DUNSKY ENERGY CONSULTING REPORT in Collaboration with VERMONT ENERGY INVESTMENT CORPORATION
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VALUING BUILDING ENERGY EFFICIENCY THROUGH DISCLOSURE AND UPGRADE POLICIES A ROADMAP FOR THE NORTHEAST U.S. A DUNSKY ENERGY CONSULTING REPORT in collaboration with VERMONT ENERGY INVESTMENT CORPORATION Philippe Dunsky, President, DEC Jeff Lindberg, Consultant, DEC Eminé Piyalé-Sheard, Senior Consultant, DEC Richard Faesy, Senior Project Manager, VEIC For NORTHEAST ENERGY EFFICIENCY PARTNERSHIPS under the direction of Ed Schmidt, Director of Regional Initiatives NOVEMBER 2009 DUNSKY ENERGY CONSULTING Dunsky Energy Consulting provides top-level analysis, strategic counsel and design of highly- effective energy efficiency and renewable energy programs and policies. Our clientele is comprised of dozens of leading utilities, government agencies and non-profit organizations throughout North America. Known for its experience, integrity, and dedication to quality and customer satisfaction, DEC is committed to developing balanced strategies for a sustainable energy future. For more information, please visit www.dunsky.ca. AUTHORS Philippe Dunsky has nearly 20 years of experience in the fields of energy efficiency, renewable energy and climate change strategies. President of Dunsky Energy Consulting, he has played a key role in planning energy policies, designing residential and commercial sector programs, advising on cost-effectiveness frameworks, assessing best practices, and providing staff training, among others. In addition to his consulting practice, Philippe is a frequent speaker at industry conferences, has provided expert testimony at numerous regulatory proceedings, and sits on the boards of a variety of private and public sector funds dedicated to energy sustainability. Jeff Lindberg is specialized in environmental policy and energy efficiency program design and analysis. His most recent recent work includes research on effective administrative models for ratepayer-funded energy efficiency programs; developing cost-benefit frameworks for multi- fuels and fuel-switching programs; benchmarking of leading energy efficiency portfolios and residential programs; and design of low-income energy efficiency programs. He holds a Master’s in Environmental Sciences. Eminé Piyale-Sheard has over 20 years of experience assisting the business sector in management, marketing and technology development, with significant emphasis on environmental and energy sectors. She combines on-the-ground experience such as implementation of energy savings and environmental management plans with significant experience conducting market studies and providing strategic counsel to utilities’ energy efficiency programs. She holds an MBA as well as a Master’s in Environmental Management. Richard Faesy is the Energy Efficiency Division Director in Planning and Evaluation Services with the Vermont Energy Investment Corporation. As a Certified Energy Rater, LEED Accredited Professional, and resource economist with more than 25 years of experience, he specializes in residential buildings, technologies and markets, with a focus on home energy ratings, energy efficiency financing, green building and effective program design and implementation. DUNSKY ENERGY CONSULTING – November 2009 Valuing Building Energy Efficiency Through Disclosure And Upgrade Policies i | ACKNOWLEDGEMENTS With sincere gratitude NEEP and the DUNSKY ENERGY CONSULTING team wish to thank those who generously funded this project, including: • The Overbrook Foundation • The Energy Foundation • The Chorus Foundation • Underwriters of the NEEP Building Energy Codes Project • The utilities of the Massachusetts RCS working group NEEP and the DUNSKY ENERGY CONSULTING team wish to extend a special acknowledgment to the Building Energy Rating Project Advisory Committee of key stakeholders, whose input and diversity of opinion proved vital to the development of the final report. Although not all members of the Advisory Committee necessarily support or agree with all analyses, conclusions and recommendations, and similarly should neither explicitly nor implicitly be interpreted to advocate for any of the content, the insights, comments and expertise of each are deeply appreciated. They include: • Ann Berwick, Undersecretary for Energy, COMMONWEALTH OF MASSACHUSETTS • Jeff Harris, Vice President – Programs, ALLIANCE TO SAVE ENERGY • Jean Lupinacci, Director - ENERGY STAR Commercial and Industrial, U.S. EPA • Julie Hawkins, Project Manager, D&R International, on behalf of the U.S. DOE • Paul Eldrenkamp, President, BYGGMEISTER INC. • Seth Kaplan, Vice President for Climate Advocacy, CONSERVATION LAW FOUNDATION • Lane Burt, Manager, Building Energy Policy, NATURAL RESOURCES DEFENSE COUNCIL • Blair Hamilton, Policy Director, VERMONT ENERGY INVESTMENT CORPORATION • Sue Coakley, Executive Director, NORTHEAST ENERGY EFFICIENCY PARTNERSHIPS Of the Advisory Committee members we wish to specifically acknowledge the US Environmental Protection Agency, the US Department of Energy and Vermont Energy Investment Corporation for their in-kind funding via their time, expertise and research materials. Similarly, we appreciate the participation and input of observers to the Advisory Committee, including Cliff Majersik, Executive Director of the Institute for Market Transformation, and Mike Winka, Director of the Office of Clean Energy, New Jersey Board of Public Utilities. We would equally like to thank members of the policy community and jurisdictional representatives who contributed to the international policy review portion of this report. Finally, NEEP staff, in managing the project and carefully reviewing and commenting on all materials, proved invaluable to the process as a whole. They include: • Jim O’Reilly, Director of Public Policy • Ed Schmidt, Director of Regional Initiatives • Carolyn Sarno, Senior Program Manager for High Performance Buildings • Isaac Elnecave, Program Manager, Building Energy Codes and Appliance Standards DUNSKY ENERGY CONSULTING remains solely responsible for any errors or omissions. DUNSKY ENERGY CONSULTING – November 2009 Valuing Building Energy Efficiency Through Disclosure And Upgrade Policies ii | [page intentionally left blank] DUNSKY ENERGY CONSULTING – November 2009 Valuing Building Energy Efficiency Through Disclosure And Upgrade Policies iii | CONTENTS A ROADMAP FOR THE NORTHEAST ........................................................................ 2 Executive Summary ............................................................................................ 3 Report Objectives ............................................................................................... 7 Value Proposition ............................................................................................... 9 Concepts and Options ....................................................................................... 15 Experience and Lessons Learned ....................................................................... 20 Policies for the Northeast.................................................................................. 26 Roadmap .......................................................................................................... 41 Note: Limitations and Caveats ........................................................................... 46 BACKGROUNDER: CASE STUDIES AND EMERGING POLICIES .................................. 50 Introduction ............................................................................................................... 51 International Policies ................................................................................................. 53 Emerging U.S. Policies ................................................................................................ 73 Early Results ............................................................................................................... 84 Keys to Success .......................................................................................................... 86 BACKGROUNDER: ISSUES AND OPTIONS FOR DISCLOSURE POLICIEs ............... 88 Approach .................................................................................................................... 89 Rating Systems ........................................................................................................... 92 Trigger Points ........................................................................................................... 111 Rater Infrastructure ................................................................................................. 113 Phase-In Strategy ..................................................................................................... 114 BACKGROUNDER: ISSUES AND OPTIONS FOR UPGRADE POLICIES ........................ 116 Keys to Success (Upgrades) ...................................................................................... 117 In Principle – Issues and Options ............................................................................. 118 In Practice – Options for the N.E. ............................................................................. 124 Administrative Needs ............................................................................................... 127 Implementation Options .......................................................................................... 129 Acronyms and Endnotes ..................................................................................... 130 DUNSKY ENERGY CONSULTING – November 2009 Valuing Building Energy Efficiency