The effectiveness of an energy efficiency program is measured in large part by the actual savings realized by the efficiency measures installed. Every program is accountable to the state’s Public Utility Commission (PUC) and utility rate payers, to ensure that public money is being invested wisely. The wise investment of public money is dependent upon how the efficiency measures are installed and operated.
Why Third Party Energy Efficiency Program Evaluations?
How often do variable frequency drives (VFDs) get installed but are then manually set to 100% speed? How often do condensing boilers have incorrect water temperatures resulting in no efficiency gain? Has the market adopted the efficiency measure already as the standard and the utility incentive is unnecessary? For the program staff and for the PUC, an analysis of the status of the market and the realization rate of the program’s measures are verified through a program evaluation (EM&V). This can be done short-term by the program staff, but evaluations are more effective if done periodically (every 3-5 years) by an outside, independent third-party for the PUC.
Program Savings versus Realized Savings
The problem inherent to any program is that claimed program savings are based on theoretical calculations for future savings prior to the implementation of the energy improvement. Often, these savings calculations are prescriptive in nature, where savings for a particular measure are prescribed based on national studies. “Because these formulas fail to take into account consumer behavior and other factors, they are highly imprecise.” Custom projects are tailored to a particular project, but still use engineering calculations based on estimates of how the measure will be used in the future. While the foundation of these savings calculations is legitimate, their realization rate might not be legitimate. This is where an evaluation comes into play.
The Value of Evaluation, Measurement and Verification (EM&V)
Energy efficiency programs use ratepayer money to develop and implement energy efficiency opportunities. Utilities are required by law to help their customers reduce their demand and/or consumption, and a state’s Public Utility Commission (PUC) typically oversees and holds them accountable. But a PUC is a regulatory body comprised of lawyers and other business type folk – not engineers that specialize in energy efficiency analysis. This is where a technical evaluator comes into play.
Independent and Unbiased
The utility program staff are technical experts in energy efficiency and have the ability to evaluate the effectiveness of the program - and they often go back at the end of a project and verify the installation, sometimes even metering and reconciling the energy savings. This is very valuable in educating the utility for future projects and in the development of future program details. But, if the same mindset that created the program evaluates the program, it is difficult to see outside this paradigm and there are often issues that do not come to light. The most effective evaluation comes from an unbiased and independent technical evaluator. This is where a third-party evaluator comes into play.
Third Party Evaluators
Third-party EM&V firms are engineering firms experienced in energy efficient building design and industrial processes, as well as energy efficiency program design. Evaluators work with the regulators and utility to develop an evaluation that meets their goals on the performance indicators in question. This outside entity performs in-field measurement (metering) of past installations and conducts surveys of customers in order to determine the program’s savings realization rate and impact on the market. Through this evaluation, it will become clear what was effective and what needs to be adjusted.
Positive Goals and Outcomes
An EM&V process is an extremely valuable method of determining how you are doing in terms of meeting your goals and identifying areas for improvement. Sometimes the best of intentions do not materialize and, in the case of an efficiency program, concepts that seemed so promising on paper do not result in the expected outcome. This is not a slight on these best intentions; it is the nature of any human endeavor. We need to keep developing new ideas, trying them out and evaluating them along the way. This will continue to keep efficiency dollars spent wisely while improving the service to customers and advancing the economy of our nation.
For more on EM&V from Cx Associates, please refer to Jennifer’s blog post EM&V Resources: Many Minds Are Better Than One and Brent’s blog post Pitfalls of Evaluation, Measurement and Verification.