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Why Customers Don’t Trust Energy Efficiency – Versus Stupid Pet Tricks

As I mentioned in a LinkedIn post last week, this week’s Energy Rant involves an interesting article Why Homeowners Don’t Trust Energy Efficiency.  The paper could also be tweaked a little and re-entitled, Why Customers Don’t Trust Energy Efficiency.  Period.  As usual, this brings to mind a cornucopia of spinoffs.

Let’s first begin with a core theme of a rant from about a month ago.  In that, I said savings from current portfolios across the country are dominated by:

  • Incentives for trinkets like CFLs and ENERGY STAR this, that, and the other (consumer goods) and
  • Incentives for contractors to upsell efficient larger trinkets to commercial and industrial customers

The source article noted above states customers don’t trust the savings estimates from a home energy audit.  Let me ask this question: Do customers trust the savings they will get by purchasing an ENERGY STAR appliance?  No.  They haven’t a clue what the savings will be.  Let’s face it.  For these consumer programs, people are treated like animals.  Sit.  Stay.  Good boy.  Here’s a biscuit.  Stupid pet tricks.  Speaking of stupid pet tricks, this has engineering nerd written all over it.

Anyway, I’ll need to write about attribution someday.  Is Pavlovian response a free rider?  If the customer has no clue what the savings are, isn’t that a free rider?  What is the name of Pavlov’s dog?  Just curious.

The second point I will make as a result of this article is that there is no such thing as a free rider for retrocommissioning or other comprehensive energy retrofit projects guided by sound energy measure identification, development, and analysis.  We wrote about this in a published paper for the Energy Solutions Center a couple years ago.

For the home audits, consumers are skeptical that the savings will develop per prediction, but yet they buy the ENERGY STAR appliance with no inkling whatsoever of savings or return on investment.  With retrocommissioning, end-users get nothing but savings; no shiny objects or things to play with.  With comprehensive energy retrofit, they spend big coin for behind-the-scenes invisible measures with the anticipation of return on investment.

Regarding retrocommissioning measures, you cannot tell me that because the measures are low/no cost the end user would have done any of them anyway.  If they would have done them anyway, why do they exist?  Answer: lack of time and/or lack of expertise – information, knowledge, awareness, and motivation all lead to action.  In some retrocommissioning projects we have been involved with, the mere activity of doing the facility investigation makes things happen as customers start to think and focus on a purpose.

The article also states that customers place higher value in confidence in savings compared to low implementation cost or incentives.  In other words, for these types of deep retrofit projects with no shiny objects involved – projects driven by dollars only – accurate information trumps everything else.  End users are doing these things to save energy and money and not for jollies in the form of checks from the utility / program.

Switching gears, Andy Frank, quoted in the article, states average savings resulting from home audits is about $1,000.  Whoa.  Customers should determine what they pay for energy on an annual basis and if savings estimates exceed 20-30% you might be skeptical, depending of course on the breadth and depth of measures.  If the structure is stripped to the framing and re-insulated, sheathed, insulated again, and space heating, water heating, and laundry equipment switched from electric to gas, then it could be well above 50% dollar savings.  My annual energy bills are just under $800 for electric and $300 for natural gas, all in – meter charges (fixed cost) and everything.  Texans and Floridians have some of the highest energy consumption at roughly 15,000 kWh annually at a cost of roughly 13 cents/kWh.  Doing the math, $1,000 of savings is a stretch in most cases.

How to evaluate reasonableness?  Benchmarking.  Where does the home/facility in question stack up against peers, and where would it be after projected impacts from recommended measures?  Is it reasonable?

Lastly, Mr. Frank states that investing in energy efficiency is like investing in a tech stock.  Hardly; that is if the analysis is any good.  The challenge becomes shepherding stuff from study to implementation – a story for another day.  Between study and implementation, easily half the savings can be squandered because “trade allies” are used to doing things the way they always do them – poorly, when it comes to saving energy.  An aggressive training and QA/QC regimen is needed.  There is absolutely no reason in the absence of substantial facility use patterns that savings should not materialize per estimates of a sound study with implementation and verification by people who know what they are doing.

Jeff Ihnen

Author Jeff Ihnen

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Join the discussion 3 Comments

  • Andy Frank says:

    Jeffrey, great blog post expanding on the ideas in the Energy Efficiency Markets article. I wanted to clarify two quick things:

    1. The $1,000 / yr savings are based on actual data of retrofits (not audits) for Sealed’s pilot area of Long Island. There are a lot of oil homes here, and so annual energy costs of $4,000-$5,000 are very common. Savings of 20%-25% therefore get you to $1,000, although there’s obviously a ton of variability.

    2. And to that variability question, I’m looking at things from the homeowner’s perspective. Every piece of data I have seen has demonstrated a very high variability of realization rate (actual to estimated savings). I agree that better QA/QC could reduce this variability, but the fact is there will always be significant variability due to modeling, implementation and behavioral factors.

    You might say that modeling and implementation can become better and behavior shouldn’t be a concern, but the fact is that this is not the world we live in. All homeowners care about (from a financial perspective) is whether their bill is lower than normal. So until the efficiency industry starts to embrace the customer mind-set, IMHO we’re going to remain a niche industry (in single-family residential at least).

  • says:

    Thanks for the clarification on the annual energy spending and savings ranges – I’ll buy that. Also, I agree with and it’s my mission to assess the general mindset of customers, which for us are in the commercial and industrial sectors for the most part – and that varies by customer type and then of course at an individual level.

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