Friday, March 30, 2012

Challenges accessing 3/30 NYSERDA webinar...

The email below was in the rough draft stage, and when my code didn't get me in to the webinar I felt compelled to release it.  


The program is moving toward truing energy consumption, and truing to energy prices.  I hope people realize this will make SIR much more difficult to achieve, and that incentive based upon energy savings means SIR/TRC problems go away. 


Thank you to Andy Kambourelis and Cara Tromans of CSG, both of whom responded nearly instantly to the e-mail with a path to access.  I was able to catch a good portion of the webinar...




On Fri, Mar 30, 2012 at 3:21 PM, Ted Kidd <tedkidd@eesny.com> wrote:
Dear Mr. Ahearn and HPwES participants:

(At 2:30 I attempted to gain access to the 3pm webinar.  Apparently I have a bad registration number.  On 3 different browsers I get "Webinar Unavailable", curious.)  

I think it's fair to say; ‘290 other contractors are doing great with it’ has been proven false, that 'everyone else doesn’t have a problem with it, what is wrong with you' has been shown to be the words of a cruel partner.  To those who have replied, thank you for proving this to me and to everyone.

These are the things we've been hearing sir.  I think you may also have been led to believe the same falsehood.  I hope you are beginning to see a different picture now.  

It was not my intent to create a stir without offering solutions:  

Currently the program pays a percentage of total job.  I think this is the broken piece.  A $10,000 job might pass SIR if the price were $8000, problem is we can't perform $10,000 jobs for $8000 and stay in business long.  

PSC wants to pay for energy reduction.  If you think about it, they have a number they are willing to pay for every job.  That amount occurs at the point that job hits 1.01 SIR.  

Why not make incentive based upon the amount that the PSC feels each individual job is worth, let the homeowner pay the rest?  Stop backing into things, come straight at it.  Get the windows and water heaters back in, simplify for us sales people so we can explain it to the homeowner again.  

Here's a scenario:  

$10,000 job doesn't make 1.01.   At $8000 it does.  

This means the homeowner incentive is either $800, (or $4000 for 50/50).  PAY THAT!  Let the homeowner finance the remaining $9200 (or $6000 for 50/50).  

With this approach NYSERDA/PSC pays for the value of the energy reduction they see for every job.  Every audit becomes opportunity for sales without having to game models.  Many of the current painful contortionist job sales and approval activities go away.  

Isn't this almost the same perspective On-Bill is taking, allowing the difference to come from "Off-Bill"?

I know simple doesn't mean easy.  Changing core approach to incentive will be hard, and the prospect out the other side of less bureaucracy may not appeal to some in power.  But for us this approach does mean opportunity at almost EVERY AUDIT.  

It means opportunity without having to game energy models.  It would hyper-simplify approval, as nearly every job qualifies, just like before March 31, 2011.  The program can again apply pressure to run all jobs through it, which I see as critically important program feature removed when "SIR Cliff" was implemented.  

QC cost and complexity could be dramatically reduced.  Sampling of energy savings proves accuracy.  (Isn't NYSERDA sampling energy savings anyway?)  Create incentive for excellence, bonus contractors based upon their savings realization rates.  

A friend sent this:

I especially like your arguments about applying incentive to the energy savings and not holding the retrofit companies to both SIR and realization for the incentives.

I like your thoughts about providing incentive that matches to the trued model energy savings (and have the homeowner handle the rest of the cost - I can deal with a $5000 expense rather than $20,000 if I know the other $15,000 will be accurately accommodated by the work being done.

This has got to be the answer - figure the energy savings based on the work scope and determine how that can be handled with On-Bill financing and then leave the rest to the homeowner.  I think that this approach will get the contractors all back on track to be more supportive of the whole process - and it will be the most effective at reducing the fossil fuel energy usage.

I really do think that getting the program to the essence of the last paragraph is the key - it is critical to the program.  Without it, the construction companies are just pawns  - mice on a treadmill - trying to survive from job to job.


With savings based incentives the program returns to it's goal of market transformation and reducing energy use.  Sales people can again present the program to homeowners with enthusiasm and gusto!  Instead of struggling with model uploads, contractors can get back to work.  We can shift from just trying to survive, to prospering. 

Otherwise this program will continue evolving down the path of: "I'll take $250 to have a seat at the kitchen table, and I'm happy to sell the RG&E rebate".   I don't think this path leads to high realization rates or long term success for anybody.  

Sincerely,

Ted Kidd

P.s.:  Damian's suggestion about moving this to a blog seems very pertinent at this point.  I've posted this stuff at  http://eesny.blogspot.com/ if anyone wants a reference or to comment. 
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