GCEA Market Study Presentation - OKI (20120224)

8/3/2019 GCEA Market Study Presentation - OKI (20120224)

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Energy Efficiency Market Studyfor Greater CincinnatiOKI Regional Planning Forum

February 24, 2012

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A genda

Energy A lliance Overview

The Market Study

Where A re We Now?

Call to A ction

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ENERGY ALLIANCE

OVERVIEW

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A bout Us

Non-profit 501c 3 organizationPrivate Public partnership

Energy Efficiency/Renewable EnergyServicesEducation/OutreachProject Management

FinancingMarket Focus

ResidentialNon-profit Commercial

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Mission Statement

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The Energy Alliances mission is to facilitate investment inenergy efficiency for homeowners, non-profit organizations, and commercial buildings owners through

outreach and education, project management, and financing solutions.


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Why Energy Efficiency?The First FuelJob creation/retentionCost savingsSelf-financing/ROIReduce dependence on foreign oilIncreased comfort

Preservation of building stockGreenhouse gas emission reductionImproved air quality

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Public/Private Partnership

Greater Cincinnati FoundationEnergy Efficiency & Conservation Block Grant Hamilton County, OH

City of Cincinnati, OH Kenton County, KY Boone County, KY Campbell County, KY City of Covington, KY City of Florence, KYDepartment of Energy Better BuildingsNeighborhood Program 1 of 41 recipients nationwide

$17m,3

-yr grant 7


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DOE Better BuildingsNeighborhood Program

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Residential Program DesignHome Performance with Energy Star Program

Customer Engagement Energy A lliance marketing Contractor marketing

Request assessment through web portal $50 energy assessment ($400 value)A udit delivered, entered into CompassCustomer invests in home energy upgrade 3 5% retrofit cash incentive 6.99% unsecured, 10-year loan, up to $20,000

(3 .99% in N. KY)Quality assurancePayment to contractor & customer

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Residential Case Study

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Job Cost $5,005

Energy Alliance Incentives 1751.75

Total $3,253

Energy Reduc tio n 30%Annual Savings $651

Tot al Savings 20 year life $13,000

Estim ated Payback 5 years

Type of Im prove m en ts Air Sealing, Duct Sealing, FloorAbove Unconditioned Space

With a 10 year loan, customer would pay $ 3 8/month totaling$45 3 for the year vs. projected annual utility savings of $651 =

$198 cash positive each year!


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Residential ProductionEnergy A ssessments: over 1,200Retrofits: 500

A verage retrofit cost: $8,400

Project financing: over $ 3 00,000approvedEconomic impact: $4.5m

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Customer, Heather CurlessCincinnati Resident andOwner of Greener Stock

The audit was very educational (and eyeopening). My primary interest in doing theupgrades were for comfort and energy/cost savings. Also as a green business owner, I felt it necessary to "walk the talk. ~ Heather Curless


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Commercial Program DesignMarket Focus Smaller non-profits Private schools/churches Public schools Municipal buildings

Program Design 50% cost match for energy assessments 15% cash incentives for retrofits Design-build & performance contracting Low-interest extended term loan (Jan. 2012)

$673 K projects completed, $7m pipeline

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St A ntoninus, Cincinnati


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Case Study: Mt. Washington UnitedMethodist Church Project

Mount Washington Methodist Church was the firstorganization that benefitted from the Energy A lliances building assessment expertise andreceived funding to support their $40,200 totalimprovement project.

Replaced:125 light fixtures with more T-8 fluorescent bulbs12 year old boiler with 96% efficient new boiler Exchanged outdated air conditioner equipment

Reduced:

A nnual lighting electricity usage by 3 5%A nnual heating use by 25%A nnual cooling use by 25%

Mount Washington UMC will save an average of $8,000 per year over the life of the installedequipment.

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Children playing at MountWashington Methodist Church,December 15, 2010


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T HE MARKE T S TUD Y

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Efficiency is the CheapestEnergy Resource

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EnergyEfficiency

Wind Biomass Natural GasCombined

Cycle

PulverizedCoal*

Nuclear Coal IGCC Solar PV

R a n g e o

f L e v e l

i z e d

C o s t s

( c e n

t s p e r

k W h )

*N otes: All data from Lazard 2009. High-end range of advanced pulverized coal includes 90% carbon capture and compression. All data from Lazard (2009)


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Efficiency is Low Risk & HighReturn

Because efficiency is cheap, a switch to it fromgeneration sources produces a high returnBuilding sciences and technologies areadvanced, as a result energy savings can bepredicted reliably

16S ource: Ehrhardt-Martinez and Laitner 2008


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Four-County MarketCharacterization

Residential market = 140,000 households Single-family detached, owner-occupied,

income > 200% of poverty, in four-county area 20% or greater energy savings fromweatherization alone

Non-profit market = 470 buildings Over 25,000 square feet, Occupied or owned

by non-profits

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Loan terms analyzed

6.99% unsecured loan, 7 year term $400 in incentives from Duke Energy for

residential participantsFor 2012 and 201 3 only Direct measure incentive payment of 15%

from Energy A lliance & 10% from federal taxcredits (res. only)

Incentive of $150 for residential and 50% for non-profit toward energy assessment costs

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Residential Program

Average Household$4,3 50 in energy

improvements

A nnual payments $500-$800 (depending onincentive level)Positive cash flow in first

year of loanA verage annual positivecash flow of $500 over 18 years.

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-100

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100200

300

400500

600700

800

900

1,000

2 0 0 9

D o l l a r s

Year

2012 Participant

2015 Participant

2020 Participant

Av erage Annu al Net Cha n ge i n Cash Flow


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Nonprofit Program

Average Building$29,000 in energy

improvements~$1,000 positive cash

flow in first year A verage annual positivecash flow of $ 3 ,000 or

more over 17 years.

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Av erage Annu al Net Cha n ge i n Cash Flow

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2,000

4,000

6,000

8,000

10,000

12,000

14,000

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D o l l a r s

Year

2012 Participant

2015 Participant

2020 Participant


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Impacts Over 20 Years

Participants 69,000 households 460 non-profit buildings

In 203 0 alone: $59.6 million in bill savings, $ 3 7.2million in net consumer savings

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I nv estme n ts (tho u sa nd s 2009$) 20 10 20 15 2020 202 5 2030New effic iency inves tments 529$ 14,270$ 16,724$ 19,716$ 2 3 ,05 3$

E n ergy Sa v i n gs

Electricity (MWh) 179 49,667 117,591 195,078 267,913

As % of forecasted sales 0.00% 0.49% 1.19% 2.00% 2.77%Natural Gas (MMBtu) 8 3 5 253 ,482 597,559 1,01 3 ,009 1,426,814

As % of forecasted sales 0.00% 1. 33 % 3 .04% 5.02% 6.89%Cost Sa v i n gs (tho u sa nd s 2009$)

Electricity 16$ 5,566$ 14,291$ 25,241$ 3 7,181$Natural Gas 17 3$ 3 ,3 17$ 7,896$ 14,702$ 22,42 3$

Total 189$ 8,882$ 22,187$ 3 9,944$ 59,604$Payme n ts (tho u sa nd s 2009$)

Loan Payments -$ 5,081$ 15,091$ 18,612$ 22, 3 75$


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Employment Impacts

Four-county impacts in20 3 0 ~3 15 net additional job

person-years $1 3 million in additional

wagesIncludes direct, indirectand induced

Construction/manufacturing: 100+net additional jobs for 20 years.

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2010 2015 2020 2025 2030

I n c o m e

( $ M M )

E m p l o y m e n t

Jobs Income

Sector Categories 20 12 20 15 2020 202 5 2030Extractive and Energy Sectors - 3 -14 - 3 0 -46 -59Construction and Manufacturing 122 105 111 119 126Trade and Services 33 3 6 85 166 251Net T otal Jobs 151 1 27 166 23 8 3 17

S ource: DEEPER modeling system

Net I nc reases i n Jobs a nd Wages

Job I mpa c ts by Se c tor


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Other Impacts

Environmental

In 20 3 0 alone, pollution reduction equivalent to energy use of 21,700 homes or 49,000 cars.

Property values Residential: although poorly considered in appraisals, homes

with efficiency improvements can have higher property valuesand improve value of neighboring homes Nonprofit commercial: correlation well established, lower

operating costs can result in better financing, lower premiums,higher occupancy rates, and lower turnover

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Annual avoidedemissions

(metric tons) 20 10 20 15 2020 202 5 2030 Carbon Dioxide 172 46,660 110,47 3 18 3 ,270 249,817Nitrogen Oxides 0.100 64 151 250 3 41

Sulfur Dioxide 0.0023

06 725 1,203

1,640


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Targeted Marketing

Energy Savings Potential Participation Potential

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Contractor Partnerships

Reactive spaceconditioning and water heating replacement is

large marketSkilled contracting firmsmay help to convertthese transactions into

investments in morecomprehensive energyimprovements

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Appl iance

Average lif etim e (year s)1

Reg ional Appl iance

sat ura tio n2

Estim ated annual

purcha ses3

G as Furnaces 23.68 70% 14,731Central air conditioners 19.01 75% 19,661Heat pumps 16.24 10% 3,069Hot water heater - electric 13 38% 14,567Hot water heater - gas 13 59% 22,6171. Based on DOE 2010 and DOE 2011a.

2. Based on Duke Energy Ohio 2009 and Duke Energy Kentucky 20093. Based on estimate of 498,342 households for the four-county region from

SimplyMap and the 2005-9 American Community Survey

Fo u r- c o un ty A pplia nc eRepla c eme n t Rates


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Related Policy Opportunities

Local energy use disclosure requirements In place in A ustin, TX and other citiesState savings targets & expanded utilityinvestment OH EE standard: 22% by 2025, utility programs KY some utility programs in place, considering

additional EE policy options

Federal proposed S AV

E A

ct Energy efficiency considered in property valueassessment

DOE Home Energy Score

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WHERE ARE WE NOW?

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What does it take to transformthis market?

A ccess to capitalMarket, educate, and demonstrate

Skilled workforceTechnological innovationGrow & develop local business

Supportive regulatory & policyinfrastructure

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What is our market doing now?

New financing programs withprivate sector investmentMulti-pronged branding &

marketing strategyCincinnati St. partnershipInvestment in web-based tools

Equipment financing,business loansData collection & reporting

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Call to A ction

Openness to rethinking this industryA ttract more private capitalExpand business model to engage morecontractorsCollaborate for stronger policyIncreased statewide market activityTell your neighbors, friends, and colleaguesto sign-up!

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Contact Info

A ndy Holzhauser, CP AExecutive Director Greater Cincinnati Energy A lliance

200 W. 4th St., Suite 600Cincinnati, OH 45202W: 51 3 .621.GCE A (423 2)M: 513 .3 09.7081www.greatercea.orgfacebook.com/greaterceatwitter.com/greatercea

GCEA Market Study Presentation - OKI (20120224)

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