Excerpts From – Analysis of Utility – Sponsored Home Performance with ENERGY STAR Programs in Maryland – Part 1

Executive Summary

The Maryland Energy Administration (MEA) seeks to better understand the factors impacting the cost-effectiveness of utility-sponsored Home Performance with ENERGY STAR® (HPwES) programs as reported in the Maryland Public Service Commission (PSC)-funded evaluation report produced by Itron in 2013.  In particular, the MEA is interested in recommendations for program enhancements for submission to the Maryland PSC for adoption by Maryland utilities.

SRA International, Inc. (SRA) was contracted by MEA to evaluate the utility HPwES programs and the process by which they were evaluated.  SRA was asked to provide characteristics representative of successful programs that might be adopted by Maryland Sponsors.  Finally, MEA desired input from a variety of stakeholders to add further perspective to the analysis.

Information from the Maryland PSC records, Itron and other program evaluators, and the Mid- Atlantic Technical Reference Manual Version 2.0 (TRM) was reviewed to understand the calculations used in order to derive the benefit-cost values cited in the Itron report.  Input from stakeholders was gathered in order to understand the respective opinions regarding what aspects of the programs are functioning well and aspects that could be improved.  Stakeholders included utility Sponsors, implementation contractors, participating contractors, a contractor trade association, and one of the authors of the Itron evaluation report.  Additionally, a literature review was conducted in order to categorize industry best practices and potential applicability to Maryland.  Government, NGO, and private-sector sources were reviewed as part of this study and some industry-recognized successful programs were listed as those of potential interest to Maryland.  Finally, national HPwES Sponsor data from the 2012 calendar year was evaluated in order to identify potential elements of successful programs and provide a qualitative perspective of how Maryland Sponsors perform on the basis of Sponsor-reported per-project energy savings and project cost.

The recommendations presented address two main areas—program design and implementation and cost-effectiveness.  Some key design and implementation recommendations include:  Unify program characteristics such as tactical elements, messaging, and incentives.  Involve all program stakeholders in oversight and tactical advisory work groups.  Tweak the QHEC program to improve penetration of the program and to use it as a gateway to the HVAC and HPwES programs.  Provide clear, homeowner-centric pathways into the programs with little burden during retrofit delivery.  Adopt a mix of simplified prescriptive and comprehensive performance-based incentives.  Incorporate natural gas savings into statewide HPwES programming.

SRA was unable to provide definitive cost-effectiveness conclusions due to information that was unattainable during the time parameters of the study such as the rationale for the discount rate used for the Itron evaluation and the most current version of the Technical Reference Manual released.  The recommendations for cost-effectiveness are based primarily upon industry best- practice as represented by recent standard activity and the professional experience of SRA staff with exposure to the program design and implementation for multiple programs outside of Maryland.   Representative recommendations include:  Ensure net-to-gross ratios are equitable to account for upselling from simpler programs and market transformation effects.  Consider accounting for the higher cost of renewable energy during benefit-cost analysis.  Reconsider assumptions such as discount rate and useful life factors during benefit-cost calculations.  Consider alternative screening methods (energy modeling with SIR threshold) in lieu of those stipulated in TRM.  Pursue research into project energy savings and program cost variations among Maryland Sponsors.

Source: energy.maryland.gov