The race is on to develop and deliver next generation successful energy efficiency programs. There is indeed innovation in the marketplace. The days of what I call “hamburger selling” will end, probably in the next decade. Selling EE in these cases is like selling hamburgers – who can sell the most and the cheapest hamburgers that people will eat. The product is unsophisticated – lighting, primarily. The market is huge and opportunities ubiquitous. Marketing and selling the burger is the name of the game and will be for a few more years.
In the past five years, energy efficiency has spread like wildfire across the country and although it’s a little twisted, if you consider all the vegetation, grass, trees, shrubs, and scrub as EE potential, the wildfire has consumed only the grass. The grass will soon be gone. How will the shrubs, scrub, and trees be reeled in? It will require a combination of technology, but more so intellect and selling things (programs) people want.
What will this look like? I’m not telling because it’s intellectual property, but I will say I can see it beginning to happen in the residential sector. Last week we attended the Midwest Energy Solutions Conference hosted by the Midwest Energy Efficiency Alliance, in Chicago. As I mentioned in The Super Genius Grid, somebody will develop an app to make EE into a game or social media thing of some sort. Sure enough, this is beginning to happen via residential behavior-based programs. One such program is delivered by Efficiency 2.0.
Part of the next swath of EE will be developing programs that people want to buy or participate in. That’s what E 2.0 is about. It amazes me how consumers respond – irrationally all the time – which helps explain the iPhone, iPad, iThis, iThat, iOther and the i-got-to-have-it. The E 2.0 program offers points and awards to “empower” customers to reduce their energy consumption. They partner with communities to compete with one another and to offer free money for spending at local businesses. Like mom and apple pie – who wouldn’t want that? The winning community gets a free solar panel for one of their schools – woohoo!
The E 2.0 program is a psychological program (my term) where communities are profiled as to where they shop, what they buy and all this stuff, like grocery club cards do. They see what you buy and they provide coupons and discounts for that stuff or related stuff.
If I got the message correctly, consumers don’t want useful real information, which as I understand it is what OPOWER delivers. OPOWER, again per my understanding provides data on how your bills compare against those in your community and how you compare against yourself in past years. They tell you if you turn your thermostat down 2 degrees no one will notice and you’ll save $50 per year (asterisk, asterisk). This seems like useful information to me but the message I got from E 2.0 and a somewhat similar provider, Simple Energy, is that customers want gimmicks, games, prizes, lotteries, and free stuff, NOT information.
Apparently consumers like lotteries and this is obviously true when it comes to state lotteries and the gaming industry. I officially gambled once, in Vegas. It was a stop on a road trip to California and when in Vegas… I played the quarter slot machines starting with $10. I think I plunked 40 quarters into the machine consecutively with no wasting time winning anything, at all. I was done in 5.75 minutes and hooked like a crack addict. No really – I said, “Boy that was fun. Let’s get moving.” I don’t even like “illegal” office pools, like Super Bowl, er I mean, “The Big Game” or the NCAA tournament where there is a 100% payout and no taxes. I have no interest in dumb luck.
I avoid as much as possible anything with unfavorable odds including insurance, gambling, and investing. “Investing” in an insurance policy because the premium seems cheap relative to the policy amount is stupid and a loser all day. I already told this story a while back. Gambling – ever seen a millionaire gambler? Not for long. If you believe in the possibility of wealth creation via gambling you probably believe in water running uphill. Investing – fund managers claim they can beat the market. Bull.
Ran in the ditch there a little but needless to say, to me information is useful. Games: don’t have time and who cares? However, this is very similar to old-school marketing versus “stupid” social media. I get it and I’ll get with the program.
The E 2.0 guy said people don’t care so much about what their neighbors are using for energy. Whoa! This flies in the face of the OPOWER message to compete against your anonymous neighbors. Why do people not care what their neighbors use? Because everybody thinks they are different – just like you did in high school, when you wore the exact same kind of stupid stuff everyone else wore; listened to the same music; had the same sneakers; watched the same TV shows and on and on.
I can vouch for everyone thinking they are unique. Large energy users included, think they are different than everyone else when, in fact, the first and second laws of thermodynamics are universal. Sure facilities are different. That’s why we need to look at stuff and analyze stuff specific to them but we don’t have to have been born in the building and spent our entire living breathing lives there to know what’s going on.
This is the challenge, however – savings from these programs run a few percent of consumption, maybe 2%-5%. This may not sound like much but it is I believe including all customers and that would be huge. The challenge is how to measure and verify savings on such a tiny scale. These numbers are far down in the weeds. If a kid leaves home for college it will have more impact – my unscientific guess that I would pretty well guarantee.
The other problem that the E 2.0 guy nonchalantly said is that when the program is pulled, all that remains is the measures implemented – the ENERGY STAR stuff, CFLs and whatnot. Like leaving Weight Watchers, people go back to Twinkies, Ding Dongs and diet soda.
In the end, it comes down to prizes, dumb luck, games and gimmicks (which most people prefer apparently) versus benchmarking, competition, action and generating wealth for the sake of generating wealth. That is, the E 2.0 versus the OPOWER way of thinking.
The race is on!
One other thing I noted in a separate session at the conferences was that in 2007, James Inhofe and Hillary Clinton slipped a provision into a law to require ground source heat pumps be evaluated against alternatives for HVAC system replacements on a 20 year life-cycle cost basis – for every new federal facility / system replacement. Senator Inhofe is Mr. “climate change is the biggest fraud of our time”, but he supports efficient heat pump systems. Why? Could it be the International Ground Source Heat Pump Association is headquartered in Stillwater, home of Oklahoma State with board members including from big companies?
In the DUH column this week, suburbanites with efficient McMansions and a 40 mile commute use more energy than inner-city dwellers.