Sierra Resource Consultants co-founder Tom Hines outlines the next generation of utility programs, including virtual power plants and load-flexibility incentives, and shows how builders can provision homes so owners keep earning incentives over the life of the house.
00:00:01:23 - 00:00:25:10
Mike Collignon: You know, we're halfway to the weekend and I hope you all are staying cool out there. It's been really hot for an enormous amount of people, both in the United States and beyond. You know, it really makes this year's observation of air conditioning and appreciation days all the more relevant now, while you're hopefully staying cool somewhere. We're all set to learn about the next generation of connected communities utility programs that are happening right now.
00:00:25:12 - 00:00:58:03
Mike Collignon: These new programs reward builders and homeowners the valuable incentives to enable homes that can shift consumption to align with times when renewable energy is available. Now, our guest is going to help us figure out how to tap into these opportunities and provision your homes to take advantage of this new era of clean energy programs. Joining us today for his Green Builder media debut is Tom Hines, a residential energy efficiency expert with more than 20 years of experience in program design, implementation and evaluation from 1997 through 2014.
00:00:58:04 - 00:01:32:20
Mike Collignon: Tom worked with the Arizona Public Service Company in designing, developing and managing the company's portfolio of residential energy efficiency programs, including new homes, existing home systems, home performance, consumer lighting products, pools, multifamily behavioral conservation, and energy efficiency financing programs. Now, Tom has designed, developed and managed award winning, multiple award winning energy efficiency programs, including the app's Energy Star Homes program and the app's Home Performance with Energy Star program.
00:01:32:27 - 00:01:59:04
Mike Collignon: Now, before we hear from Tom, I wanted to tell you about Power Shift Envy Energy. It's a program that helps residential and business customers conserve energy and save money on their power bills. Power shift is a one stop resource to find energy efficient products and services. For more information, please visit in the Energy Powershift. Now, during the course of today's presentation, you can submit questions for our guest.
00:01:59:06 - 00:02:13:12
Mike Collignon: Simply use the questions box that you see on the right side of your screen. I'm going to review those questions and pose those to Tom during the Q&A time that we've set aside after his presentation. All right, Tom, welcome to the program.
00:02:13:15 - 00:02:42:08
Tom Hines: Thank you. Mike. Just checking. You can hear me. Okay. Sounding good sir. Great. Thank you. Thank you, Mike and everyone at Green Builder Media and everybody who's here on the line for this presentation today. I'm really excited about this topic. As Mike said, I've got about almost a 30 year career now and really working mostly in the utility industry, but trying to use that work with home builders, with the building industry, both retrofit and new homes.
00:02:42:10 - 00:03:21:10
Tom Hines: A longtime member of the Energy Efficient and Environmental Building Alliance on their board. ResNet member. So a lot of work in my career interacting between the built environment and the utility system and the grid. So today, I want to talk to you a little bit about kind of a new generation that we're seeing in utility programs. And so not only on energy efficiency, but also on creating what we call virtual power plants that act like a power plant that can be dispatched, but it's demand that's being dispatched in the time when there's need for like, peak load management.
00:03:21:10 - 00:03:42:10
Tom Hines: And so it's much more. It's much more dynamic than energy efficiency and has a lot more resource value for utilities these days. And I want to make sure that folks in this audience understand all the opportunities and where this next generation of programs is going to head, and how you can benefit. And your homeowners that you work with can benefit.
00:03:42:11 - 00:04:01:03
Tom Hines: So what we call is helping smart owners, homeowners get paid to flex their energy use. And I'm going to talk about how that's a real thing, not only today, but will be more so in the future. So just a little bit about my company. I work at a company called Sierra Resource Consultants. I'm one of the founders and principals of the company.
00:04:01:04 - 00:04:24:01
Tom Hines: We started in 2013 with the idea of really trying to optimize the utility system around efficiency and think through, like, the entire holistic way that we're going to get to 100% clean energy. Most of the clients that we work for are utilities and government organizations, who are focused on getting to 100% carbon free energy goals in the future.
00:04:24:01 - 00:04:51:28
Tom Hines: And so we do everything from policy to strategy to program design to evaluating programs, and ultimately understanding how to innovate programs to get to the next generation that we need to get to in terms of clean energy. And so we really like to kind of drive that innovation. And so this is something that we've been working on that we feel is really something that the building industry can take advantage of.
00:04:52:00 - 00:05:11:18
Tom Hines: And so let me go to the second slide here. And what I'd like to do is start digging in. And I'm going to start digging in by talking a little bit about the, the energy industry and some, some real revolutionary trends. I've been in the energy industry for almost 30 years, and we are at a really revolutionary point in the industry.
00:05:11:19 - 00:05:44:06
Tom Hines: It's a point that I got into the industry to try to to influence. And so it's exciting times, but it's also challenging times for the utility industry in terms of meeting ongoing clean energy needs, affordability needs and reliability needs from customers. So I'm going to spend a little bit of time talking about this, but I want to make sure that everything that we think about is applied back to what matters to you as a builder or a renovation contractor who's thinking about ways to improve the efficiency of the built environment.
00:05:44:07 - 00:06:07:15
Tom Hines: So these ten trends I've kind of organized according to climate utility policy, the power grid itself and what's changing about the grid and customers. So first climate, it's really, you know, no news to anyone that we've gone from much more predictable weather conditions to more extreme weather events. I live in Phoenix, Arizona, where it is going to be 118 degrees today.
00:06:07:15 - 00:06:34:21
Tom Hines: I think that's the second highest all time temperature recorded in Phoenix. We've had 17 or 18 days in a row, over 110. Phoenix is hot, but this is extreme. And what we're seeing is certainly, you know, a lot of what we would call 100, 100 year weather events are happening at a frequency of more like a decade. So what that does for utilities who have to plan for the need for energy is it creates higher peak demands.
00:06:34:21 - 00:07:02:12
Tom Hines: It also, we have more extreme weather events like storms that that are also impacting utility reliability. And so utility planning where utility planners have to plan typically 15 to 25 years into the future, has become much more difficult to try to identify. How do you meet resource needs when there's a lot more uncertainty in future weather conditions? So the other thing, you know, overlay all of these things that are happening at once.
00:07:02:12 - 00:07:31:22
Tom Hines: So in the utility policy space we've gone from in history really just thinking about how to generate electricity. That was the most reliable and affordable. And now we're really thinking about clean in a new way. And so historically, no carbon policies. And now into the future, you see both states and individual utilities who have adopted goals or mandates to decarbonize and have 100% clean energy by 2015 or 2050 or sooner.
00:07:31:24 - 00:07:58:09
Tom Hines: The earliest are at 2030, which is seven years away. And then, you know, in the utility scale, that is that's like an overnight change in the utility system. So very aggressive carbon decarbonization goals, which means retiring some current generation and then bringing on a lot of new energy resources in a very, very short period of time, which has a ton of different implications on the system.
00:07:58:12 - 00:08:32:05
Tom Hines: We've gone from really thinking about multiple fuels to, you know, for both transportation needs and building needs. And really, for now and in the future, you see both states and utilities and utility policy organizations are calling for future electrification again, around that goal of decarbonization. And just to give you a sense of the scope, about 55 to 75% of all US customers today, their utility today has already made a commitment to decarbonize by 2050 or sooner.
00:08:32:05 - 00:08:57:09
Tom Hines: So this is the vast majority of of US utility customers have a utility that has made this commitment already. So again, exciting times for somebody like me who's been promoting clean energy for a long time. But it means a lot of things are changing in the industry very quickly. The other thing is, you know, moving from really in the past, when I started my career, typically utilities had a service territory where they were the only provider in that service territory.
00:08:57:10 - 00:09:28:00
Tom Hines: Now, in the future and in the recent past, you've things seen things like deregulation, deregulation, where other providers can enter a market and it's not just one utility. A new federal ruling came down called Ferc 2222, that allows for consumer devices and consumer energy to be bid in to wholesale energy markets for the first time and not just use retail utility rates, but potentially it in capacity to wholesale markets.
00:09:28:00 - 00:09:56:00
Tom Hines: So that's a big game changer. That's just occurring now in California and many other states. They've started a new type of utility called a community choice aggregator. And that gives customers in that local service territory the option of choosing from their legacy utility, or possibly having their generation or their energy generated by an alternative supplier, typically an alternative supplier that's already 100% clean energy.
00:09:56:00 - 00:10:22:10
Tom Hines: And then this real advent and growth of of distributed energy resource or Der aggregators, I'm going to talk a lot more about distributed energy resources. And these aggregators are companies that many of us, you know, hear their names on a daily basis. Google, Tesla, Generac and many others who are in some cases much larger than any utility in the United States.
00:10:22:10 - 00:10:48:02
Tom Hines: And what they're doing is they're aggregating they're increasingly thinking about aggregating all of the different consumer devices and energy, using appliances that they've sold to provide demand side management and even supply side on the solar side with with aggregators like Sunrun. And so, again, from a monopoly two ways, lots of different ways that energy comes into the system, which makes this a lot more complex.
00:10:48:09 - 00:11:19:21
Tom Hines: Then thinking about the grid itself, we've gone from very centralized energy generation power plants that we're sending, sending energy out to customers. And now distributed generation is starting to become more and more part of the picture, where rooftop solar systems and other wind generators and others throughout the service territory are moving energy back and forth, which is created the situation that we go from one way power flow on all the utility transmission system to two way power flows that are happening to and from users.
00:11:19:24 - 00:11:45:04
Tom Hines: The grid was not actually designed to do that. And so we're changing that in one generation where, you know, of time, we're changing that whole cycle of how the grid was built, which means that in many cases, what we're having to do in the past, we built supply to meet what we forecasted for the energy demand, and now we are adding more and more intermittent clean energy supplies.
00:11:45:05 - 00:12:05:03
Tom Hines: When I think about, you know, think about solar, which produces energy wonderfully in the middle of the day, not so much in the morning and the and the early evening, and then not at all at night. We don't have enough storage to store all that energy. And so we now need to manage demand to try to accommodate that intermittent supply.
00:12:05:03 - 00:12:33:25
Tom Hines: When a cloud comes over or when solar goes down, we need to be able to flex demand to match that. As a result of all those things, what we've seen is a very highly reliable grid, one of the highest reliable grids in the world. And reliability has actually been declining both in the United States and in Europe as a result of a lot of intermittent supplies, more extreme weather, and the move to electrify a lot of things.
00:12:33:25 - 00:12:59:15
Tom Hines: And that is only increasing with electric vehicles. So peak demand on the grid is increasing. Utilities need to do a lot more to manage that. And so that's where customers come in. Number one, in the past it was very little competition for customers in a regulated monopoly type market. Now there's a lot more competition for those customers. And at the same time, in the past it was kind of customer disinterest.
00:12:59:15 - 00:13:24:29
Tom Hines: And now there's a lot more savvy energy users. And meanwhile utilities, if you look at utility integrated resource plans, many of them for the future are counting on customer sited resources supplying a quarter or more of their energy. So again, we are just getting into a future where we're going to see a lot more of sort of trading energy between consumers and central power plants on the grid.
00:13:25:02 - 00:13:29:08
Tom Hines: Next slide.
00:13:29:10 - 00:14:00:16
Tom Hines: So I just wanted to kind of give you guys a bit of a snapshot to say a lot is changing on the grid. So the next is what what's that requiring utilities to do about it? I mentioned that utilities are much more in need of help from customers on the demand side, as the supply becomes more intermittent and less predictable, and demand actually becomes less predictable due to climate, what utilities need to do is work with customers to try to be able to create more flexible demand.
00:14:00:16 - 00:14:25:28
Tom Hines: And so what is starting to be developed are what we call virtual power plants. And virtual power plants are comprised of aggregating a lot of customer sited resources together into something that can be dispatched that looks like a traditional power plant, but in fact is managing demand. So this is a recent I pulled this chart here on the right from a recent utility industry article.
00:14:25:28 - 00:14:52:08
Tom Hines: And what it shows is that traditionally, utilities have really focused their energy efficiency programs and some demand response programs on the very energy proactive customer. That's sort of the one side of the bell curve and really had not really sought to engage as much with the vast majority of customers who, again, were kind of customer who were not that interested in managing their energies on a daily basis.
00:14:52:08 - 00:15:22:03
Tom Hines: And so what utilities need to do now, if you look at the squares on the left, is engage with new clean energy resources, many of them sited at customer sites, rooftop solar battery storage and other distributed energy resources. Utilities are thinking and employing a lot of new dynamic rate designs to try to use economics to encourage customers. It's basic supply and demand, and utilities have to manage the supply and demand instantaneously at all times.
00:15:22:03 - 00:15:42:00
Tom Hines: So can they use different rate designs, much more time differentiated rates? You're going to see a lot more time of use rates and even demand rates being applied to residential customers to encourage customers to shift load off of that feet. They can manage their energy costs as a result, and they reduce cost for all customers on the grid when they do that.
00:15:42:01 - 00:16:04:11
Tom Hines: So as a result of all that, lots of new customer programs and customer programs that are much more dynamic and have like ongoing interactions with customers to help manage their in-home devices for the betterment of that customer as well as the grid. To do that, you need lots and lots and lots more customer engagement. Typical utility energy efficiency programs have been.
00:16:04:13 - 00:16:24:18
Tom Hines: I'm going to give you a rebate once when you purchase that piece of equipment, we put it in. It runs. I don't have to think about engaging with you on an ongoing basis. So utilities need to think about retaining customers and program and enrolling them, engaging them, retaining them, and positioning really for more energy management options in the future.
00:16:24:18 - 00:16:45:20
Tom Hines: So that's kind of setting the stage. Now for what does that mean for folks within the green building industry? How can you help your interested consumers find out more about these and actually take advantage of these programs? So we'll go to the next slide.
00:16:45:22 - 00:17:04:17
Tom Hines: Before I dig into the opportunities, what I want to talk about really quickly here is just set the stage for you all. In terms of I've mentioned the term demand response a couple of times, and I know that I know everyone here is familiar with energy efficiency, but I'm not sure if folks and demand response is much more a utility industry term.
00:17:04:17 - 00:17:27:11
Tom Hines: But what it means is literally will the demand out there that I see on the grid from individual homes and businesses, can I influence that demand, and will it respond to whatever it is that I create and a program to try to influence that demand? And that is typically done either to manage the very, very peak of energy use at the hottest or coldest day of the year.
00:17:27:11 - 00:17:56:28
Tom Hines: And increasingly, it's also being done to manage extremely low load conditions on the grid. And what we mean by that is low net load being supplied by traditional resources on the grid and not being supplied by customer sited solar. So there are times now on the grid when we see actually back flow of energy back to the generator, and that causes a number of issues on the grid around voltage and frequency support and other things that can cost a lot to manage.
00:17:56:28 - 00:18:19:27
Tom Hines: And if you don't manage those things, they can result in negative consequences for customers. And so with, you know, things like outages and things like actually damaging equipment if you get outside of voltage ranges of things. So what utilities need to do is think a lot more about how they engage with customers to have this instantaneous demand flexibility.
00:18:19:29 - 00:18:41:22
Tom Hines: There are three main approaches that utilities take. I'm going to actually start with the one all the way on the right, because that is the simplest. I call it kind of old school demand response. And that is simply working with consumers through some kind of a feedback mechanism. In the past, it was literally like a call to conserve on a peak day, a voluntary call.
00:18:41:25 - 00:19:10:12
Tom Hines: We are doing that today with programs where we're actually designated energy saving days, like five of the peak days in the summer. But more and more, we're working with technologies like whole home energy monitors that are helping customers to see their instantaneous demand, and using that and tips that we can create on those that are very customized, proactive tips that say, if you did this, you could better manage your energy use for both the grid and your own purposes.
00:19:10:12 - 00:19:32:14
Tom Hines: And again, those those are great. And that feedback loop is what customers really need to be able to manage their cost. But it's even more powerful when it's actually linked with something around a time of use rate. So if I can now give you real time feedback and appliances that can actually manage to those rates, then I don't have to think about it so much, right?
00:19:32:15 - 00:19:57:13
Tom Hines: I can get a proactive message to say, do this right now and you'll save. Or my appliance directly makes that adjustment to save me based on the utilities rate. And so I've done a lot of work with Arizona Public Service. Arizona Public Service currently has over 60% of their customers who have enrolled in one of these time of youth rates, and those customers do an amazing job of managing around those rates.
00:19:57:13 - 00:20:18:12
Tom Hines: And I have a lot of data that shows that customers get it, and they are already programing their devices like smart thermostats, to manage around those rates. And certainly, you see, most electric vehicle manufacturers have some type of a delay for charging so that you can delay that charge until the peak period or the peak period is over.
00:20:18:15 - 00:20:52:14
Tom Hines: What's interesting about that is if every vehicle decides to charge right at 7 p.m. when the peak period ends in a particular utility, you're actually going to create a new peak. And so static rates are not quite enough to manage what's a very dynamic, flexible system. And so ultimately where utility programs are going is number one, we're trying to use all of these approaches, but the one that provides the most real time flexibility and the one that we consider really, truly a virtual power plant is a direct dispatch program.
00:20:52:14 - 00:21:16:22
Tom Hines: And the way those programs typically work is the utility will send a signal through the cloud to some kind of an aggregation provider. So that is well, I've called here and what we typically call a platform. I'm trying to stay away from too much jargon, but I thought Durham's is interesting. D.R. is what we said earlier distributed energy resources.
00:21:16:22 - 00:21:52:02
Tom Hines: And so for utility they will contract with a provider for a Durham's platform. And that is a distributed energy resource management system. All that system does is aggregate a number of devices across different device classes. Like I could have one Durham's that manages all the smart thermostats, all water heater controls that are connected, and all batteries. And my all three of those different programs puts them on one pane of glass for my operator to be able to see them, to be able to control them and dispatch them.
00:21:52:02 - 00:22:20:19
Tom Hines: And the way that those are managed is through terms and conditions with participating customers. Customers get paid for providing that capacity. And, you know, and a certain number of event times per year that they would participate. And those payments can really add up for customers to significantly reduce energy costs. And in the case of most of these, customers don't even notice when when events are actually being dispatched.
00:22:20:20 - 00:22:50:21
Tom Hines: So this is really the thing that's the most growing area of this new virtual power plant concept, where utilities will be working with devices. By the way, the utility doesn't directly manage those devices. They're typically working through the aggregator, who then works with the device partner, who is the OEM, the original equipment manufacturer usually. So I do programs where, you know, I have Google, nest, Honeywell, Emerson, and a number of other different thermostat brands.
00:22:50:21 - 00:23:17:18
Tom Hines: They're all managed on the same platform. But all of those signals go back to the original device manufacturer, and they're the ones that make the adjustments down to the home level. And so that's the way these work and the way that customers actually end up being directly rewarded in exchange for maybe a two degree thermostat adjustment that, at scale, can provide hundreds of megawatts for utilities.
00:23:17:20 - 00:23:33:06
Tom Hines: So just wanted to go through those three primary approaches that utilities are using. And this will get important as we kind of think about what the opportunities are for builders. Next slide.
00:23:33:09 - 00:24:16:05
Tom Hines: All right I know it's a builder and builder market. So I want to talk about the built environment. Right. And so here we've got a home in the center whether it's a new home or a retrofit home. I wanted to talk about all these different devices, but I want to start with the home. And first of all, these devices are all potentially connected energy using products that utilities are now seeing as D or distributed energy resources that can be dispatched and change the customer's load shape or the way that they use energy to benefit all customers on the grid and actually to benefit that participant in terms of getting paid or getting a reduced
00:24:16:05 - 00:24:48:25
Tom Hines: bill through rate savings. So the first thing is I want to make sure that I that everyone understands, I believe energy efficiency is sort of the the glue that holds all this piece together, particularly when we're talking about thermal envelope things. Right. We talk about making adjustments to smart thermostats. The thing that works best with that is when you have a good thermal envelope, you have reduced duct leakage, minimal infiltration, and you have a home that's built in a way that it can be more flexible in a way that uses energy.
00:24:48:26 - 00:25:21:14
Tom Hines: In other words, think about it this way it needs less frequent inputs of energy to maintain comfort on extreme weather conditions. Okay, you guys are building those homes today, so those homes are the natural candidates to them. Think about adding more value by installing connected devices and enabling consumers to take advantage of this energy revolution. And so I'll just kind of go around the horn here and talk about how each one of these could be dispatched and how it would work.
00:25:21:15 - 00:25:44:22
Tom Hines: Right. So electric vehicles a lot being managed today around rates. But as we talked about, the utilities are very concerned that eventually if it's just a rate, then all consumers are going to set their vehicle to charge right after that rate ends. And we're going to actually create a new peak. Electric vehicles are the newest, largest load increase in the utility industry since the 1950s.
00:25:44:23 - 00:26:07:03
Tom Hines: Electrification, you know, in terms of a new device and a new energy end user that's going to require lots of energy generation and so ways that we can. So number one, thinking about number one EV pre wiring. So that making sure that homes are set up for EV you know for electric vehicle charging in the first place and then trying to manage that charge.
00:26:07:03 - 00:26:28:00
Tom Hines: And so installing connected charging infrastructure and ways that we can like proactively manage with customers to say, when do you need your vehicle? We'll make sure you have a minimal charge in place and then we may delay when you, you know, when we charge it until not right after the peak period, but maybe when carbon's lowest over the middle of the night.
00:26:28:00 - 00:26:55:12
Tom Hines: So it's a way that we can kind of work together to create a better clean energy future. And in a way, that electric vehicle that is a storage on wheels can actually use that energy, draw energy from the grid when it's the most cost effective and the least carbon intensive. So and then eventually thinking about how electric vehicles, the vehicle to grid or vehicle to home and ways that that is truly an energy storage mechanism on the grid.
00:26:55:15 - 00:27:21:10
Tom Hines: And so that is really the sort of the most nascent in a way. Smart thermostats, on the other hand, is the one I work with, a partner called Energy Hub at Arizona Public Service, and Energy Hub has now aggregated about 1 million total devices. The vast majority of those are smart thermostats across the United States. So Energy Hub is an aggregator that works with many, many of these utilities.
00:27:21:10 - 00:27:44:02
Tom Hines: But they're only one of many aggregators. And so just that one aggregator has already aggregated over a million of these distributed energy resources. So it's already a very, very real way that utilities are meeting resource needs. Matter of fact, in Arizona, we called smart thermostats four out of the last five days, and consumers responded. And it was a way that we can maintain reliability and affordability on the grid.
00:27:44:04 - 00:28:07:26
Tom Hines: So smart thermostats again I talked about this as just small thermostat adjustments that collectively, when you think about the 80,000 thermostats that are in enrolled in the Apps program, you know, that collectively looks like over 100MW. When we when we dispatch all those ones, hundred megawatts is basically two peaker plants on it for a utility that did not need to get built.
00:28:07:26 - 00:28:35:06
Tom Hines: That's how we get to clean energy in the future. So smart thermostats have been the most scaled. They also have the most customer impact. If we're not thinking hard about comfort, we do a lot of things like prickling homes sometimes, and certainly thinking about ways with both home performance contractors and new home builders that we build the flexibility into the thermal envelope of the home to allow that that thermostat adjustment without real big comfort impacts.
00:28:35:13 - 00:29:00:18
Tom Hines: The next one I'll touch on is water heating controls in Arizona again, and in some states, not a big impact on peak, but wire heating by moving water heating around it provides a very low cost storage mechanism. Water heating tanks are a thermal storage battery, essentially that is installed in pretty much every home today, so let's use those to help balance the grid on new homes.
00:29:00:18 - 00:29:25:14
Tom Hines: We're really thinking more about installing electric heat pump water heaters and on existing homes. Can we do retrofit controls on existing electric resistance tanks and again, use those to shift energy around rates around carbon and around peak, as well as integrating solar? So can we dispatch water heating when there's too much solar on the grid? You know, you still have to balance demand and supply at all times.
00:29:25:14 - 00:29:55:06
Tom Hines: And at times in the US today, we're actually curtailing solar that we can't use because there's no place to put it. So we're putting a lot of that energy into water heating tanks today in the day, rooftop solar and advanced inverters again. That's where a lot of the energy generation of the future is going to come from. The advanced inverters allow us to do things like regulate frequency and voltage and other things on the system that are important, particularly, as you know, solar is an intermittent resource.
00:29:55:07 - 00:30:21:00
Tom Hines: And then finally battery storage, reducing peak, using those batteries to actually take energy from the grid when we have too much slower on the grid and we don't know where to put it. And so really flattening that overall grid kind of load shape with all of these devices. But batteries, what we call the Swiss Army knife of distributed energy resources because they can create load and they can reduce load at same time.
00:30:21:02 - 00:30:24:25
Tom Hines: Okay. Next slide.
00:30:24:28 - 00:30:52:04
Tom Hines: And so quickly I wanted to touch on this that why why are utilities doing this. We talked about it because they need it and they need it for these things on the right. The customers really value number one. It's table stakes for utility. You have to be safe and reliable. Number two, you want to be affordable and to try to produce energy as efficiently as possible so that, you know, customers can take advantage of affordable electricity.
00:30:52:04 - 00:31:17:24
Tom Hines: And increasingly, we want to do that. And customers value doing that in a way that's using clean energy resources. We can also drive bill savings if we're able to match consumption with those clean energy resources, because those clean energy resources, by virtue of the way that they're set up, they don't have fuel costs. And so they're typically not only low carbon but low cost.
00:31:17:25 - 00:31:51:12
Tom Hines: Once that capacity is built, we want to use all of that energy. We can then on the grid side, when we think about it, all of that translates really into locational value. So if we can think about where all these Ders are on the grid, the transmission and distribution system can benefit by being able to dispatch them flexibly and make sure that we're not overstretching a particular transmission or distribution system, feeder or substation or transformer, or in cases of low load conditions, balance that out.
00:31:51:12 - 00:32:20:14
Tom Hines: So we're not having voltage issues. You know, demand reduction value across the board reduces future capacity costs. You know, and that capacity value we can bring from distributed resources, if it's less expensive than building that from a centralized power plant or helping to reduce the total cost of service while meeting our energy needs. And then finally, it's clear you see the environmental value from clean energy and then the energy value.
00:32:20:16 - 00:32:46:20
Tom Hines: And we optimize usage around when we can use that essentially free kilowatt hour that's coming from renewable generation. So that's kind of how a little bit about the value stack. And again, why utilities are going to be forced to move harder into these kind of programs in the future. Next slide.
00:32:46:22 - 00:33:13:08
Tom Hines: And so kind of coming all the way back full circle, I promise you I would get it to what matters to you guys. So hopefully and I and if you have any questions about all the stuff I just presented on the grid, please chat those in. I'd love to. I'd love to make sure I clarify anything. I try to go through a lot of pretty hard core utility side planning stuff in a very quick period of time, because I think it sets the stage for this is different.
00:33:13:08 - 00:33:38:03
Tom Hines: I've done utility energy efficiency programs for 25 plus years, and the last five years has been significantly different in how we're thinking about this and in the opportunities that I think it creates for the building industry. So I wanted to pause here and just talk about some direct benefits for builders and contractors, and then some benefits that you can translate for your buyers to make what you do more valuable in the market.
00:33:38:04 - 00:34:07:04
Tom Hines: And on the left. This is actually a recent article from a couple of years ago from PV magazine that actually talks about the household scale virtual power plant has arrived. So there's that VP or virtual power plant I was talking about and not surprisingly, look, there's the home. There's all the things we just talked about. There's your HVAC load, which is controlled by a smart thermostat, your electric vehicle, your water heater.
00:34:07:05 - 00:34:37:14
Tom Hines: See all those little Wi-Fi symbols? All of them. Wi-Fi connected, battery storage, distributed PV, that is all being aggregated up through a A or distributed energy resource management system, and ultimately being integrated into the utilities, what they call ADM or advanced distribution management system. That is the software for utilities that controls the grid on a minute or second by second by basis.
00:34:37:15 - 00:35:03:17
Tom Hines: Right. So balancing at all times. And so you're integrating these distributed resources right into that system so that they look to their visible to the utility. They're manageable by the utility. If you think about a traditional energy efficiency we installed stuff. We were blind to it. We hoped it was there when we needed it, but it wasn't truly viewed as a resource because you didn't see it and you could never really control or manage it.
00:35:03:18 - 00:35:30:11
Tom Hines: That's the game changer here. And so for builders and contractors who recognize this, and I'm going to talk to you about a project that we're just starting that I think is going to show you even more about how we get there and where we're going in terms of brand value, ESG leadership, particularly on the, you know, for home builders and those who are are in the looking for investment dollars.
00:35:30:14 - 00:35:52:02
Tom Hines: The investors are very, very interested in what are you doing to manage this issue? Leaders in the leaders in the future will be ones who have been able to address this, because there's a big opportunity here to add value. I always point out to builders, this will be coming in codes. I had a slide in here and I ended up taking it out to save some time.
00:35:52:02 - 00:36:20:10
Tom Hines: But the last coach forum last year, there was a whole section on Ders and future codes, and so Ders will be showing up more and more in codes. We'll take advantage of the opportunity to really, you know, market these things to your home buyers before it just becomes standard practice. It allows you to help demonstrate performance and just demonstrate ways that, you know, you can return value back to your home owner and return value in a couple of different ways, right?
00:36:20:11 - 00:36:56:28
Tom Hines: First of all, reduced operating costs improve comfort and then the ability to not only take advantage of upfront utility incentives like we have in the past with energy efficiency, but also ongoing utility incentives for the lifetime of your home that reward you for being able to flexibly use energy. And you can see I'm going to show you some examples where those kind of incentive dollars can add up to some significant energy bill savings for consumers over the life of the home, making that home a more valuable investment for them, and a more affordable investment.
00:36:57:00 - 00:37:01:28
Tom Hines: Next slide.
00:37:02:00 - 00:37:29:21
Tom Hines: Okay, so thinking about this in terms of opportunities. And like I said I wanted to give you a range. And it is a range. The thing that's challenging about this is that utilities have different needs in their service territories. Each state has a different regulatory policy body. And all of this energy policy unfortunately takes time. And as a result, it becomes a bit of a puzzle for folks who are outside the industry.
00:37:29:22 - 00:37:58:28
Tom Hines: One thing that my company tries to do is make this easy for folks who want to lean in. We want to make it easy to translate how utility programs work and how you, as a home builder or a contractor, can benefit. So I'd love to hear anything and follow up with me afterwards. I'll put my contact info in here about, you know, how we can make sure that this isn't trying to read a foreign language for you, but that we really think about how you.
00:37:59:00 - 00:38:26:16
Tom Hines: Because I really believe that you should be thinking about what are the best utility opportunities that make sense for me today and kind of let's prioritize together. So so just thinking about this, first of all, you've got utility incentives for energy efficiency upgrades. And those are those are a wide range generally like for new construction. What you see is a lot of the utility programs are built either around some kind of a her score and or energy star.
00:38:26:18 - 00:38:51:08
Tom Hines: And so across the industry, the low end is probably about $200. The high end goes above $2,500. And that's probably for like an energy star to energy star plus kind of level of performance. But it's very significant. And that's just for the energy efficiency component. So then add on top of that that many utilities are now adding prescriptive incentives.
00:38:51:08 - 00:39:19:28
Tom Hines: By the way, most of the energy efficiency today, most are more like a performance based on sounds like I said, like you keep a certain her score or even a certain other energy model score. But then in addition, many utilities are now adding prescriptive incentives for those specific distributed energy resources that they really want to see installed, because that's going to enable a customer to take advantage of these kind of programs.
00:39:20:00 - 00:39:50:07
Tom Hines: Right. So the first, you know, sort of a barrier to participation for customer is having the device that allows them to participate. And so you see a very wide range here. And the reason is, is because there's a very wide range of of costs associated with Dars. You know, smart thermostat, probably the low end, as low as 50 bucks for the new Amazon smart thermostat where batteries are thousands, and I put $400 plus for batteries.
00:39:50:08 - 00:40:13:09
Tom Hines: You know, you could see up to $5,000 from utility. In some cases. These are added on top of your incentives. And so think about that in terms of what you're installing and what you may or may not be taking advantage of today. And find out what your what you may be missing out. Then that's on the builder side up front and then or a renovation side.
00:40:13:10 - 00:40:36:21
Tom Hines: Then think about from the standpoint of what your homeowner could potentially participated in the future. If they have these enabling technologies and have interest in helping to balance energy on the grid and getting paid for it, most thermostat programs are running it somewhere between 35 and $100 a year for customers. Customers can opt out of events if there ever uncomfortable.
00:40:36:21 - 00:41:04:12
Tom Hines: So literally, you don't ever have to be uncomfortable in one of these programs and you're going to get paid for batteries. Incentives are much richer, and generally the range is between about 500 and $1,500 a year. Those are going to be usually more events, but typically consumers don't even know when those events are happening, and the utilities will typically leave a certain amount of energy in the battery at all times for the consumer to use in case of an outage.
00:41:04:12 - 00:41:31:05
Tom Hines: So consumers still get to see their resiliency benefit from a battery. They get this additional benefit from the utility. And then EVs kind of in the range of 200 to $400 a year, again, for just agreeing to let the utility kind of delay when I might charge that battery of my EV till later in the evening and kind of optimize for low cost and carbon.
00:41:31:08 - 00:41:51:03
Tom Hines: And so those are ongoing yearly for the life of the home that the consumer can take advantage of. And when you start to add some of these things up, you can see that you can really you can save like 50% of your energy costs when you really add all of these things up or more as a consumer. We talked about time of use rates a little bit.
00:41:51:03 - 00:42:16:04
Tom Hines: And one of the things that I'm really working on is these same enabling technologies that enable demand response or dispatchable programs also help enable customers to make it easy to manage their energy use around retail on key grades. So just have your thermostat or your battery or your water heater adapt to that rate to say, I'm going to heat the water before that peak period.
00:42:16:04 - 00:42:38:04
Tom Hines: I'm going to cool or heat your home before that peak period, and then kind of try to coast as much as possible through the peak, or I'm going to, you know, dispatch my battery on peak to reduce my peak consumption. I see sometimes as much as 50% savings just from this alone, from customers, depending on the rate plan and the lifestyle you know, and how savvy a customer is about it.
00:42:38:04 - 00:43:03:06
Tom Hines: And so again, what I'm trying to kind of give you is this can be a very, very, very lucrative market when you start to pancake all of these different incentives. And then finally, there are significant dollars available through both tax credits and rebates in both the Investment Reduction Act and the bipartisan infrastructure law. So those are just icing on the cake of all the other things.
00:43:03:08 - 00:43:09:05
Tom Hines: Next slide.
00:43:09:07 - 00:43:27:18
Tom Hines: A little bit about how you can take advantage of these. First of all, like I said you need to do a little bit of your homework. I would make sure that you don't try to go after everything at once, but look at the things that most fit your business model and like, what are the utility programs and tax credit opportunities I want to focus on?
00:43:27:21 - 00:43:51:29
Tom Hines: And then what are the key technology parameters I have to think about? If I'm thinking about installing any of these things, right. Requirements and things, and that's really important to make sure that you're matching what's required in programs and and in the tax credits. Engage with your local utility or utilities for those who build across the country online, the utility program reps particularly like the home builder contact reps.
00:43:52:01 - 00:44:22:18
Tom Hines: Local raiders often have a lot of this kind of information and other like trade ally groups and programs. You know, it pays to kind of just start talking and figure out where those opportunities lie within each different utility because they're not all the same, unfortunately. And then I think one thing that gets overlooked is like, put an efficient process in place at your company to make sure that you understand how you're getting paid, how you're collecting what's required, and to just put that on autopilot.
00:44:22:18 - 00:44:42:03
Tom Hines: I often see that it's like pulling teeth sometimes to, you know, go back and forth on this stuff. The savvy contractors and builders put a process in place. They designate it and make sure that it happens. And then you should make sure you're marketing the value of all these programs to your customers. And all three of the potential value streams.
00:44:42:03 - 00:45:08:05
Tom Hines: One. Educate customers about the energy efficiency you've installed and what it enables for them. Inform them about utility time of use rates and ways they could slightly shift their energy and really lower their monthly costs. And then I really think there's a future where we work with home builders to actually help enroll customers with these enabling technologies directly into utility demand response programs and get them paid.
00:45:08:06 - 00:45:23:13
Tom Hines: And I think that'll be a really cool future where you're helping your customer access these programs and making it real for them, reducing their cost to homeownership from day one. Next slide.
00:45:23:15 - 00:45:48:06
Tom Hines: So for the next about 15 minutes or so, I'm going to cover what we're working on as a new project. That's a dough grant. That'll give you guys, I think, an idea of how one of the largest utilities in the world is thinking about this and, and putting together a program for, for a connected community's future. And then we'll turn it over for a question and answer.
00:45:48:09 - 00:46:12:15
Tom Hines: So about a year ago or a year and a half ago, we were one of the teams that applied for a D grant, Department of Energy grant, that there were ten teams selected. We were one of those ten teams, I think a total of about $70 million in funding. Our project is a $10 million project with about 6.7 million in funding from the Doe.
00:46:12:17 - 00:46:40:28
Tom Hines: It is called the Advanced Connected Communities Collaborative Project. Been talking, but it is are we call it AC three and it is in North Carolina. Our partnership. I'll give you all the different partners in this. But Duke Energy is one of the large partners in this project. We are helping them build flexible, particularly winter peak capacity, particularly as they provide more large scale solar generation in the summer.
00:46:40:29 - 00:47:06:17
Tom Hines: They're finding that they have more winter peak needs because there's less solar available on winter peak mornings. So we're trying to build that capacity through demand side, better integrate renewables, encourage adoption of distributed energy resources, and ultimately in service of Duke's 100% clean energy commitment by 2050. So we'll be connecting thousands of distributed energy resources. I'll go over those and talk about them.
00:47:06:19 - 00:47:41:26
Tom Hines: Total of about 3.6MW of flexible capacity just from this project. Lots of energy, annual energy savings as well. And it's really a project to demonstrate what could be done. We're using 500 new homes and 500 existing, both single family and some multifamily, mostly owner occupied on the owner occupied on the new homes, on the existing homes. We're actually looking at both owner occupied and a lot of rental properties, because we feel like that is one subsegment of the market that has been underserved.
00:47:41:26 - 00:48:06:19
Tom Hines: And so from an equity standpoint and a just size of that market, you think it's an important one to address $10 million total project budget. And we've got a project timeline through September 2026. So next slide, I'll dig in a little bit more to the project partners. And so I mentioned Duke Energy. And then we have a research team that consists of my company Tierra.
00:48:06:21 - 00:48:31:27
Tom Hines: Ithaca's who many of you are probably familiar with. Great building Science Company and National Renewable Energy Lab. And then the E3 Energy and Environmental economics will be helping us with valuation of distributed energy resources. We have two homebuilder partners, Mad at Me Homes and Meritage Homes, as well as another regional homebuilder that we haven't been able to lift yet.
00:48:32:00 - 00:48:56:03
Tom Hines: And then we have three partners in terms of recruitment and distributed energy resource management. And that shifted Energy elevation, home Energy Solutions and Energy hub. And I mentioned Energy Hub earlier. They do a lot of aggregation of thermostats. So they'll be our thermostat aggregator on this project. Next slide.
00:48:56:05 - 00:49:24:16
Tom Hines: So I'm not going to go over this in great detail because not surprisingly you'll notice these are the same distributed energy resources that we talked about in terms of what makes distributed energy resources work and what are the opportunities for builders. So you'll notice some our thermostats, certainly we're going to have those in all homes and they'll all be connected through Duke's current program, through this Durham platform with Energy Hub.
00:49:24:16 - 00:49:48:01
Tom Hines: So we'll be able to dispatch those thermostats. Water heating controls will actually be connected and managed through shifted energy, and those will be really primarily managed around time of use. Rates will give customers daily savings on their energy bills by just managing water heating to maximize the use of it off peak and minimize use of it on peak.
00:49:48:02 - 00:50:13:21
Tom Hines: And by doing that, we pretty much get most of the value out of that resource without running anybody out of hot water. And that's kind of the best case scenario. We've got whole home energy monitors that'll be supplied by curb as part of the Elevation Home Energy solution, and those will be given feedback to our homeowners about real time energy use information and proactive alerts about how they can even tweak some of their settings and operate more efficiently.
00:50:13:23 - 00:50:43:17
Tom Hines: We'll have batteries installed in some homes that will help reduce peak usage. These will just be in a subset of homes. All new homes will have high efficiency thermal envelopes, heat pump water heaters, high efficiency air source heat pumps, and advanced dump systems. So again, that whole thermal envelope we were talking about, and then we'll have community solar and storage in a one community that will have advanced inverters where we're able to attenuate that solar based on need.
00:50:43:19 - 00:50:58:07
Tom Hines: So these are all the things we talked about. They're all getting built into this connected Communities project, and we're going to use this as a real vehicle to talk about this with the industry for the next three years. Next slide.
00:50:58:10 - 00:51:23:28
Tom Hines: Four. Objectives. First of all, we mentioned how what are you and what are customers in need of improved reliability, increased affordability and getting to our clean energy goals. And so we want to make sure that we're thinking about those three things as our primary goals in this project. How can we flatten the load shape and reduce those peaks and those valleys in the system?
00:51:23:28 - 00:51:47:02
Tom Hines: So that's an easier load to serve. How do we help customers with affordability? By paying them to flex their energy and rewarding them by flexing their energy when they're on a time of use rate plan support. All of this is going to be done to increase the integration of renewable energy and match demand to when clean energy supplies are available, right?
00:51:47:03 - 00:52:14:19
Tom Hines: So that's how we're going to get to clean. And then finally, and most importantly, I think for you guys developing business models for new utility programs that engage with building owners, with renters, with builders, with contractors to make all of this happen. So that's really our goal. And that's why I'm excited to talk to you guys today. Next slide and we'll talk a little bit more about the project.
00:52:14:22 - 00:52:45:26
Tom Hines: We will be really thinking about all of the grid services. Remember I put that value backslide up. That value stack is essentially these different grid services. So what are the things that distributed energy resources. What are services it's providing back to the grid. It's providing capacity during times of like very high energy use. If I call on that battery or that thermostat to reduce that load, I'm seeing additional system capacity.
00:52:45:26 - 00:53:06:21
Tom Hines: It's just like adding a power plant. So that's that virtual power plant. Ramping rates are really important right now. As solar comes off the system, utilities have to bring other energy resources online. And a lot of times that has to happen quickly. These resources can be dispatched immediately. And so they give us that ability to ramp very quickly.
00:53:06:23 - 00:53:40:02
Tom Hines: A lot of power plants take hours to heat up before they can actually be efficient at providing energy. And so this helps us with those ramping rates, helps us with the, you know, capacity value across the whole transmission and distribution system, as we've talked about, we're going to use them in a way that helps support voltage and frequency during times when those are moving because of more or less solar on the system, and then in general, using it to align when energy is used with when we have renewables.
00:53:40:05 - 00:53:46:06
Tom Hines: So all the things we talked about, those are all part of this project.
00:53:46:08 - 00:53:49:18
Tom Hines: Next slide.
00:53:49:20 - 00:54:01:07
Tom Hines: All right. So that was a quick overview of what is a very large and complicated project. But I want to kind of get it in and make sure I had time for, you know, a good.
00:54:01:09 - 00:54:23:08
Tom Hines: Half hour or more of question and answer. In terms of our timeline project was awarded in 2021, originally end of 2021, it's almost a year to get all of the contracts executed with the ten teams, so we kind of kicked off the project at the end of October, started into kind of our project planning timeline, working with our partners.
00:54:23:08 - 00:54:55:04
Tom Hines: We are currently in customer recruitment and build out just really started into that and we fully journey mapped all the customer journey maps the tease and sees the customers would need to sign all of those pieces. How each builder will work with enrolling customers in the program, offering it up to them. It is optional participation, so we've worked through a lot of that between the utility and our builder partners, as well as our device partners, and what they need in terms of customer approvals to get a managed devices.
00:54:55:06 - 00:55:23:03
Tom Hines: We are hoping to start some events as early as this winter. Remember I told you this was really focused on meeting winter peak needs? We'll be using these resources throughout the year, but they're particularly valuable for Duke in the winter peak season. And so we'll start hopefully with some events this winter. But really, the timeline is set up to give us two full winter seasons once we're fully recruited by December of 24.
00:55:23:04 - 00:55:51:18
Tom Hines: And the idea is we'll have the winter season of 2425 and 2526, and then in January of 26 will kind of move towards analysis and reporting, and project timeline will finish somewhere in the fall of 26, maybe a little bit later than September. So that's what the timeline looks like. I would be interested in following along on the project with anyone who's interested with us.
00:55:51:18 - 00:56:13:15
Tom Hines: One of our goals for the project is make sure that folks in the built industry, you know, the built environment industry, understand what we're doing, what the opportunities are, what our findings are. We're going to be collecting a lot of data. We're also going to be serving customers and making sure that we fully understand sort of all angles of how this works and how customers value it.
00:56:13:15 - 00:56:40:28
Tom Hines: And we'll also be surveying all our participants in terms of what work for them, how we do a better job of, you know, making this a seamless customer experience throughout. So just really getting started with an extremely exciting project. I believe in my experience in 30 years that these will be some of the most efficient and grid connected and efficient buildings ever built in the United States.
00:56:41:01 - 00:57:08:23
Tom Hines: We're super excited about the project and again, wanted to share this with you, as well as the bigger picture of where the utility industry is heading. So with that, that's all the prepared content I had, but I'd love to continue the dialog for just as long as folks want to. And we'll go to the next slide. I've got my contact information on here, and feel free to reach out to me, and I'm here for you as far as answering any questions right now.
00:57:08:24 - 00:57:15:15
Tom Hines: So thanks again for everybody for your participation today. And I'll turn it back to Mike.
00:57:15:18 - 00:57:32:09
Mike Collignon: All right. Thank you sir. Appreciate it much. And yes, if people do have questions please send them in via the questions box. You know, I'm looking for some of those questions to come in. Tom. I do have a couple of my own.
00:57:32:11 - 00:58:04:09
Mike Collignon: We've seen a lot of heat, high temperatures in the southwest here. When they model TV production, what percent productivity is used? Because I can't I can't imagine all those panels are producing at 100% levels. And given the the heat domes that we've been seeing formulate over the past few years, I just wonder how is that being factored in, especially with the massive electrification movement?
00:58:04:11 - 00:58:31:01
Tom Hines: Yeah, I think that's a really interesting one for a lot of Ders, in particular in the southwest, because it's so extreme HVAC being a great example that we have to go way above and beyond, like what Seer level looks like in terms of what's real EHR efficiency at those extreme temperatures. And it falls quickly in some in some devices, you know, and similarly with, with solar production, we see that and we're getting off the curve on some of those as we get hotter.
00:58:31:01 - 00:59:00:05
Tom Hines: So definitely a concern. The other thing in terms of solar that's interesting is that when you think about, you continue to add the same resource to your resource mix. And so our peak for most utilities in the southwest, the peak actually keeps getting later in the day. And the reason is because solar's dropping off. And so eventually solar will have almost no peak capacity value, because your peak will become as soon as the sun goes down.
00:59:00:05 - 00:59:18:19
Tom Hines: That is when utilities will actually hit the net peak in the southwest very soon. We're at APS is typically looking at peaks. When I started APS 30 years ago is between 4 and 5 p.m. it's now between 6 and 7, moving to between 7 and 8. And so that's the that's the effect of all that rooftop solar out there.
00:59:18:19 - 00:59:45:24
Tom Hines: And the fact that what we talk about in terms of the grid peak is actually that load being supplied by everything else on the grid. And so new solar has only about single digit percent of what it says in capacity on its nameplate is actually the capacity a utility can use today. So that's how much of that resource we built is that incremental solar is great for energy, but has almost zero capacity value now.
00:59:45:24 - 00:59:56:09
Tom Hines: And that's why the need for new solar coupled with storage is essential. Otherwise, solar does not have much capacity value anymore.
00:59:56:12 - 01:00:13:23
Mike Collignon: Well, and that leads me to a question from Elizabeth, because you talked about that. We're producing more power at times than we can handle. So what is the latest that you're seeing or hearing on utility scale renewable storage?
01:00:13:25 - 01:00:23:05
Tom Hines: That there is an incredible amount of it planned under construction and delayed a lot of it because the chain issues.
01:00:23:05 - 01:00:24:20
Mike Collignon: Oh.
01:00:24:22 - 01:00:25:11
Tom Hines: Yeah.
01:00:25:13 - 01:00:27:21
Mike Collignon: It's being delayed because it's a chain. Okay.
01:00:27:23 - 01:00:42:14
Tom Hines: Yeah. Significant issues with supply chain. And so the first Ferc announced at the beginning before this summer that this next 2 or 3 years are going to be very difficult to manage peak on the grid throughout the US.
01:00:42:16 - 01:01:05:14
Mike Collignon: And who do you see as being some of the major players in that in that market as far as being able to supply? And I then there's the chain issues, but who's going to position themselves to really step in and be a leader in the storage capacity or storage sector? I should say at that capacity.
01:01:05:17 - 01:01:24:11
Tom Hines: No, that's a little bit outside of my area of expertise. I work more on the distributed side, so I work with all of the battery providers that provide or most of them that work with individual homeowners. But I don't work much with that utility scale stuff. That's a whole other set of folks.
01:01:24:14 - 01:01:46:26
Mike Collignon: Gotcha. That's fine. That's fine. You know, we had a question from Robert. He wanted to know for all those customers who have been recruited, what happens to them after the 2026 report, does the project continue for them or do all aspects advantages just end or get abandoned?
01:01:46:29 - 01:02:12:09
Tom Hines: I'm a big believer in not doing a one off project, so the idea is that we're integrating it into Duke's current distributed resource portfolio, and that we're hopeful we're trying it into Duke's programs so that we're hopeful that all those participants continue on beyond the project itself and our, you know, they all get to keep those distributed energy resources at no cost to them.
01:02:12:09 - 01:02:24:09
Tom Hines: And we would hope that they want to continue to get paid into the future. So hopefully they would, you know, just continue on, but be part of just Duke's regular programs at that point.
01:02:24:11 - 01:02:44:08
Mike Collignon: Gotcha. Question from David. Does anyone base energy efficiency programs off of home energy score? And the kind of his follow up question is why do they seem to favor Energy Star but not home energy score?
01:02:44:10 - 01:03:06:05
Tom Hines: Well, I think in new and at least in new homes, I know I've done, you know, a lot of work with Energy Star on new homes. And it became a very easy binary. You know, utilities are looking for something that has brand awareness for consumers and builders and everybody else. And that's kind of an easy, you know, is it efficient or not label.
01:03:06:06 - 01:03:36:01
Tom Hines: Right. So Energy Star has been extremely helpful in that market. What utilities have turned towards I think more increasingly is her scores in addition to just Energy Star. So not the home energy score but home energy ratings, you know through ResNet to say we'll give you additional rebates for some kind of a her scale score. So that's how I see most of the performance based programs work is kind of almost a prescriptive yes or no on Energy Star.
01:03:36:01 - 01:03:54:18
Tom Hines: And then additional rebates that are tied to hire her scores. So that's generally how they set up for. So there is a a performance basis. But it's being, you know modeled after and and run rate and other softwares that are that are producing our scores.
01:03:54:20 - 01:04:24:25
Mike Collignon: Gotcha. Okay. Final call for questions from our audience. I had one more time know there's some utilities out there who will remain nameless that seem to adopt more anti renewable policies. You know, just take away net metering or let's not encourage solar or we're going to reimburse it wholesale versus retail or whatever. How do you break through to a company like that.
01:04:24:28 - 01:04:45:16
Tom Hines: That's a great question Mike. I'm glad you asked that because what I found is that there are I haven't found utilities who have a bunch of anti environmentalist working for them who want to do the wrong thing. They all want to do the right thing, actually, and they've all made a commitment. The utility industry as a whole has largely made voluntary commitments around clean because they've heard from investors.
01:04:45:16 - 01:05:26:24
Tom Hines: They've heard from customers. That's what they want. What you feel you find, though, is that it's a very real issue that today folks who can afford to install solar are being subsidized by customers who can't afford to install solar. It's a it's just a fact that that's how it works. And so utilities are trying to balance between adding more solar to the system, but also understanding that they want to try to make sure that that customers who can least afford to subsidize that are the ones that are born with those costs.
01:05:26:28 - 01:05:55:28
Tom Hines: And what ends up happening is the less kilowatt hours that someone purchases from the utility, the more that the the. There are some cost to serve that aren't based on on variable volume of of utility of kilowatt hour sold. And so I need to now spread those same fixed cost over much smaller kilowatt hour sales. So people who don't have solar systems end up getting higher rates as a result.
01:05:55:28 - 01:06:29:22
Tom Hines: And so there's been a lot of discussion and debate, and there are no easy answers to that problem where like I, you know, I contract with a lot of these utilities who are very much aware of these issues, concerned about these issues, and are coming up with programs around leasing around, you know, the utility providing solar and actually leasing your roof space for it and giving you a bill reduction, community solar, all these ways that we can more equitably develop solar for all.
01:06:29:23 - 01:06:44:03
Tom Hines: So I think it's more about a who's paying for it and who's subsidizing it and who can afford to. Then it is about a positive or negative on solar energy. And I think that gets really misconstrued a lot.
01:06:44:05 - 01:07:03:06
Mike Collignon: Yeah. No, that's that's a that's a good walk through of that kind of perspective because I think that sometimes missing. So appreciate that. Well I don't see any other questions Tom. So I want to thank you for sharing your time and your insight with us today. And also thank you to our audience for attending and asking great questions.
01:07:03:07 - 01:07:23:25
Mike Collignon: And thank you to Powershift by the energy for their generous sponsorship. Now we're going to take a little break from our webinar series, but don't fret, we'll be back basically two months from today when Peter Pfeiffer will join us again at the housing 2.0 Thought Leader webinar. And it's going to take place on Wednesday, September 20th at our usual start time at 2 p.m. eastern.
01:07:23:26 - 01:07:30:28
Mike Collignon: I hope you'll come back on that. Until next time, have a great rest of your summer and relaxing Labor Day. Take care. Everyone still on?