Jeff McMahon at Forbes: “Energy-efficiency startups just need access to existing data—on electricity usage, housing characteristics, renovations and financing—to unlock hundreds of billions of dollars in savings, two founders of startups said in Chicago Tuesday.
“One of the big barriers to scaling energy efficiency is the lack of data in the market,” said Andy Frank of Sealed, a startup that encourages efficiency improvements by guaranteeing homeowners a lower bill than they’re paying now.
In a forum hosted by the Energy Policy Institute at Chicago, Frank and Matt Gee, founder of Effortless Energy, advocated an open-energy-data warehouse that would collect anonymized data from utilities, cities, contractors, and financiers, to make the data available for research, government, and industry.
“There needs to be some sort of entity that organizes all this information and has it in some sort of standard format,” said Gee, whose startup pays for home improvements up front and then splits the savings with investors and the homeowner.
According to Gee, the current $9.5 billion energy-efficiency market operates without data on the actual savings it produces for homeowners. He outlined the current market like this:
- A regulatory body, usually a public utility commission, mandates that a utility spend money on efficiency.
- The utility passes on the cost to customers through an efficiency surcharge (this is how the $9.5 billion is raised).
- The utility hires a program implementer.
- The program implementer sends auditors to customer homes.
- Potential savings from improvements like new insulation or new appliances are estimated based on models.
- Those modeled estimates determine what the contractor can do in the home.
- The modeled estimates determine what financing is available.
In some cases, utilities will hire consultants to estimate the savings generated from these improvements. California utilities spend $40 million a year estimating savings, Gee said, but actual savings are neither verified nor integrated in the process.
“Nowhere in this process do actual savings enter,” Gee said. “They don’t drive anyone’s incentives, which is just absolutely astounding, right? The opportunity here is that energy efficiency actually pays for itself. It should be something that’s self-financed.”
For that to happen, the market needs reliable information on how much energy is currently being wasted and how much is saved by improvements….”