they do not document all contact points and information exchange, including work. names, dates, places, and quotes, going back as far as possible, and provide this to the evaluator. The evaluator must ask clarifying It is easy to visualize gross savings as a pie, with the program getting questions, interview the stakeholders, and ultimately triangulate all one slice of credit and “other factors” another. If multiple factors are the information for the most-likely result. There will be conflicting or involved in the decision, the size of the gross savings pie does not inconsistent information because everyone has a unique perspective. change, it is just cut up into more slices of credit. However, especially Any railroad approach with the same questions for the same with large capital projects with complex and lengthy decision stakeholders with the same data dumped into a spreadsheet for every processes, this approach is too simplistic because factors likely project will result in misleading results. interact. To fully understand a program’s impact, we should look at it from multiple perspectives and time periods, which does not fit nicely Inf m n v. M ey into a simple algorithm. Is a customer a free rider if the program incentive made no impact Too often, NTG research is seen as the final step of impact on their decision, but the program identified and led them to premium evaluations that “trues up” savings from a theoretical maximum to the efficiency? As our industry moves beyond widgets, namely lighting, level for which the program is responsible. However, this mindset can into holistic design and operational enhancement programs, informing prevent further investigation into the customer’s motivation. Focusing decisions - not cash inducements to the customer - become more less on falsely precise NTG values and more on participants’ decision- important. Maybe incentives should move up the chain to designers or making process will allow all parties to focus more on helping program contractors to pay for their research and risk for trying new technologies administrators improve the design of programs and increase savings. and approaches. 3 https://www.theguardian.com/law/2011/apr/11/judges-lenient-break About the authors Jeff Ihnen Jeff Ihnen is the CEO of Michaels Energy. Net savings and attribution analyses have been catnip and poison ivy to him for most of 20 years. Jake Millette Jake Millette is the Associate Director of Research & Evaluation at Michaels Energy. For over 14 years, Jake has conducted net- to-gross analyses and decision- maker research for demand side management programs in all sectors across the country. www.aesp.org | fourth quarter 2021 13











EV Owners’ Concerns about Allowing their Utility to Adjust their EV Charging which asked EV owners to charge their EV before 4:00 p.m. The Flex Empowering customers in this new era of demand flexibility can only Alert targeted message was falsely interpreted to mean that California happen if residents are: does not have enough electricity for EV drivers to charge their vehicles. • Able to differentiate between multiple calls to action; Through this EV DR study, we worked with the IOU to call 10 DR events with a group of over 200 EV owners and found that the events • Have been educated to know when, why, and how to respond to the effectively shifted EV load. The events appeared to be minimally invasive differing calls to action; and to the customer and we did not receive any complaints from participants. Most participants we followed up with didn’t even realize the study was • Can recognize and combat misperception and misinformation with happening. facts. Moving beyond the pilot level, however, EV owners’ lack of familiarity Taking the time to research and understand the knowledge, attitudinal, with charging control technology still presents a large barrier to adoption and behavioral barriers to demand flexibility and developing ME&O and program participation. Our survey of 3,000 EV owners revealed efforts to address customers’ needs will be critical to ensuring residents 76% of them had never heard of a managed charging program. Most have the tools needed do their part to support the grid in California and surveyed EV owners had concerns about allowing their utility to adjust beyond. their charging, including worries about their EV not being charged when needed, the “big brother is watching” effect of allowing someone else About the authors to have control over their charger, and potential disruptions to their charging schedule. Stacia Dreyer EV owners tend to be more environmentally conscious than the Dr. Stacia Dreyer is a Principal Consultant at Opinion general energy consumer. Yet fewer than 2% of survey respondents Dynamics. Stacia leverages a background in social and made the connection that allowing their utility to adjust their charging behavioral science methods and theories to understand and has environmental benefits without prompting. solve issues related to energy efficiency, decarbonization, and renewable energy. As an applied researcher with cross-training Solution: In addition to the previous ME&O tactics, utility targeted in environmental psychology, behavioral economics, and sustainability science, Stacia brings more than ten years of efforts should focus on educating new EV owners and prospective experience leading research efforts that provide critical buyers about how their EV charging impacts the electricity grid insights around how customers think and react to emerging clean energy and climate differently throughout the day along with the programs and rates change topics available to them to help manage their charging. Our study results show these efforts are likely to be well-received by EV owners. Hilary Polis Empowering in the New Era of Demand Flexibility Hilary Polis is a Principal Consultant at Opinion Dynamics. Hilary leverages her research expertise in customer The provisions in the November 2021 landmark CPUC grid engagement and behavior, advanced data analytics, reliability decision provide new opportunities for Californians to reduce emerging technologies, and distributed energy resources greenhouse gas emissions through demand flexibility. But demand to help clients optimize the value that customers can flexibility concepts are challenging to grasp. The grid needs are difficult provide as a grid resource. She has extensive experience to describe; calls to action and the time periods in which we ask leading impact analyses for complex and emerging customers to act are likely to evolve over time. Automated DR can help program designs. Hilary is currently leading a several customers adapt to dynamic signals with minimal effort, but customers large research efforts focused on innovative transportation electrification projects, are likely to be reticent to hand over control of their appliances and including an engagement to help PG&E assess opportunities to integrate EV charging devices to their utility. Yet the need to ensure customers are prepared to management technologies into their residential automated demand response program. protect the grid and their families during energy emergencies is growing ever more important with our changing climate. Beyond California, the deaths and illness that resulted from power outages due to heatwaves in the Northwest this summer and the cold front in Texas last winter drive home this point. www.aesp.org | fourth quarter 2021 19

HHaavviinngg aa hhaarrdd ttiimmee sseelllliinngg pprroodduucctt tthhrroouugghh yyoouurr mmaarrkkeettppllaaccee?? Too many products, services, and calls to action derail your customers plans to purchase, making them fatigued, confused, and suffering from decision paralysis. Motivate your customers with a more personalized and curated experience prone to get them to buy, and not just shop. Introducing Marketplace Lite, our svelte promotional Marketplace. It gives customers a tailored offering of the most popular products paired with a more intuitive navigation and site design. And don’t forget about our tried-and-true Limited-Time Offer Platform. Achieve your annual goals, measure by measure, quickly. Use it to increase sales on your existing marketplace or as a standalone e-commerce platform. Get your customers buying instead of shopping. Visit techniart.com/direct-to-customer to learn more. 20 Association of Energy Services Professionals

Con Edison’s targeted marketing strategies help business owners achieve greater equity, save money, use less energy By Shaun Hoyte, SMB Program Manager, Con Edison and Ashley Nicholls, Founder and Chief Strategist, Doer/Maker Amid ongoing recovery and economic Con Edison believes a powerful way to energy assessment by one of our qualified uncertainty, businesses around the world, assist in the recovery of these businesses, and participating contractors. After an in-depth regardless of their size or location, have had to better set them up for success in the future, analysis of existing equipment is completed, to adapt to new and dynamic challenges. This is to help them invest in the most up-to-date SMBs receive a report with recommendations has especially been the case with small to energy-efficient technologies. In making these for upgrades. If they choose to move forward medium-sized businesses (SMBs) in New York upgrades to their lighting, refrigeration, HVAC, with some or all of the recommendations, which are considered to be the backbone of control, and gas systems; SMBs can save real a participating contractor will handle the the city’s economy. and significant money which they can then installation and Con Edison will cover up to reinvest back into the highest priority needs 70% of the total project cost. For New York’s small to medium-sized for their business providing stability, growth, businesses with the fortitude or good fortune and longevity. But we also recognize that Con Edison has successfully to survive the tumultuous conditions they’ve SMBs often lack the working capital or the served over forty-five thousand encountered over the past several years, expertise to make these investments and small and mid-sized businesses recovery is taking time. And many continue designed our incentive program to address in NYC and Westchester Country to face procurement, logistical, staffing, and these challenges. through this program over the past operational pressures, all while managing the decade plus, and saved over 900k health and safety needs of their customers Small and mid-sized business owners are megawatt hours. and employees. offered a safe, flexible, and minimally invasive process which starts with a free, no obligation www.aesp.org | fourth quarter 2021 21

Despite all the progress, we still have Development Authority (NYSERDA), is free additional work to do to earn our place as a to participants—half of whom must come trusted energy advisor to all our business from priority populations including income customers, helping them make smart energy sensitive, environmental justice, and other choices through education and financial disadvantaged communities. Many graduates incentives in an effort to maintain grid reliability of the program were hired by our participating and also to reach New York’s decarbonization contractor network, and a few were brought goals. on to work in-house at Con Edison. Minority-owned small businesses At Con Edison, the SMB Program has also been working to get more sophisticated about were more likely to report closures during using our marketing resources to engage About the authors (or re-engage) with our contractor network the pandemic compared to other small and our SMB customers in key market Shaun Hoyte verticals as well. As part of this effort, Con businesses. Additionally, a large majority Edison partnered with Doer/Maker to use Born and raised in NYC to data insights and market trend information immigrant parents, Shaun of small businesses led by women have to help us prioritize the Programs’ vertical learned at an early age market sectors of healthcare and fitness that hard work, dedication, reported a decline in sales in recent months, centers, restaurants and food stores, retail, lots of patience, and a offices, warehouses and manufacturing and little bit of luck were some compared to small businesses led by men. small services. For each vertical, Doer/Maker of the key elements he established audience targets and curated needed to be successful. And environmental justice communities messages that address the unique financial, Professionally, he has gained technological, and social needs of small and significant in-depth knowledge of the electric, gas, and have traditionally depended on fossil fuels mid-sized business owners. district steam systems and the associated municipality infrastructure to develop solutions to help save our for their livelihoods at disproportionate rates. Using these insights and messages, Doer/ planet while stimulating the clean-energy economy. Maker and Con Edison have partnered on Shaun earned a B.S. in Organizational Management, That’s why the SMB program has been strategic initiatives to promote greater equity cum laude, from Manhattan College and an M.S. in and empowerment for Con Edison customers, Sustainability Management from Columbia University in diligently focused on increasing support for including strategic partnerships, marketing the City of New York where he is currently the Vice-Chair and outreach campaigns, content creation, of the Alumni Advisory Council (AAC) for the School of and outreach to Minority and Women-owned and innovative new ways to create meaningful Professional Studies (SPS) and serve on the Board of connections. Directors for the Columbia Alumni Association (CAA). Business Enterprises (MWBE’s). Personally, he aspires to be great at everything he And it's those authentic, meaningful does, inspire many along his journey, and give back Con Edison has implemented connections with the communities we live to the communities, people and organizations that programs to increase awareness, in and serve that will allow us to meet our advocate for climate remove barriers and promote decarbonization goals. justice and social equity. success. Ashley Nicholls Last year, Con Edison worked with a number of our community partners, including With more than fifteen our implementation contractor, Willdan years in marketing, Ashley Energy Solutions, to launch the Clean Energy Nicholls brings a depth of Academy, a contractor training program experience and expertise to related to energy efficiency and building Doer/Maker and the clients performance for small commercial facilities we serve. As the strategic and multifamily buildings. The Academy is lead, Ashley inspires teams of intended to meet the needs of the clean creative, media, and management professionals to create energy job market by providing participants marketing programs and platforms that break through to real world technical knowledge to bridge the the target audience and generate real business results. gap in skills required to be successful in the Ashley’s experience spans many clients and verticals energy efficiency industry. The training, which including: Con Edison, PECO, PHI, AESP, National Grid, is funded by New York State Research and NYSERDA, Eversource, 2G, Integral Analytics, and more. 22 Association of Energy Services Professionals

Creating Internet- Enabled Thermal Batteries Through etrofit Water Heater Controllers By Wesley Whited Once a simple home appliance, today’s electrified water heaters are internet-enabled thermal batteries that are three times more efficient than Tucked w y unceremoniously their predecessors. Moreover, through grid integration, they can optimize in the mech nic l rooms of our their charging cycle to sponge excess solar capacity at midday while still commerci l buildings nd the meeting the comfort needs of a building’s occupants. This is especially b sements of our residences is relevant with the recent finding from a scientist at the University of Cork in Ireland that U.S. rooftops could host enough solar PV capacity to slightly powerful tool for comb ting outpace the country’s current total energy demand . However, we need to the clim te crisis. Meet the w ter overcome three principal barriers before unlocking the enormous potential he ter. The ubiquitous n ture energy stored in hot water. of this humble tool is key for helping utilities meet emissions E ciently Electrifying Our t rgets, reduce energy w ste, nd Domestic Hot W ter Supply incre se dem nd flexibility in time of lo d growth. The barriers to efficiently electrifying our hot water supply coincide nicely with Nick Brod's Three clean energy challenges we must solve. Currently, about 55 million homes nationally use electricity to heat hot water. These households1 opportunities are moving them from inefficient electric resistance units to highly efficient hybrid heat pump water heaters (HPWH). According to AO Smith, the average electric resistance water heater demand when running is 4.45kW—for a heat pump, it's 0.97kW, making it four and a half times more efficient. Additionally, ancillary make-ready costs, such as 1 Lewis, M. (2021, October 18). Egeb: Rooftop solar could match annual total US Power Generation. Electrek. Retrieved November 29, 2021, from https://electrek.co/2021/10/18/egeb-rooftop-solar-could-match-annual-total-us-power-generation/. www.aesp.org | fourth quarter 2021 23

panel upgrades, can largely be avoided since the customer has the Today’s environmental electrification programs are mainly aspirational necessary circuiting in place. Furthermore, a study by the Brattle Group and have had a narrow customer impact. While many variables may be found that a typical 50-gallon HPWH can reduce CO2 emissions by 52% impacting market transformation, the total cost of efficient electrification from an electric resistance baseline when the utility uses a fuel mix of is typically much higher for the end-user than installing baseline gas coal and gas. technology. Therefore, policymakers and regulators should consider an incentive layering strategy to buy down more of the customer share to 2015 RECS Data on Fuel Source of Water Heating accelerate energy waste reduction and decarbonization efforts. 60 Upskilling The Tr de Alley B se 50 For customers with existing infrastructure, the economics of HPWH work out nicely. Energy Star estimates that installing a HPWH would Millions of units 40 save a typical home $330/year. The economics can even work for fuel switching customers who may invest in electrical upgrades to 30 install EV or PV infrastructure. However, the uptick of the technology has been stubbornly slow, despite generous utility incentives designed 20 to achieve market transformation. While many issues are at play, one perennial barrier is a trade ally base that is reluctant to advocate for new 10 technology. Plumbers and HVAC Techs are risk-averse. Recommending a newer version of the existing equipment is a common tactic to 0 Natural Gas Propane limit callbacks and complaints. Customers are particularly reliant on Electric their trade ally to aid their decision-making process as people do not think about their water heaters until they take a cold shower. Utilities Single Family Apt 2-4 Units APT >5 Units Mobile home should strongly consider directly educating their customer base on the advantages of HPWHs. Educated customers are more likely to nudge Over 60 million homes currently use natural gas or propane for hot the reluctant trade ally to offer a more efficient solution. Increasing water heating. The opportunity for these customers is to fuel switch customer demand will create a snowball effect that sees distributors the load to electric, creating more capacity for the grid’s distributed and wholesalers change their stocking practices, allowing utilities to thermal battery and further lowering emissions. These customers implement cost-effective midstream programs at scale. overwhelmingly live in cold or mixed humid climates typical of the Northeast and Midwest. Though data may make spotting the opportunity Unlocking The Idle Energy In Hot W ter easy, the economics of decarbonization still need to work for these Through Controls customers. In addition to material and labor, the electrification of hot water typically includes other customer make-ready costs associated Moving the nation’s hot water supply to electricity is critical to meeting with plumbing or electrical upgrades. our climate commitments because 18% of the energy consumed by a typical household comes from heating water. However, efficient electrification alone will not significantly move the decarbonization needle. Instead, electrification needs to occur alongside the build-out of a controls network that shifts load away from high-priced periods of thermal generation and into periods of renewable abundance. The first opportunity is with the currently installed 55 million units primarily clustered in the South and Southwest. Another way of stating this is to say that we have 55 million batteries sitting idle during a climate crisis. These are typically medium-sized electric resistance units, around 50 gallons. These units need retrofitting with an internet-enabled water heater controller that automates the load shift functions by reacting to a grid-triggered signal, such as an emissions alert or pre-loading TOU rates into the device’s firmware to optimize charging to times of abundance. Furthermore, individual units can be grouped in the Cloud to provide grid operators a flexible resource for balancing intermittency in renewables. Trevor Swanson, a Program Manager at APS, has been working with DNV’s Technology Team to develop customer solutions that protect occupant comfort, lower costs, and helps APS better manage peak. 24 Association of Energy Services Professionals

“I see controlling water About the author heaters to shift load to off-peak times can be a Wesley Whited great benefit to a customer on a time-of-use plan… Wesley Whited has been Additionally, when grouped, innovating in the energy as in an apartment complex, engineering space for the it can also benefit the utility. past decade with professional A true win-win measure.” experience in utility program design, new business -Trevor Swanson, APS development, and technical problem solving. As a member One non-energy advantage of these controllers is that they collect of DNV’s Technology & voltage data, which helps predict when heating elements will fail. As a Analytics team, Mr. Whited leads a cross-functional team of result, units with failing heating elements should be prime targets for professionals who design utility energy efficiency, demand early replacement with a more efficient HPWH. response, and carbon reduction programs around clean technology. Mr. Whited is a recognized thought leader in the While on the topic, HPWHs now come equipped with a CTA-2045 field of Networked Lighting Controls and frequently presents port. This standard enables plug-and-play grid functionality through a on behalf of major utilities about IoT technologies. He sits USB-style interface, eliminating the need to install a retrofit controller on technical committees for the Design Lights Consortium and hiring a qualified electric professional. Here, the homeowner (DLC), Illuminating Engineering Society (IES), and ANSI. only needs to connect the device to a local network, and the grid can He lives in Asheville, NC with his wife and two dogs. manage the complexity in the background without disrupting comfort. This is possible through advancements in machine learning and the predictable schedule of most households. Wr p Up Water heaters are invisible, ubiquitous batteries that can make a meaningful dent in building decarbonization efforts. Thermal batteries can be optimized to charge during periods of renewable abundance and then hold that charge through periods of high prices. This strategy helps lower customer's energy cost and provides grid operators with a flexible resource that can produce MWs of capacity when aggregated. States with high levels of existing electric water heaters should immediately begin scaling programs that install internet-enabled controllers that are grid and price responsive. Longer-term, they should pursue customer education and workforce development to facilitate HPWH market transformation efforts. States with low levels of existing electric water heaters should immediately adopt fuel switching policies that provide stackable incentives to help reduce the economic burden on customers. To obtain the maximum benefit, they should mandate that subsidized units be grid-responsive to maximize the potential of this distributed energy resource. www.aesp.org | fourth quarter 2021 25

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