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Geothermal Alliance of Illinois It’s All About Payback By Paul Bony Director of Residential Market Development March 11, 2014
Geothermal Alliance of Illinois
It’s All About PaybackBy
Paul BonyDirector of Residential Market Development
March 11, 2014
Payback
• Webster’s1. To Repay2. To Retaliate upon…..
Let’s start with the first definition………
Utility Programs & Payback• Demand side management (DSM) filters
– Utility cost test• Does the effort provide a net utility benefit
– Greater revenue or lower cost of service
– Participant cost test• Does the customer obtain a net financial benefit
– Ratepayer impact test• Does the effort support lower (or neutral) rates
– Societal Test • Does the effort reduce emissions, create jobs, etc..
– (cost effectively of course…..)
Participant Cost Test• Basic GHP Assumptions
– Springfield IL– 2,000 sq. ft. home (retrofit)– Average Construction– 3-15 year old HVAC system
• Forced air furnace with central AC –– Standard efficiency
– Electric rates –• $.09 Winter• $.12 Summer
Participant Cost Test• Basic Assumptions
– Propane at $2.11 / gallon (really?)Annual Annual Annual TotalHeating Cooling Hot Water Annual
Cost Cost Cost CostGeothermal System $ 556.00 $ 229.00 $ 410.00 $ 1,195.00 Propane with A/C $ 2,564.00 $ 561.00 $ 726.00 $ 3,851.00 ($2.11/gallon)
Annual GHP savings $ 2,656.00
Participant Cost Test• Does the Customer have a payback?
– $ 2,656.00 annual savings vs. – Incremental GHP Cost
• ? 10,0000• Less the 30% Federal Tax Credit for GHPs
– GHP life rating of • Loop – forever• Equipment 25 +/- years vs. 10-15 for
conventional….– Today’s energy prices vs. 5–25 years from now.
Participant Cost Test– What about natural gas users?
Annual Annual Annual Total
Heating Cooling Hot Water Annual
Cost Cost Cost Cost
Geothermal System $ 556.00 $ 229.00 $ 410.00 $ 1,195.00
N gas with A/C $ 1,000.00 $ 561.00 $ 353.00 $ 1,914.00
($1.08/therm ?)
Annual GHP savings $ 719.00
Participant Cost Test• Does the Customer have a payback?
– $ 719.00 annual savings vs. – Incremental GHP Cost
• ? 10,0000• Less the 30% Federal Tax Credit for GHPs
– GHP life rating of • Loop – forever• Equipment 25 +/- years
– Today’s energy prices vs. 5–25 years from now?
Participant Cost Test
• CNBC – February 19, 2014– Natural gas futures spiked on forecasts of
another arctic air blast descending on North America and unseasonably cold temperatures in March. March futures soared to settle about 11 percent higher, at $6.149 per million BTUs—a five-year high. Natural gas is up nearly 44 percent since Jan. 1, "Are we going to $15 again? No; $6 to $7, yes.
Participant Cost Test– FORBS BUSINESS - 7/22/2012 - We're Headed To $8
Natural Gas– Combine a 13 year low gas rig count, declining
production levels & ultralow storage injections, … faster than anticipated shale well declines, persistent switching from oil and coal to …gas alternatives…..Then consider unending hotter than normal summer temperatures, …nuclear plant outages, … and a La Nina induced cold winter…….any one of these can light the fuse that pushes the tenuous supply/demand balance into cardiac arrest. That’s the chain and it’s going to lead us to $8.00 mcf natural gas by the approaching winter.
Participant Cost Test
• Conclusion, with today’s low interest rates, tax credits and current energy costs, GHP’s provide most (if not all) customers with a positive payback….
Utility Cost Test
• Is the cost to obtain a utility benefit– Lower peak demand charge(s)– Increased kWh sales (with margin)– Meeting regulatory requirements
• Lower than the value of the benefit (or alternative cost)?
Utility Cost Test
• If the customer pays 100% of the measure cost, and the measure delivers a utility benefit…….
• What is the utility’s payback?– 100%?– 0%?– Infinite?
Utility Cost Test
• In my 2 home owner examples what was the utility’s cost?
• What are the utility’s benefits?– Peak (summer) demand savings– Increased off-peak electric sales– Carbon savings / offsets
Utility Cost Test
• If the utility can get the customer to pay a fee for the GHP system (interest, service charge, loop lease) what is the utility’s cost?
• What are the utility’s benefits?– Peak (summer) demand savings– Increased off-peak electric sales– Carbon savings / offsets
Utility Cost Test• Peak (summer) demand savings
– Assessment of National Benefits from Retrofitting Existing Single-Family Homes with Ground Source Heat Pump Systems
– Final Report - August 2010 • Prepared by Dr. Xiaobing Liu • Energy and Transportation Science Division • Oak Ridge National Laboratory
– Sponsored by• U.S. Department of Energy, Office of Energy Efficiency and
Renewable Energy (EERE), Geothermal Technologies Program, with technical oversight by the EERE Building Technologies Program
Utility Cost Test
• Replacing all Space Heating–Space Cooling–Water Heating systems in existing U.S. single-family homes with properly designed, installed, and operated state-of-the-art GHP systems would yield the following benefits annually:
Utility Cost Test
• A reduction of 215.9 gigawatts (GW) in summer peak electrical demand– a 56.1% reduction in summer peak electrical
demand for Space Conditioning in existing U.S. single-family homes.
• About .6 to 1 kW/ton of AC replaced by GHP
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Monthly Electric Peak Demand Comparison at Same Peak Time
Proposed EER 17.9 Baseline SEER 10
4 Ton GHP (Blue) Vs. 4 ton central A/C (Red) Same time of day peak demandeQuest modeling – Kansas City weather data
Utility Cost Test
• What is a peak kW worth to your utility?– Xcel Energy (Colorado)
• $167/kW/Yr.– Or 1 4-ton GHP = $10,020 in 20 year demand reductions
» At .6 kW/ton– Or $13,360 at 1kW/ton
• And the incremental cost of a GHP to the utility is (if the customer pays)
Utility Cost Test
• Ameren (Missouri) included the following avoided costs in its IRP (the avoided capacity costs are listed as *Highly Confidential*) • Distribution kW/Year (2014) $22• Transmission kW/Year (2014) $10• Capacity kW/Year (2014) Highly Confidential!
– So assuming its $100 $132/kw/Year • The 20 year utility value is $6,336
– At.6 kW/ton of GHP
Utility Payback
• Conclusion, For utilities with high peak demand costs, GHP’s provide a positive payback….
Utility Payback
• You have a little problem – Flat/Declining Sales– The (US) Energy Information Administration forecasts U.S. electricity
sales growth to be 0.7% per year through 2040.– EIA considers this forecast “optimistic”, as efficiency and
distributed generation will likely make 0.5% annual electricity sales growth to optimistic.
– A Fitch Ratings report predicts that U.S. electric utilities face an ongoing period of low sales growth that will challenge their traditional operating profiles. They expect reductions in electricity sales to increase at a rate of approximately 50%/year due to efficiency programs and new efficiency standards on lighting and household appliances.
Utility Payback• Add Needle Peaks to – Flat/Declining Sales
– Across the United States the ratio of annual peak-hour electric demand to average hourly demand has risen over the past 20 years.
– This higher ratio translates into decreasing average utilization levels for generators (more cost lower sales).
• This is putting pressure on rates!• Regulations requiring reduced annual kWh
sales make it worse! (more on this later)
Utility Payback
• So, do kWh sales go up with a GHP use?– Yes they do – in our 4 ton example:– Cooling kWh go down by approx. 2,800 kWh/yr.– Heating kWh go up by approx. 6,000 kWh/yr.
• So electric sales go up by approx. 3,200 kWh/yr. (with out electric water heating).
• And that poses a regulatory problem (right now)!
Utility Payback
• If your utility counts on kWh sales to make its financial model, GHPs lower pressure on rates, by spreading more kWh sales over a lower peak demand.– I.E. GHPs improve system load factor
Utility Payback
• There is one other possible solution to declining electric sales
• I call it the Colorado, Washington, California solution……….
Marijuana production accounts for 3% of California's electricity use.
A typical indoor grow room for marijuana has the same power density – about 200 watts per square foot – as a data center, according to a study, published in 2012
Utility Payback
• However, if this does not work for your utility ……
• Keep looking at GHPs……
Utility Cost Test
• Conclusion, GHP’s provide most (if not all) utilities with a positive payback….– Especially if they don’t cost you anything……– Even better if you make them a revenue
generating service…..
Societal Payback
• Lets look at one last test– The Societal Test– Does the utility effort provide greater benefits
to society than the cost of the effort– Usually applied to externalities
• Environment – a.k.a – Carbon emissions• Economy - jobs
Societal Payback
• From the Assessment of National Benefits from Retrofitting Existing Single-Family Homes with Ground Source Heat Pump Systems • Replacing all Space Heating–Space Cooling–Water
Heating systems in existing U.S. single-family homes with properly designed, installed, and operated state-of-the-art GHP systems would yield the following benefits annually:
Societal Payback
• A reduction of 271.9 million metric tons of CO2 emissions, – Which would be a 45.3% reduction in CO2
emissions associated with Space Heating–Space Cooling–Water Heating in existing U.S. single-family homes.
• At what utility cost – if the customer pays for the system…….
Societal Payback
• Plus – A savings of $52.2 billion in energy
expenditures, (which is) a 48.2% reduction in energy costs for Space Heating–pace Space Cooling –Water Heating in these homes.
– With jobs that won’t be exported!
Societal Payback
• Conclusion, by reducing carbon emissions and saving consumers money on their energy bills, GHP’s provide a very positive social benefit – And the utility does not have to provide a
subsidy…… (but you could…)
Utility Programs & Payback• GHPs pass the (DSM) filters
РUtility cost test å Does the effort provide a net utility benefit
РParticipant cost test å Does the customer obtain a net financial benefit
РRatepayer impact test å Is the effort rate neutral or support lower rates
РSocietal Test å Does the effort reduce emissions and create jobs
Utility Payback Part 2The Other Payback Definition
• To Retaliate upon…..
It is a (Trench) War out there!
Utility Payback Part 2
• Lets face it, when it comes to your environmental image, electric utilities are 90 pound wimps!
Gas industry/ solar PV guy
Public
Utility Payback Part 2
• OK, It may take more than a week, but GHPs can change your environmental image pretty darn fast, if you are willing to put in some effort (did I say it would be easy?)
Central Station Wind Power
Temperatures at 6 km (3.75 mile) depth
Central Station Geothermal Power
Central Station Solar Power
Fortunately, Illinois is not a “traditional” renewable energy “hot spot”.
Utility Payback Part 2
• The Geothermal Story– GHPs are extremely energy efficient and
yield the lowest utility bills of any residential heating and cooling systems available today. In fact, everybody wins when a home owner retrofits to a GHP.
– The home owner sees a huge reduction in their overall energy costs.
Utility Payback Part 2
• The Geothermal Story– The utility obtains a better load factor which
can lower energy costs to all of their consumers.
– Society gets the positive environmental impact from lower carbon emissions and a huge reduction in total energy consumed.
Utility Payback Part 2
• A 45.3 percent reduction in CO2 emissions associated with SH–SC–WH in existing U.S. single-family homes, Is nothing to sneeze at!
• Don’t call it increased kWh sales, call it Renewable Thermal Energy – sponsored by your local electric utility!
Utility Payback Part 2
• The Natural Gas industry’s public perception is changing …. Fast– “Unfortunately, gas is more of a gateway
drug than a bridge to a clean energy future”
• Sierra Club in response to the President’s 2014 State of the Union Address promoting the development of more natural gas
Utility Payback Part 2
Sierra Club Natural Gas Editorial USA Today 4-2-12– The natural gas industry that we know today is dirty,
dangerous and putting American families at risk. – It's time for everyone to stop thinking of natural gas as
a "kinder, gentler" energy source and renew our focus on reaching a clean energy future as soon as possible.
– The only safe, smart and responsible way to address our nation's energy needs is to look beyond coal, oil and gas, and focus on clean, efficient energy sources such as wind, solar and geothermal.
The “clean blue flame” is now associated with “Fracking”, flaring, methane emissions, SMOG, open waste pits, burning tap water and other environmental “negatives”.
Utility Payback Part 2Last Year I Told You:• Changes that have been underway for the past two
decades are leading to deep and fundamental changes in the electric industry.
• In a distributed generation and net zero environment, there is increased complexity and uncertainty for the traditional electric utility roles of producing, generating, and delivering electricity.
• Successful electric utilities will position themselves for a new low-carbon, distributed generation business environment.
So did the Edison Electric Institute
This new report from the Rocky Mountain Institute says many electric utilities already face direct competition from roof top solar and rising electric prices will bring more utilities into play in the near future.
Utility Payback Part 2
• Facebook and Microsoft ask Iowa regulators to support distributed generation – March 3, 2014
Utility Payback Part 2• “With its new battery ‘Giga Factory’, Tesla will no
longer be just an EV company, or even a Li-ion battery manufacturer,"
• "It’s positioning itself to compete in one of the biggest and most lucrative industries on the planet: the utility and power generation industry.
• “Most of its current and future competitors have considerably less vision, less imagination, a lot more baggage and less passion.”– from Greentech Media.
Utility Payback Part 2
• Solar PV is not going away, it is becoming less expensive every year, and it is gaining in consumer popularity.
A 4 kW solar PV system at $ 7/ watt = $28,000Less 30% tax credit and utility rebates = $19,600
5,124 kWh * $.105 = $538/yr.
Utility Payback Part 2• Base home (gas plus A/C)
– Base loads (appliances, plug, lighting) 9,400 kWh– Conventional A/C 4,675 kWh– Total electric use 14,100 kWh
• 4 kW PV generates 5,124 kWh
• Utility is left with 8,976 kWh
Utility Payback Part 2• GHP 4 ton retrofit (no other improvements)
– Base loads (appliances, plug, lighting) 9,400 kWh– GHP A/C 1,900 kWh– Total electric use 11,300 kWh– Heating kWh go up by approx. 6,000 kWh– Total electric use 17,300 kWh
• 4 kW PV generates 5,124 kWh• Utility is left with 12,146 kWh
Add electric hot water 3,900 kWh(only 1,000 w/ compressor)
Utility Payback Part 2
• So , if 4 kW PV generates 5,124 kWh
Do you want to sell (mostly on peak) 8,976 kWhOr
Do you want to sell (mostly off peak) 12,146 kWhOr
Do you want to sell (mostly off peak) 13,146 to (A base home has 14,000 kWh) 16,046 kWh
Do you promote green – Fracking Free Homes???
Utility Payback Part 2
• Does a 4 Ton GHP retrofit cost $28,000?– Annual N gas Savings
$ 719.00 – Annual propane savings
$ 2,656.00 • Vs. $538 savings for the same solar
investment......
Utility Payback Part 2• The Thermal leasing space is wide open• Thermal Energy Service – for a monthly fee
– You could lease a total package – including the GHP loop for thermal storage
– That probably pays better than selling kWh– Making your utility a green hero– But that is a topic for next year (or a beer
discussion later)
Utility Payback Part 2• Conclusion - GHP’s can provide:
– New Revenue/Profit Opportunities– A Cost Effective Platform to Meet
Efficiency/RPS Requirements-regulations• Especially if the focus is on peak demand and
Carbon emission reductions– Improved Load Factor (lower rates)– A “New” Customer “Choice”
• For that new low-carbon, distributed generation business environment.
Utility Payback Part 2
• This month, the Edison Electric Institute (EEI) and the Natural Resources Defense Council (NRDC) made common cause and issued a joint statement to state utility regulators on the topic of technology (mostly distributed generation such as solar) and utility cost recovery.
Utility Payback Part 2
• “Policy makers should rethink how utility costs are recovered, with consideration needed for new rate designs and new approaches that balance the desire to promote innovation while still enabling recovery of the capital investment that recognizes the value of the grid to all customers and their new uses of the grid.”
Utility Payback Part 2
• EEI and NRDC also advise state regulators to expand ‘earnings opportunities’ and performance-based incentives for services such as integration of clean energy generation and grid improvements.’
Fuel Switching
Language needs to be in place that will allow fuel switching from gas to electric for applications that save net energy when compared to gas. • Language in the Texas and Oklahoma
energy efficiency rules achieves this. • They state that:
Fuel Switching
They state that:• Efficiency programs shall be neutral with
respect to specific technologies, equipment, or fuels.
Fuel Switching
They state that:• Energy efficiency projects may lead to
switching to electricity from another energy source, provided that the energy efficiency project results in overall lower energy costs, lower energy consumption, and the installation of high efficiency equipment.
Fuel Switching
They state that:• Utilities may not pay incentives for a
customer to switch from gas appliances to electric appliances except in connection with the installation of high efficiency combined heating and air conditioning systems.
Measure Success!
Gas company!
ElectricUtility!The
Public
In Conclusion:The electric utility industry is facing tremendous challenges. GHPs provide utility, customer, and social investment “paybacks”.
Come back and we will talk about:
The case for electric utility Geo Programs (In Oklahoma)
A case study format of the efforts by electric utilities to produce financial and consumer benefits for GHP program efforts. With a focus on the efforts of Western Farmer’s and their member co-ops in Oklahoma
It’s All About Payback
Remember
Thank You For Your Attention!
www.climatemaster.com
Paul Bony
970-240-8476
Questions?If you ever need a hand you can reach me at:
Geothermal Alliance of IllinoisThe Case for Electric Utility GHP
Programs (In Oklahoma)
ByPaul Bony
Director of Residential Market Development
March 11, 2014
GHP Program Implementation
Utility
GHP Program Goals
Customer Participation
Market Barriers
Financial Barriers
Education “gap” Barriers
Utility GHP Participation OptionsRange of Utility Activities/Responsibilities
Maximum
Install loops as a utility service (Thermal Energy Service)Loop and/or GHP equipment financingRate incentivesCash incentives (rebates)Dealer/builder marketing & developmentActive consumer marketing & interest (lead) generationPassive consumer education (ads and newsletters)Minimum
• Utilities are positioned to “promote”– Trusted energy information source
• Ads, events, 1 on 1 with customers– Efficiency/energy advocate– Community involvement
• This is essential to set the stage for those who deliver goods & services
• Have a focused message
Education “gap” Barriers
Today’s Consumer
Saving more buying less
Evaluates affordability (cash or payments)
More emphasis on quality rather than luxury
Concerned with value not cheap price
Wants super sizing/super value
Wants a “deal”
Weary of words
On an “energy diet”
Education “gap” Barriers
Guerilla Marketing –What you do when you have a McDonalds (hamburger) budget and a big awareness gap
Problem Recognition – Marketing to Create Awareness of a Problem
Demographic Information to Consider:single family dwelling
value of the home
home size
Existing fuel & HVAC equipment
income level of the household = $65,000+
age of resident – generally 34 to 65
“last home” considerations
Education “gap” Barriers
Financial Barriers
• Utility strength– Public Utilities
• Not-for-profit• Government cost of funds• Long financial horizons
– For Profit Utilities• Opportunity for invested plant & rate of return
• Becoming an area of interest for 3d party financing companies– Thanks to the solar leasing model
Financial Barriers
• Consumers are (still) suffering from “cash separation anxiety”
• They “lease” everything – especially younger customers
Financial Barriers
• The trick in today’s economy is to tie the loan to the structure, not the owner/occupant. – On-bill financing – On-bill collection
Financial Barriers
• Unlike consumer goods financing, efficiency financing can provide the borrower with a positive cash flow from energy savings after the monthly payments.
• Only utilities can tie residential loans to the structure, not the owner/occupant.
Financial Barriers
Provide a GHP energy service that provides turn-key systems to residential and commercial members
At an affordable price or better yet -with a positive cash flow
Better than propane and (if possible) better than natural gas!
Oak Ridge National Labs – U.S. DOEDecember 2008
• The primary GHP market failure is the expectation that building owners should finance the ‘GHP infrastructure,’ or outside-the-building …ground heat exchanger. GHP infrastructure will outlive the building and many generations of heat pumps, and is akin to utility infrastructure (poles and wires, and underground natural gas piping).
• Piece of mind– Stable heating & cooling costs – Utility grade customer service
• Annual savings of $250 to $1,000 +
• Make it Easy to Say Yes!
• Conservatives want lower rates/bills & Progressives are concerned about the environment– Customers buy on emotion and justify with facts!
Education “gap” Barriers
Back to the future!In the beginning, utilities sold and financed technology!
Utility Program Evolution-
Market Barriers
• Motivate, and support local installation contractors.– They deliver product– Utility generates customer interest– Everybody benefits – customer, contractor,
utility
Utility Customer
Installation contractor
Home Performance Concept• Utility
– Promotion• The Home Performance “Contractor”
– Utility staff?– Performance Contractor?
• Home Improvement Providers– Product installers– GHP installers
Key Roles
Home Performance Concept
Window/door guy
Insulation guy
Siding guy
Don’t Use These “Energy” Contractors
Who will act as an energy retrofit “general contractor”
Use an Energy Expert
Home Performance Concept
Utility Home Performance Plan• Performance contractor
– Conducts a whole house analysis– Identifies cost effective measures– Arranges installation– Commissions results– Coordinates financing and utility
incentives• With utility sponsorship and oversight
Utility Home Performance Plan• Have a “program manager”
– Internal or contractor - Who wakes up every morning and says today I need to get X more GHP’s sold
• Negotiates arrangements with energy efficiency sub-contractors
• Insulators• Window/door installers• Electrical/plumbing/general construction• GHP installers and drillers
• Manages the customer’s order
Oklahoma – Case Study
Their Problem is Load GrowthAs in to Much!
Their Numbers• Future generation installed costs = $1,850/kW
– Plus interest, fuel, and O&M• 50 MW = 50,000 kW @ $1,850/kW = $92,500,000
– 25 MW residential + 25 MW commercial• 25,000 kW/2.60 kW (reduction per 4T GHP home) =
9,615 homes• 9,615 homes/6 years = 1,602/year• 1,602 homes/year divided by 23 coops = 69
homes/year/coop
Western Farmer’s Peak Reduction Target
30 MW in Reduced Capacity30,000 kW @ $1,850/kW = $55,000,000Principal only … No carbon costs considered …
Big Picture …1.4 million homes in OKAssuming 3T average & 0.65/ton reduction20% flip to Geo & do the math …Potential of 546 MW reduction in peaking capacity
Western Farmer’s Peak Reduction Target
Lessons Learned …Projected kW Reduction Actual kW Reduction
Air Source Heat Pumps 0.33 kW/ton 0.165 kW/tonGround Source Heat Pumps 0.66 kW/ton 0.65 kW/ton
(2.6 kW/4T home)
93% of rebates paid on “Replacement “& “New Construction” 80% paid on AS & 20% paid on GHP
To accomplish their our goals they realized they must …
Focus on GS and flip the historical GHP/ASHP ratioBe able to play in the replacement game
The New Way … Big Picture View
1. Utility becomes a premiere “Thermal Energy Services Provider”
- Utility installs, owns, and maintains loop for fixed monthly service fee (tariff rate) added to electric bill
- Utility contracts with 3rd party for construction and maintenance of the loop
2. Utility provides “on bill” financing/collection for equipment , installation, & basic energy efficiency improvements
3. Utility partners with 3d party audit/retrofit partner
1 kWh of energy
from the grid
Plus:
3-5 kWh of energy
from the earth
Yields:
4-6 kWh of energy
for the building
Another form of utility “plant”
for delivering Renewable
Energy to the load
The Geothermal “Utility”Own the GHP loop and bill the customer for a
monthly Thermal Energy Service
OK GHP Market Development - Game Plan
1) Need to Make A Long-Term Commitmenta) Takes time to develop a marketb) Build awareness with customers & utility employees to
gain credibility2) Need to cultivate the appropriate resources
a) Internally-with employee education b) Externally- with vendor/installation contractors and
member/customer outreach3) Need a Clear Game Plan
a) Well Defined Installation Guidelinesb) Well Thought Out Internal Procedures
Build Awareness
1) Need to Make A Long-Term Commitmenta) It takes time to develop a marketb) Build awareness with consumers and utility employees
to gain credibility2) Phase 1 - 2012
Climate Connections SweepstakesClimateMaster and TouchstoneEnergy Advertised the Toll FreeSweepstakes Line:
• Official Website• Radio Spots• Newsletters• Brochures• Digital Ads• Co-op Lobby Displays• Bill Inserts
How it Worked• Co-ops promoted the program
No purchase necessary but must meet qualifications
• Consumer calls a 1-800 Number• Call center pre-qualifies consumer • Call center e-mails leads to participating dealers as
well as co-op contact by county in which lead originated
• Call center re-contacts dealers within 3 daysto assure that dealer has contacted consumer
• Call center contacts consumer back after 10 daysto assure that someone has contacted them
Generating Leads
• Via Email• Up to 3 Dealers that cover the county in which the caller lives.
•If more than 3 Dealers cover that county, the leads will rotate
• Copied to Dealer’s Distributor• Copied to Contact at Co-op of Prospect’s Membership
The End Result
The results did not match our expectations:Customers do not respond to gimmicks……But we did get dealers and utilities talking together
Green= 0, Yellow = 1 Dealer, Blue = 2 Dealers, Red = 3 or more Dealers (Service county)
Build Awareness• Phase II - 2013
Key Players
Title SponsorTouchstone Energy Cooperatives of OK
Co-Sponsors1. ClimateMaster2. Bosch – (Florida Heat Pump)3. Water Furnace
The Concept
The goal was to challenge high school juniors and seniors to use their creativity in the production of a 1-3 minute video which delivers our message.
How Geo Works – Overview of incentives currently availableSavings Benefits – Renewable –– Environmental benefits
Then by using their social media network …deliver our message to all of their friends and family as they go online and view/vote for their favorite videos
Competition StructureRegional Competition State Competition• Five (5) Regional
competitions winner from each advancing to state finals
• Top Five (5) vote getters are judged
• Winner Scholarships1st Place - $30002nd Place - $20003rd Place - $1000
• 1st place winners school awarded $2500
• Finalist videos posted for finals online voting
• State Finalists come to OKC for interviews
• Judges interview finalists and score the group
• Winner Scholarships1st Place - $70002nd Place - $35003rd Place - $2000
• 1st place winner school awarded $2500
The End Result
• Success :a) Supported utility employee education b) Supported vendor/installation contractors
and member/customer outreach
• Play NRECA Video -
More importantly, the program generated customer awareness and interest
The End Result(lots of dealer/utility interaction)
Other Development Goals1. Gain credibility2. Cultivate contractor resources
1. Loop installers/drillers2. Contractors
3. Develop employee education & customer outreach4. Develop
1. Well Defined Installation Guidelines2. Well Thought Out Internal Procedures
Gain credibility with 3d party GHP performance validation
Phase II and 1/2
Western Farmers Geo Validation Project
Research Project Testimonial Program• Validate the 0.65 kW/T• 16 co-ops participating• 24 coordinated installs
All completed the week of July 28
• Retrofits 4T max. 10-15 yrs. old
• Sub-metered to validate Before & After @ 100+
• CRN Research $15K
• Industry contribution $60K
• Poster Children for GEO• Incentive – Free loop!• Promotion Opportunity
Customized & TargetedSeries of promo items over 18 mo.
Geo Validation Project Estimated Project Cost $315,000
The Players• WFEC and our co-op family• Cooperative Research Network (CRN)• Financial support from ClimateMaster &
Bosch …• Cooperative Research Network will write the
project report.
Geo Validation ProjectResearch to validate the 0.65 kW/ton peak
demand savingsLargest “Testimonial” advertising campaign
in Western Farmer’s historyOr anywhere else?
Geo Validation Project
Imagine . ..• 25 retrofit installations (Volunteers) • Spreading across two states• All sub-metered to acquire actual before
and after demand reduction• All coordinated to flip the week of July 29,
2013
Geo Validation Project
Geo Validation Project
Early results look better than expected …..except for a few “flyers” that are under review- bad data or ??
Build Awareness & Sales
www.gogogeochallenge.com
Phase III -2014
Information fed into real time GEO savings analysis that also becomes the customer entry and a print out for them to take home.
Batched entry data sent to IGSHPA for storing, reporting and future analysis
Customer leads sent to sponsors
Build Awareness & Sales
• Goals– 5,000 qualified leads– 500 GHP installations
Caddo Electric GHP Effort
Caddo Electric GHP Effort
• Components– Thermal Energy Service – Utility loops– Financing (low interest) for equipment– Rebates – 3d party (free) energy audits, GHP sizing, and
retrofit (shell) management
Caddo Electric GHP Effort
• “There’s one part of a geothermal system that drives the price out of most people’s range, the ground loop. There’s no getting around the ground loop because that’s the one component that makes all the difference in cost of operation between a conventional air-source system and a geothermal heating & cooling system.”
Caddo Electric GHP Effort• EUREKA! The loop cost is no longer cost
prohibitive! Caddo Electric recently launched the latest program in our “Peak Smart” family of energy efficiency incentives.
• For members who choose to participate, the cooperative will install the loop for the geothermal system and retain ownership of the loop, which means we also retain the maintenance obligation should there be any.
Caddo Electric GHP Effort
• In exchange, the homeowner agrees to provide a permanent easement for the loop as well as sign a loop agreement agreeing to a monthly thermal charge for using the loop with their geo unit. The monthly thermal charge is a minimal cost around $15-$25 per month depending on the total cost of the loop.
Caddo Electric GHP Effort
• In addition, all geothermal purchasers will receive a cash rebate of $650/per ton with hot water generation or $450/per ton without hot water generation. But that’s not all……..
Caddo Electric GHP Effort
• GHP customers are placed on the best load control rate available, which is an automatic annual savings of about 10% over standard residential rates.
• Taking advantage of this program means your final cost of installation will be less than the cost to install a high efficiency air-source heat pump which is 25-30% less efficient than the geothermal.
• Why would you want to do that?
Caddo Electric GHP Effort
• How do they do that?• High Peak demand charges in their
wholesale power bill• Embedding most of the loop program
costs into their entire rate base – as all members benefit from lower wholesale power bills!
Caddo Electric GHP Effort
• Results (less than 1 year out)– 120 GHP retrofits– 3 subdivisions
• 560 new homes total commitment
• They only serve 18,000 meters• http://caddoelectric.com
– Try their Go Go Geo videos
Thank You For Your Attention!
www.climatemaster.com
Paul Bony
970-240-8476
Questions?If you ever need a hand you can reach me at:
