Presentation by Matt Golden, Founder of Sustainable Spaces on the importance of energy efficiency measures for the home to our nation

1. Delivering On Our PromiseSustainable Solutions to Achieve OurClimate and Economic Goals

2. Agenda Rethinking Our Approach Strategies for Carbon Reduction Disconnect Between Strategy and Policy Delivering Market Transformation From Theory to Practice Pathways to Success

3. Efficiency First, Washington DC Representing America’s Home Performance Workforce Non-Profit Trade Association 400 Member Companies Active at National and State Level Supporting a performance based market for residential energy efficiency retrofitting. For More Information: www.efficiencyfirst.org

4. Carbon Saved: The Metric that Matters CARBON is the metric. Focus on PERFORMANCE and measurable results. The MARKET will innovate and deliver.

5. What is America’s Largest Source of Carbon Emissions? Carbon Dioxide Emissions From Fossil Fuel Combustion Residential Buildings Industrial 21% Buildings Passenger Cars 11.5% Transportation http://www.pewcenteronthestates.org/uploadedFiles/Climate%20Change%20101,%20Technological%20Solutions.pdf http://www.pewclimate.org/docUploads/ustransp.pdf

6. What Does Achieving our Goals Look Like? Growth Curve to Retrofit 128MM Homes By 2030 Retrofit 128MM Homes By 2030 250,000 Homes / yr. 10,000,000 Homes / yr. Home Performance – 5M Weatherization (WAP) – 3M Multifamily – 1.5M http://www.barackobama.com/pdf/factsheet_energy_speech_080308.pdf

7. 2030 Goal:25% Reduction in Residential Energy CLIMATE: Equivalent to taking ½ of all passenger cars off the road JOBS: 1.25 million direct contracting jobs ENERGY: Save as much energy as US imports yearly from Saudi Arabia COMMUNITY: Keep energy dollars local and create an annuity

8. State of the Contracting Industry “New home construction fell to its lowest pace on record in April” - New York Times, May 2009 146,600 jobs have been lost in the residential building construction industry between April 2008 and 2009. Housing starts were down 12.8 percent last month from March [2009], to an annual pace of 458,000. http://www.businessexaminer.com/blog/8232nonresidential-construction-job-loss-slows/ http://www.nytimes.com/2009/05/20/business/economy/20econ.html?_r=1&scp=2&sq=housing%20starts&st=cse

9. Home Performance Contracting A market-based* whole-house approach to retrofit existing homes for energy, health and comfort. Sustainable: Jobs in Home Performance do not require endless subsidies. Leveraged: Government subsidies stimulate private sector investment. Market-Based: Leverage business as the engine to achieve rapid growth. *WAP or Low Income Weatherization serves the market up to 200% of poverty.

10. Achieving Market-Based Success

12. Retrofit

13. Commissioning

15. Air Conditioning

16. Ventilation

17. Water Heating

18. Solar PV

19. Solar Thermal

20. Wind

22. Automobile Performance 1 ? Products 2 Performance 60 Miles Per Gallon

23. Home Performance 1 ? Products 2 Home Energy Rating System Performance 85

24. System Performance: Heating Equipment - Efficiency / Size - Improvement: 10% - 15% Behavior - Set Your Stat - Improvement: 5% - 10% Performance - Efficiency - Health - Comfort Delivery - Fix Leaky Ducts - Improvement: 30% - 50% Building Load - Stop Energy Leaks - Improvement: 20% - 40% Whole House vs. Products Savings Whole House Solution: 30% - 50% (Ducts, Insulation, Behavior, 40K BTU 90% Furnace) High Efficiency Furnace: 10% - 15% (100K BTU 96% Furnace)

26. Market innovation1990

27. Performance is Fiscal Responsibility “We should be getting the savings we’re paying for”

29. CFL subsidies account for > 80% of residential energy efficiency savings.

30. CFL subsidies will not be an allowable program after 2012.

31. 75MM rebated units, only 46MM verified installed.Product Rebate Results: Screw-in CFLs Expected vs. Realized GWh Savings 46% Less Savings January 2006 – June 2008, California Public Utilities Commission

32. Reduce Then Produce “What is all the fuss about retrofitting, why can’t we just put on solar panels?”

33. Cost Per Ton of Carbon Abatement “The Firepower of the Lowly Caulk Gun” Wall Street Journal http://online.wsj.com/article/SB123629700922046051.html

35. Reduced Lighting Maintenance Costs

37. Moscone Center: Retrofit Summary Savings / Yr Energy Reduction Payback Period Cost Energy Efficiency Solar 6 Years 4,500,000 kWh $3.2 MM $540,000 825,000 kWh 42 Years $99,000 $4.2 MM Hybrid 12 Years $639,000 $7.4 MM 5,325,000 kWh $639,000 Annual utility bill savings $429,000 Annual debt service costs (20 year bond at 5.5%) $210,000ANNUAL NET SAVINGS http://www.votesolar.org/moscone.html

38. Reduce Then Produce http://globalghgcostcurve.bymckinsey.com/

39. Technology Neutrality “Level the playing field and unleash the market.”

40. Meet Our Homeowners City: Lafayette, CA Concerns: High energy bills Daughter has asthma Drafty/cold in the winter Savings Health Climate Comfort

42. Attic Insulation: R 6.4 Fiberglass Batt (low quality)

43. Wall Insulation: No Insulation

44. Floor Insulation: No Insulation

45. Duct Leakage: 25%168

47. Air Sealing

48. Attic Insulation

49. Wall Insulation

50. Lighting Retrofit

51. Energy Star Refrigerator40% Reduction in Energy Bills

53. What is the Real Cost? 3.5 kW Solar Electric Energy Efficiency Retrofit 60% Faster 60% Less Annual Savings: $825 $825 CO2 Reduction: 2.7 tons 3.6 tons Total Cost: $28,000 $10,800 Simple Payback: 33.9 yrs 13.6 yrs 33% More * Based on carbon abatement achieved over 20 years.

54. A Ton of Carbon is a Ton of Carbon Solar Retrofit Total Cost: $28,000 $10,800 Cost to Client: $13,300 $10,168 Rebates / Incentives: $14,700 $632 Annual Savings: $825 $825 CO2 Reduction: 2.7 tons 3.4 tons *Rebate / Ton of C0 2 $246 $9 http://www.spur.org/publications/library/report/critical_cooling

55. Why Do We Value Carbon Abatement fromRenewables More than Efficiency? It’s the METER that MATTERS!

56. Section 2 Strategies for Carbon Reduction

57. California Energy Commission (CEC):Loading Order Priority Priority for use of Public Good Charges Energy Efficiency High Demand Response Renewable Resources Distributed Generation Low http://www.energy.ca.gov/2005publications/CEC-400-2005-043/CEC-400-2005-043.PDF

58. California Solar Initiative “By January 1, 2008, the commission… shall require reasonable and cost‐effective energy efficiency improvements in existing buildings as a condition of providing incentives for eligible solar energy systems” - CEC Guidelines for CA Solar Incentive Programs http://www.cleanenergystates.org/library/Reports/CEC-300-2007-012-CMF_Guidelines_CA_Solar_Incentive_Programs_Dec2007.pdf

59. California AB32: Global Warming Solutions Act Establish a statewide GHG emissions cap for 2020, based on 1990 emission levels. Local governments: 15% reductions in GHG by 2020. http://www.arb.ca.gov/cc/factsheets/ab32factsheet.pdf

60. California Air Resource Board (CARB): AB32 Implementation Plan Increased Building Efficiency and Appliance Standard 26.4 Million Metric Tons 12X California Solar Initiative 2.1 Million Metric Tons http://www.arb.ca.gov/cc/cc.htm

62. 1MM Homes Per Year

63. 125K Retrofitting Jobs

64. $13+ Billion / YearSource: California Public Utilities Commission http://docs.cpuc.ca.gov/efile/RULINGS/85173.htm

65. Section 3 Disconnect Between Strategy and Policy

66. Plans vs. Reality Strategies get it right: Set the end goal Focus on performance not product Policies get it wrong: Focus on product incentives Misaligned incentives when compared to results

67. Stimulus Tax Credit Average Credit (Dollars) 30% Capped @ $1500 (No Labor Included) 30% Capped @ $1500 (Labor Included) 30% Uncapped (Labor Included) http://www.sustainablespaces.com/stimulus.pdf

68. California State Rebates Average Rebate (Dollars) $0.15 / sqft $300 / unit $1.40 / W http://dsireusa.org/incentives/index.cfm?re=1&ee=1&spv=0&st=0&srp=1&state=CA

69. Cost-Effectiveness Annual Rate of Return (%)

70. Local Jobs Labor as % of Project Cost

71. Misaligned Priorities? Incentives Effectiveness

72. “How are these policies being implemented locally?”

74. San Francisco Climate Action Plan Residential Reduction Goals from Energy Efficiency Efficiency Solar Combined Reduction Goals from Renewables 85% of SF’s residential climate goals delivered through Energy Efficiency http://sfenvironment.org/downloads/library/climateactionplan.pdf

75. San Francisco Implementation SF - Solar Energy Incentive Program $6,000 Residential City Solar Incentive Plus: $1.50 Watt CA Rebates and Federal Tax Credits 30% SF – Residential Energy Efficiency Program No Incentives 2 kW Solar System in San Francisco Public Contribution: 70% http://www.sfenvironment.org/downloads/library/solarincentives.pdf

76. One Market ”Incentives favoring renewables disincentivizes energy efficiency.”

77. Section 4 Delivering Market Transformation

79. Performance

82. Stop picking winners

84. 20% minimum improvement in energy performance grants rebate of $3,000.

85. 5% in performance improvement adds $1,000.Currently in US House Climate Bill (Retrofit For Energy and Environmental Performance) http://energycommerce.house.gov/Press_111/20090331/acesa_discussiondraft.pdf

87. Paid over long-terms, up to 20 years

88. Reduced interest rates compared to traditional loans

91. RESNET Certified Rater

93. Let’s Apply the Future Model How does a level playing field for energy efficiency influence adoption?

95. HERS Post: 121

96. Improvement: 28%168 121

97. Retrofit with Performance Incentives Retrofit Total Cost: $10,800 Rebates / Incentives: $4,832 Cost to Client: $5,968 Annual Savings (Gas/Elec.): $825 CO2 Reduction: 3.4 tons *Rebate / Ton of C0 2 $71 45% Incentive * Based on carbon abatement achieved over 20 years.

99. Air Sealing

100. Attic Insulation

101. Wall Insulation

102. Lighting Retrofit

104. Value Engineered Hybrid Solution Solar Hybrid Retrofit Total Cost: $10,800 $17,000 $27,800 Rebates / Incentives: $4,832* $7,300 $12,132 Cost to Client: $5,968 $9,700 $15,668 Annual Savings: $825 $550 $1,375 CO2 Reduction: 3.4 tons 1.8 tons 5.2 tons Rebate / Ton of C0 2 $71 $280 $121 *Includes potential rebates from REEP incentive plus existing State rebates.

105. The Whole-House Hybrid Home Payback with Rate Increase Savings / Yr Carbon Reduction Simple Payback Cost 6.3 Years 13.6 Years 9.7 Years Energy Efficiency Solar 7.2 Years 3.4 tons $5,968 $825 1.6 tons $550 21.5 Years $9,700 Hybrid $15,668 $1,375 5.0 tons 12.4 Years Savings Health Comfort Climate

106. Finance for Immediate Savings $15,688 financed at 6% over 20 years Year: 1 10 20 Monthly Payment: $112 $112 $112 Monthly Savings: $117 $159 $230 $12,970 Total utility bill savings: $39,850 Total cost of loan (20 years at 6%): $26,880 NET SAVINGS: $12,970 * Based on Electric Rate increase of 4% per year, and Gas rate increase of 6%.

107. Section 6 Pathways to Success

108. Creating the Future Model ”Using the market to achieve scale and transformation”

109. Tier 3: Prescriptive Measures List of Measures Insulation Windows Solar HVAC General Contractor Pick from list of eligible measures Must combine measures to achieve 20% average savings or greater Lower level of incentive Program sunsets after 12 months

110. Tier 2: Third Party Rater HERS Rating HERS Rating BPI Analyst BPI Analyst Insulation Windows Solar HVAC Test-In HERS Rating Test-Out HERS Rating General Contractor (Accredited After 6 Months) Third Party HERS Rater Work scope generated through software Test-in / Test-out Retrofitting Specialty trade contractors Home Performance Contractor Any General Contractor must become accredited within 6 months of taking first incentive.

111. BPI Accredited Home Performance Contractor Tier 1: Home Performance Test-In BPI Analyst Test-Out BPI Analyst Home Performance Contractor BPI Accredited Performance-Based Solutions BPI Accredited Contractor / Staff Quality Assurance

112. Pathways to Success Insulation Windows Solar HVAC BPI Accredited Home Performance Contractor Test-In BPI Analyst Test-Out BPI Analyst Insulation Windows Solar HVAC Home Performance Contractor BPI Accredited General Contractor (Accredited After 6 Months) General Contractor Performance HERS Rating HERS Rating BPI Analyst BPI Analyst Test-In HERS Rating Test-Out HERS Rating List of Measures Sunsets After 12 Months Prescriptive

113. The Time To Act Is Now! Change the way we talk about efficiency from products to systems. Start incentivizing our success in terms of results and measure performance. Fix the imbalances in the market. Set in place the foundation for a the American Home Performance Retrofitting Industry.

114. A Foundation for Home Performance Level the playing field Make it easy to say yes Drain the swamp

115. Delivering On Our Promise Sustainable Local JOBS Cost Effective CARBON Abatement Significant Homeowner SAVINGS Effective Use of STIMULUS Seize this opportunity to achieve our climate and economic goals

116. Delivering On Our PromiseSustainable Solutions to Achieve OurClimate and Economic Goals For More Information: www.efficiencyfirst.org