US Secretary of Energy Steven Chu famously said “Energy Efficiency isn’t just low-hanging fruit; it’s fruit lying on the ground.” Apparently Secretary Chu has not tried to figure out a local rebate program or build a energy efficiency plan for a nationwide company. That fruit is there and companies want to harvest the energy efficiency gains, but there is an enormous hurdle to clear – understanding how to get the rebates that are often critical to a project’s success.
A couple weeks back, Tech Crunch published an interview with Solar City CEO, Lyndon Rive in which he complains that 50 different state regulations are holding up the rate of solar adoption. If that is true, solar has it easy.
Energy Efficiency adoption is hamstrung by the fact that there are 1000s of different energy efficiency incentive programs and navigating them can be a nightmare. These programs vary from state to state and from utility to utility. This is not just a problem for two facilities on different coasts of the country; it can be an issue for a company with multiple sites in a single state. My own home state of Massachusetts has three major electric companies and 41 municipal companies.
The DSIRE website is the closest thing to Babel Fish for energy sector incentive programs. On the site, you find that there are 1,351 different financial incentives for energy efficiency (including 1,034 rebate programs). Sounds great, but is it? Tackling this is daunting.
My fear is that much of Secretary Chu’s fruit lying on the ground is going to rot this year because customers are unable to navigate the maze of programs. State regulators require utilities to reduce their loads and allow them to allocate rate-payer funds to incentives. If the utility does not make its quota, tens of millions of dollars of penalties will ensue. It is my belief that there will be penalties unleashed across the nation as utilities tied up with regulation, and often times prescriptive direction from the regulators, will not be able to offer enough incentives to drive down load. And companies – eager to reap the benefits of energy efficiency — are throwing up their hands rather than wrestle with the complexity and bureaucracy of the rebates.
The solution? We need a single regimen (okay at least fewer) that is easier to understand and more accessible to the non-expert. We also need teams of people building working bridges between the regulators, the utilities, and large businesses. Do I think this will ever happen? Read the New Yorker piece “As the World Burns” to understand why I think that this is a major challenge.