Xcel Energy Home Lighting Product 2018 Evaluation
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Xcel Energy Home Lighting Product 2018 Evaluation December 12, 2018 FINAL REPORT Presented To: Presented By: Nicholas Minderman Scott Dimetrosky & Jeremy Kraft DSM Policy & Strategy Consultant Katie Parkinson Project Director Xcel Energy Apex Analytics EMI Consulting 414 Nicollet Mall 2500 30th St., Suite 207 83 Columbia St. Suite 400 Minneapolis, MN 55401 Boulder, CO 80301 Seattle, WA 98104 PARTNERS This report was produced by the evaluation team lead by EMI Consulting; the primary author on this evaluation was Apex Analytics. The evaluation team includes the following partners: Evergreen Economics TABLE OF CONTENTS TABLE OF CONTENTS Executive Summary................................................................................................................ ES-1 1. Introduction .......................................................................................................................... 1 1.1 Product Overview ............................................................................................................................ 1 1.2 EISA Uncertainty ............................................................................................................................. 2 1.3 Evaluation Overview ....................................................................................................................... 3 1.4 Report Organization ........................................................................................................................ 4 2. Impact Findings .................................................................................................................... 5 2.1 Key Findings: Net-to-Gross Ratio ................................................................................................. 5 2.2 Approach ........................................................................................................................................... 5 Sales Data Modeling .......................................................................................................................... 6 Manufacturer Interviews ..................................................................................................................... 7 Determination of Net-to-Gross Ratio ................................................................................................. 8 2.3 Net-to-Gross Ratio Inputs .............................................................................................................. 9 Sales Data Model .............................................................................................................................. 9 Manufacturer Interviews ...................................................................................................................18 Changes to the Home Lighting Product .............................................................................................19 Peer Program Net-to-Gross Ratios ...................................................................................................19 3. Process Evaluation ............................................................................................................. 20 3.1 Key Findings ...................................................................................................................................20 3.2 Approach .........................................................................................................................................20 Staff Interviews.................................................................................................................................21 Manufacturer Interviews ...................................................................................................................21 Benchmarking Interviews ..................................................................................................................22 3.3 Changes to the Lighting Industry (Research Objective 1) .......................................................22 Prices and Technologies .....................................................................................................................23 EISA Expectations and Preparations .............................................................................................23 Peer Utility Program Adaptations ....................................................................................................24 3.4 Underserved Markets (Research Objective 2) ............................................................................24 4. Conclusions and Recommendations .................................................................................... 26 LIST OF TABLES Table 1-1. Home Lighting Savings and Quantities, 2017 Program Year ................................................... 2 Table 1-2. Home Lighting LED Bulbs, by Retail Channel, 2017 ............................................................... 2 Table 1-3. Home Lighting Product Evaluation Framework ....................................................................... 4 Table 2-1. Model Summary Statistics (n=42 States) ................................................................................... 17 Table 2-2. Xcel Energy PY2017 NTG Calculations ................................................................................... 18 Table 2-3. Manufacturer Retrospective and Prospective NTGR, by Bulb Type ................................... 19 Table 2-4. Peer Utility Upstream NTGR, by Bulb Type ........................................................................... 19 i 2018 Xcel Energy Home Lighting Evaluation Table 3-1. Data Sources Used to Assess Changes to the Lighting Industry ........................................... 22 LIST OF FIGURES Figure 2-1. Year-Over-Year Total US Market Share by Type ................................................................... 10 Figure 2-2. Colorado and Total US Year-Over-Year Market Share by Bulb Type ................................ 11 Figure 2-3. Relationship between Program Spending and LED Sales ..................................................... 12 Figure 2-4. LED Sales Distribution Across States (2017) ......................................................................... 13 Figure 2-5. Average Upstream Lighting Incentive per LED ..................................................................... 14 Figure 2-6. Colorado LED Market Share by Retail Channel Year-Over-Year ....................................... 15 Figure 2-7. ENERGY STAR LED Market Share (2017 POS Channels) ............................................... 16 APPENDICES Appendix A: Evaluation plan ...................................................................................................................... A-1 Appendix B: Data collection instruments .................................................................................................. B-1 Appendix C: Staff interview findings .......................................................................................................... C-1 Appendix D: Lighting supplier interview findings ................................................................................... D-1 Appendix E: Benchmarking research findings ..........................................................................................E-1 Appendix F: Xcel Energy lighting sales model .......................................................................................... F-1 ii Executive Summary 2018 Home Lighting Product (Colorado) Introduction The Home Lighting Product in Colorado provides discounts for customers to purchase Methods ENERGY STAR LED bulbs through an “upstream” discount methodology. In the upstream Manufacturer interviews discount method, program administrators (in this case, Xcel Energy) work directly with manufacturers and retailers to reduce the cost of specific lighting products within their (n=8) service territory. The discounts are directly passed on to the end-user through a reduced Sales data model purchase price. This methodology has the benefits of low implementation costs and Staff interviews (n=4) minimal effort required for end-users. The 2018 Demand Side Management Evaluation Plan included both a process evaluation and impact evaluation for this product. As part of Peer utility benchmarking this effort, the evaluation team assessed forthcoming changes to the lighting industry, (n=4 utilities) underserved markets, and net-to-gross. This summary includes the key findings and recommendations from the evaluation. Fielding: July 2018 – September 2018 Key Findings The product has effective and mature The product significantly increases the Implementation of the EISA backstop partnerships between Xcel and the program amount of LED bulbs sold in Colorado and remains uncertain, causing ambiguity for implementer, as well as with retailers and increases consumer awareness of energy manufacturers and utility lighting program manufacturers. efficient products. plans. Process Results Impact Results Changes to the Lighting Industry 0.61 Recommended NTGR Manufacturer insights show that NTGR has been decreasing since 2017, which is indicative of a market The evaluation team found that The most common expected change transformation toward LEDs manufacturers and utilities alike remain to the lighting market, as seen by and expected efficiency perplexed as to the expected outcome manufacturers, is connected lighting standards for lighting. of the EISA backstop, but are planning products, including advanced lighting