Managing Market Uncertainty: Programs and Certifications

00:00:00:20 - 00:00:21:07
Mike Collignon: Hey, everyone. Welcome back to another housing 2.0 webinar. Now, before we get started, I wanted to remind you we are in the midst of National Tire Safety Week in case you're planning to hit the road around the 4th of July holiday. Make sure you check out those tires before you roll on down the highways and byways of America.

00:00:21:10 - 00:00:43:29
Mike Collignon: Today we're embarking. See what I did there on a new five part series that will look at housing uncertainties? Today's topic is managing high performance certification uncertainty, including Energy Star and its uncertain future. Now, who better to lead us through this topic? And Sam Raskin, who was considered the father of Energy Star in the Zero Energy Ready Home program.

00:00:44:01 - 00:01:08:29
Mike Collignon: Now, Sam is also the creator and teacher of the housing 2.0 countdown, which is based largely on Sam's latest book, housing 2.0 A Disruption Survival Guide. Before the program was established to help empower you, our building professionals, to design and construct higher performance, healthier, more sustainable homes at a fraction of the cost. So Sam is going to lead us through today's seminar, and he's also going to address your questions at the end.

00:01:09:01 - 00:01:30:22
Mike Collignon: Now, before we get started, we need to make sure to recognize that this webinar is sponsored by Panasonic. Panasonic Healthy Indoor Living Solutions. It's helping builders across the country differentiate themselves with powerful, clear compliance and cost effective indoor air quality solutions that provide a safer environment for home buyers. Now, like I said during the course of today's presentation, you can submit questions for Sam.

00:01:30:25 - 00:01:42:26
Mike Collignon: Simply use the Q&A function that's located in the menu bar near the bottom of the zoom window. I'm going to review those questions and posed those to Sam after his presentation. All right, Sam, are you ready to roll?

00:01:42:28 - 00:02:08:13
Sam Rashkin: Sure thing Mike. And thanks, everyone for showing up. Quick disclosure, today we're going to really look into big changes and announcement that happened to Energy Star and what it means to the entire, high performance hunk, stakeholder community. I want to warn you that before I begin, I'm giving you a perspective you're not going to hear anywhere else.

00:02:08:16 - 00:02:30:20
Sam Rashkin: I, I was in the trenches working in Energy Star. I have a certain view. I have to recommend it. Get lots of other opinions from people within the program, see what they think. But I tend to call it as I see it. And so I just let you know in advance. And I suspect that may provoke a lot of questions when we get to the end.

00:02:30:23 - 00:02:55:12
Sam Rashkin: So welcome to, our first of the Managing Uncertainty series, this time with high performance, certification likely changes and how to adapt. And of course, my, my biggest focus is Energy Star certified homes. So about the series managing uncertainty. This is the first one, but there's a whole set that we have scheduled for this year on August 21st.

00:02:55:12 - 00:03:21:09
Sam Rashkin: I'll look at the uncertainty with housing affordability. I want to really talk about six pillars for substantial cost savings with added value. It's, remarkable to me that as we are rapidly approaching a cliff here, where I feel the bottom can fall out of the housing industry, that we can't continue to ignore these six pillars. And so that's going to be a very important session on August 21st.

00:03:21:11 - 00:03:41:10
Sam Rashkin: On September 11th, I want to address the uncertainty with the shrinking workforce. We have to start future proofing our businesses, and we have to look at new options for how we build the labor. Workforce is not going situation situation's not going to get better. And we have to figure out what are the options with systems built homes.

00:03:41:12 - 00:04:06:25
Sam Rashkin: That's on September 11th. On October 2nd, we'll talk about the uncertainties with homeowners perceived value, particularly with high performance homes where the benefits are not visible. And we'll talk about six science based strategies for how do you translate hidden value and make sure that high performance art is fully recognized for all the benefits, benefits it brings to buyers?

00:04:06:27 - 00:04:33:21
Sam Rashkin: And then on November 13th, we'll talk about uncertainty with, meeting growing expectations for House designs and particularly how to integrate high performance homes with homes that live better. So that's going to be November 13th. And I want to also mention that, we're in, development of a series of in-person workshops for this year. We will bring to you the full housing 2.0 fundamentals.

00:04:33:24 - 00:04:56:10
Sam Rashkin: So what are we going to do today? I always start with a housing 2.0 background, just to give context for what I'm doing now where a lot of these view points are coming from, and then we'll jump into energy Star and how it got here really critical. This program is remarkable. And we really should understand the you know, the critical underpinnings that led to its success.

00:04:56:13 - 00:05:24:01
Sam Rashkin: Then I want to kind of dive into specifically Energy Star certified home. How did it, get on a path to market transformation? There were thing it was not an accident that it happened. I'd like to tell you that we knew what to do when we got there. I don't think I ever had bigger imposter syndrome than I accepted the position with EPA to lead the Energy Star certified home program, but we got on a path and we learned a lot.

00:05:24:03 - 00:05:45:12
Sam Rashkin: And I want to share with what I with you what I think we learned. And then some observations about the program today likely changes, I think, that are happening with the new, announcement, to shut down the program. And then how do you adapt with what are the likely changes? So that's all in an hour or so, I move a little quickly.

00:05:45:14 - 00:06:12:27
Sam Rashkin: Forgive me. I want to leave a lot of time for discussion at the end. So quickly. Housing 2.0 background 2.0 background. Many of you may be familiar, some not. So just a quick introduction. What I believe is we have to recognize that housing is the ultimate consumer product. And when nothing comes close, nothing comes close in terms of emotion, cost, complexity, impact on our lives.

00:06:13:00 - 00:06:39:03
Sam Rashkin: It is nothing is close. And if you look at where people spend time every day at home, at work, dining, outdoors, vehicles, they spend 69% of their time in their homes based on research from a laboratory studies, National laboratory studies. That means virtually we are in our homes almost 70% of every day. So what I like to say is home is where life happens.

00:06:39:08 - 00:07:10:14
Sam Rashkin: That's such an important perspective. And if we look post-Covid, how many more people have started working, at home? And, maybe that percentage even gets up to 75%. So why housing 2.0 is really, kind of brought to you as a critical program. The reason we exist is we're about homes for life happens better. And it's great if homes are high performance, but there's so much more that we have to integrate with the performance.

00:07:10:16 - 00:07:44:03
Sam Rashkin: And what we do is we recognize performance is a must have user experience. But it's one hold up the store. In fact, it's a five legged stool. There are five critical experiences. There's, community design, performance quality and sales, particularly sales service. And together there's about 160 best practices we address that create these fundamentals for housing 2.0 or framework for consistently providing homes that live better for lower cost.

00:07:44:06 - 00:08:11:01
Sam Rashkin: Now, how we do that is kind of, a switch, a pivot from the first cost business model. It's so common with builders to minimize all their costs, including, cost devoted to user experience experts and special features, and kind of recommend highly that they make critical investments on. Sure thing user experiences that are almost transformational. Make the extra investment there.

00:08:11:08 - 00:08:53:14
Sam Rashkin: So invest in user experience. But number two is critical optimize cost and user experience with a whole array of cost optimization pillars that, again, are the subject of another seminar. And the six pillars that I will address, I will lean, to minimize waste. Simple to minimize complexity systems integration. Instead of having a lot of these systems as afterthought quality, instead of high quality assurance expenses because we lack it, over customization, go into a really optimized choice and advanced, productivity, to minimize cycle, minimize cycle time and process.

00:08:53:16 - 00:09:17:26
Sam Rashkin: So when you go from all these excessive costs to these optimize cost, and you wind up with these net savings and all this added value because of a better user experience and lower ownership cost. Now, what else suggest to you is I used to make a rough estimate that it was about a 30 to 50% cost advantage. But, you know, over time, those estimates have been coming to bear.

00:09:17:26 - 00:09:48:17
Sam Rashkin: And, I'll give you one example. We've applied housing 2.0 with a great builder, working with the program, Tim O'Brien homes on the left, you see the original first floor plan. On the right, we see the optimize first floor plan, about 30 different, optimization improvements were made to the original plan. I'm not going to walk you through all those, but what I will tell you is that one of the things we do with the builders is we tell them we can't manage, we don't measure.

00:09:48:17 - 00:10:15:18
Sam Rashkin: So go back to the office and run some spreadsheets. We give them tools to do that. And this is a spreadsheet and all the cost calculations and all the calculations for added value and net $118,000 cost advantage, just optimizing one element of housing, 2.0 optimized design. And it led to 46,000 in cost savings and 72,000 and added value that come up to this one 18,000 number.

00:10:15:18 - 00:10:37:00
Sam Rashkin: So these are real know now more and more as we work with builders we will be validating these estimates are really, bankable for many builders. So they're nothing but housing 2.0. If you're interested. This is the key resource to book. It's been vetted for years and years with hundreds and hundreds of housing executives, a tremendous amount of contact.

00:10:37:00 - 00:11:10:20
Sam Rashkin: It's helpful. And the goal is just to make sure the high performance housing professionals have the best position to be industry leaders. So enough about housing 2.0. Let's move into today's topic, Energy Star. And first, how it got here. So what's really important to recognize and why I'm doing this webinar is energy starts really important. And I hope everyone really understands just how profoundly impactful this program is.

00:11:10:20 - 00:11:32:17
Sam Rashkin: It is one of the most outstanding examples of really, really great government. That's why we're here. We really need to understand this program and as you learn from me, also understand what could be continuously improved. Okay. I think there are a lot of ways to take Energy Star and enhance work from where it is today to where it can go.

00:11:32:20 - 00:11:56:16
Sam Rashkin: Now, let's, start with first, how did it get here and look at, four compelling aspects. I think, that create the, success that this program has had. One is the leadership. One is a compelling why, one is a compelling what an a compelling how. And so we'll cover each of those before we get into specifically Energy Star certified home.

00:11:56:19 - 00:12:27:23
Sam Rashkin: So I want to start with the leadership. I am really frustrated that when I go and I search on John Hoffman, there's one grainy pictures. The only picture I can find of John Hoffman. It's just stunning to me that this amazing leader has hardly any presence left on the web. This is the equivalent of Steve Jobs to Apple, but John Hoffman did, leading the Energy Star program.

00:12:27:26 - 00:12:54:26
Sam Rashkin: He ensured the right destination in terms of what we could really achieve and inspire us to just what was possible with really good government programs. And he brought an incredible array people into this program and went all across the country and with amazing sense of very specifically what skills he wanted in this program. He got them in incredible recruitment effort.

00:12:54:28 - 00:13:25:02
Sam Rashkin: He developed amazing messaging. His speaking and his enthusiasm were inspirational, and he scared the heebie jeebies out of all of us. I mean, you knew you'd be fired if you didn't meet these insanely aggressive, thresholds for performance that were set out for all of us coming into this program. This was like joining a startup company. But the the incredible experience for all of us to work with this man was stunning.

00:13:25:04 - 00:13:58:17
Sam Rashkin: And when he left, very shortly after I got there within a year and a half, that was a huge loss. The program never I think are of, I think the insane innovation ability to pivot to do and take risks and do things that kind of drop tremendous like leadership is everything in an organization. Now that the groups that have come in have done a great job managing the program and his vision, but the kind of continuous innovation that I think John would have brought probably never happened.

00:13:58:19 - 00:14:22:28
Sam Rashkin: This this man was amazing. Everyone should know him. There's been some good write ups about him in some books, but I want to make sure first. Everyone knows this is where I think I learned the most. In my entire experience as a working professional. Was working for John Hoffman. Okay, now, the compelling why? And it was so clear what this program was set out to do.

00:14:23:00 - 00:14:53:23
Sam Rashkin: It was voluntary, first and foremost, climate protection. And I think climate protection was the name of the division, the, climate Protection Division, I think purposely because, climate change, even then, there's always some, debate and, polarization around climate change, but we can all rally around. We should protect the, you know, the ecosystem we live in and we shouldn't be regulated was a big aspect to this program.

00:14:53:23 - 00:15:15:29
Sam Rashkin: We could do it voluntarily. We don't have to mandate a worldview and tell you what to do. This was so compelling to me. Three words. You know, if you ever change my training, I teach. You know, you have to lead to lead with the why. Simon Sinek, great concept. And I attached seven words as kind of the threshold that you should use for any compelling lie.

00:15:16:05 - 00:15:45:02
Sam Rashkin: So this is what it is. It's not what's in the program literature. You won't find it. But this is what I believe voluntary climate protection and it just amazing what program get. What did it do okay. So why did it was voluntary protection. What it did was it provided a simple choice for products credibly certified energy efficient, and an absolute critical part without compromise.

00:15:45:04 - 00:16:11:11
Sam Rashkin: If you saw an energy store product, you knew that not only not only was efficient, but performed as good or better than standard products, and it was certified okay. There's so much, literature about the value of the concept of being certified, and I just won't go into all that. But this was such a compelling product, product to bring to the market from government and again, really great, good government.

00:16:11:11 - 00:16:30:04
Sam Rashkin: So this is the logo. This is what we did. Now how did we do it? I spent a little more time on the how because here's where I fear a lot of lessons could be lost. As so many of us the talent across this program. I was so intimidated almost the first 4 or 5 years that I belong there, and a lot of us.

00:16:30:04 - 00:16:56:26
Sam Rashkin: So, kind of all in different directions now. And there's so much history and and wisdom and knowledge and lessons learned, but I hate to think might be lost. And I'll share with you where I think mine are. And it has to do with how we were successful. It was the right people, the right discipline, the right business model, the right strategy change strategy, and the right collaboration.

00:16:56:29 - 00:17:29:00
Sam Rashkin: So let's go into the right people. I mentioned earlier, the John Hoffman was amazing. He had a vision and he knew it needed an army of incredibly skilled professionals came in and people didn't. Having skills was not enough. He also recruited this amazing passion for having huge impact, making our world better. And he brought in MBAs and engineers and industry professionals and sales professionals and communications professional and one architect.

00:17:29:03 - 00:17:54:11
Sam Rashkin: And I know that because I was the architect in the program. But this just the atmosphere working there just was energized like nothing I'd ever felt before in my life. Because these people were so inspiring to each other. So that was the first thing he did. That was he got the right people on the bus to use James Collins, words from good to great, but that was so powerful.

00:17:54:11 - 00:18:20:11
Sam Rashkin: You don't have a program without having the right people on the bus. And then the discipline to understand what we did, what was our lane and stay in that lane and what our lane was, was we by products that were generally in the top 25%, most efficient within a specific product type we provide. We made sure they provided, again, the same or better performance of standard models.

00:18:20:14 - 00:18:47:12
Sam Rashkin: Remember the early compact fluorescent light bulbs. They flicker, they hum. They were noisy. They failed prematurely. There was so much disappointment. People dropped them so quickly when they were first introduced because they didn't meet the performance of the incandescent light bulb. But we all you, John, understood you had a warranty back up, that the performance was as good as better or better, as well as be more efficient.

00:18:47:15 - 00:19:10:13
Sam Rashkin: Third, to achieve that, all the products were independently tested and verified, compliant with the threshold set by the program, or if you would only certify products if they were readily available and not limited to 1 or 2 niche manufacturers. So there are some products that never got labeled that asked to be labeled because there was only one provider.

00:19:10:16 - 00:19:32:19
Sam Rashkin: And the last thing here was, was that, the products had to have clear and accurate energy savings and benefits labels that, were attached to them just to make sure that we translated the value at the point of sale. Now, one note is that, of course, the specifications were reviewed and updated on a regular basis to encourage ongoing improvement.

00:19:32:21 - 00:20:03:23
Sam Rashkin: So we were so disciplined. And what happened is eventually I think some of the discipline there, gets lost. And I'll speak a little bit about that later on. And then we had the right business model. And so all about being in partnership with industry, moving to leverage mutual benefits, you get something powerful. We get something powerful. So in the case the partner, they would make changes that enhance their business interests and not in terms that were foreign to them.

00:20:03:25 - 00:20:35:15
Sam Rashkin: We learned the business metrics. I use, the, the business, challenges and problems that they had to solve. We came to them with solutions and EPA enhanced climate protection. That's what made us feel great. You know, we were we were tabulating the way McDonald's counts a number. Hamburgers sold. We were always at a counter going on how much carbon we kept out of the atmosphere, but we were just enhancing the climate.

00:20:35:18 - 00:21:04:03
Sam Rashkin: So those are our mutual benefits. Then what was really powerful was then what do you do to actually execute change? Do you have the right strategy to make change happen? And the Energy Start program did something that I, later would come on to learn more. What was really going on that I understood intuitively, more consciously when I read switch by, Chip and Dan Heath.

00:21:04:05 - 00:21:25:09
Sam Rashkin: What we did that was so powerful was build on what's working. Okay. I think they call those bright spots. And so within our program, we had set up a bright spot, if you will, and before energy start had any mass effort, you know, it was just in the background. I had come out in 92 to label computers that went to sleep.

00:21:25:09 - 00:21:50:09
Sam Rashkin: And then, you know, a lot of us got there in 94, 95 and. Yeah, and the idea was energy start needed to be expanded. It was, you know, like I said in the background, most of the effort that John was focused on was a program called Green Lights. And what was so incredible about having green lights was we all got there right surrounding us.

00:21:50:09 - 00:22:21:02
Sam Rashkin: And just a just, just the energy from that program, you could almost touch because it was creating change. So fast with so much energy, so much, growth in real time. And what they were doing was so powerful, yet so simple. They went to their voluntary partners and they asked, this is the proposition. I said, all we want you to do is get, lighting expert to inventory your building and your lighting systems.

00:22:21:04 - 00:22:48:01
Sam Rashkin: And then when they do that kind of audit risk assessment to calculate the cost to make changes and the savings with efficient fixtures and controls. And then all we want you to do is if your own expert and their assessment reveal that by changing your fixtures and controls, you can make a 20% or greater after tax internal rate of return.

00:22:48:03 - 00:23:11:26
Sam Rashkin: You do that and what business would turn down it after tax? 20% internal rate of return. So it was it was just we spoke their language. We asked them. We knew that lighting was just crazy, cost effective. So let's just get people to do the obvious that they weren't saying because it was prior to that not being conveyed in a language they understood.

00:23:11:28 - 00:23:37:16
Sam Rashkin: And the partner benefits were this compelling return on investment, for their companies by making these upgrades and all this recognition for doing amazing things and excellence from the trusted US Environmental Protection Agency, and we were so envious that the 100 of us or so that got there, this program was running full tilt rate. Mario Vargas, a good friend, was leading the program.

00:23:37:19 - 00:24:05:16
Sam Rashkin: I was so envious of her running a mature program that was just crushing it. Amazing results. I got. When will we ever see this kind of success? But we had that example right in front of us. We can see that we could take what was working at a level like you've never seen in federal government, in a voluntary program, and we can maybe figure out how to apply it to our products that we were assigned to.

00:24:05:19 - 00:24:27:05
Sam Rashkin: And green lights eventually, of course, became Energy Star Buildings, which to me is probably from my, from my view, the most successful Energy Star program. But this was the this was this was the precedence that was there for us to build upon a template, if you will. So Energy Star just applied what's working. It was a right implementation.

00:24:27:05 - 00:24:51:05
Sam Rashkin: We built on what's working and we developed a very effective, way of figuring out how to go to partners. Say, look, all we want you to do is take your products and verify they are efficient and performance to the threshold. Just take all your products and figure out which ones meet this energy efficient, profit and performance threshold.

00:24:51:08 - 00:25:12:20
Sam Rashkin: Then label those products energy Star at no cost. Use this label and promote Energy Star Power through the logo. Use guidelines that were developed so you had really good control. The partners were abusing the label and we could manage the use of the label. So that's that was the deal. And the partner got this significant differentiation for products.

00:25:12:20 - 00:25:43:26
Sam Rashkin: So we're probably the highest profit margin products. So sold the more efficient our quality products and they sold more products that created higher customer satisfaction. And they increased sales by earning trust that they had a certification to the label products. All this recognition and many, many of them over time won awards that help create even more trust. So this is just a very powerful program construct of how we applied a lot of the concepts that we're working with.

00:25:43:26 - 00:26:20:14
Sam Rashkin: The green lights program, and then we have the right collaboration. Now, John was just a militant about engaging industry, and you only you had to be an active listener, just constantly going to potential partners and learning their business. So we did amazing amount of customer discovery. We engage them, with a tremendous amount of, effort to be involved in setting their national program requirements and always understanding their constraints and the opportunities and knowing their business so well that we would avoid poison pills.

00:26:20:21 - 00:26:41:02
Sam Rashkin: We were we can figure out how to stage requirements over time. We went to the industry events. We showed up. You know, Woody Allen said 80% of success is showing up. We always showed up. All of us. A lot of us. But most of us had these incredible travel schedules that, you know, John knew to add to the budget money for travel.

00:26:41:05 - 00:27:04:00
Sam Rashkin: And then we also along the way, really worked hard to develop personal relationships of the kind that you need to truly get inside him to stay in the industry. So that was critical to making it happen. So those are some of the key underpinnings. Again, there's so many amazing people in this program. You'll get other perspectives from them, but those are some top of mind ones I want to share.

00:27:04:07 - 00:27:31:24
Sam Rashkin: There was so much the leadership created such a foundation for this program to be successful. So what path to market transformation? The Energy Star certified home check? No, this is what I know more detail because I led this program up until I left to work at Dewey in 2011. So. I mentioned to you I had incredible imposter syndrome.

00:27:31:26 - 00:27:54:02
Sam Rashkin: Like, at a level like, I. I can't tell you. I did not believe I belonged in this organization. These people intimidated me. I had expectations like I've never had bestowed on me in any job before. I was freaking out. And so I want you every resource I could and read tons of book about just how do markets work and how do you get innovations to market.

00:27:54:02 - 00:28:25:08
Sam Rashkin: And probably one of the best that clarified for me, and not until several years after I was frustrated trying to figure things out. A book by Jeffrey Moore called Inside the Tornado. You know, it's one. Crossing the chasm was his first book, but, but this book was like going to a half. It was a complete a ha moment for me, because it finally help clarify that the classic market diffusion curve you've seen thousands of times.

00:28:25:10 - 00:28:48:18
Sam Rashkin: If you're like me, going and reading literature and going to presentations where you see basically very, very slow growth as you get only early adopters on board and you figure out how to get to the mainstream users, and then you slow down because you've got most of the users, users and the laggards finally come on board. So this is a this is a standard market diffusion curve.

00:28:48:21 - 00:29:25:11
Sam Rashkin: And vertical axis shows how much penetration in the market you get. So the key thing that is great in the book is it explains that the behavioral profiles of the early adopter and the mainstream user, couldn't be more diametrically different. The early adopter is unique. They accept cost and value, propositions that are where they have to gamble on the future rewards and but they, they understand the value proposition and accept it and they'll take the gamble.

00:29:25:14 - 00:29:56:15
Sam Rashkin: They accept high friction, you know, form clicks if they need to, to figure things out. They don't deal with complicated transactions and they accept uncertainty. They're adventuresome, cope with things that they don't aren't clear when they're using the product. And they take the don't worry about setbacks. And this is me curating inside the tornado into these three buckets of critical scaling factors to get anything to market cost, value, friction and and uncertainty.

00:29:56:17 - 00:30:18:24
Sam Rashkin: And when you look at the behavior profile of a mainstream user, it's the complete opposite. They reject any cost value proposition that is not intuitive to them or they they're not going to make the effort to figure it out. They're very discreet about new ideas. They reject high friction. They want whole product solutions, simple transactions, and they don't want any uncertainty.

00:30:18:27 - 00:30:38:16
Sam Rashkin: They know a certain way and that's the way they like to go. So they don't deliberate forever. If it's new, they'll resist anything that's not clear. They want proven solutions, couldn't be more different. And because of that, this is a myth that you smoothly transition to these users. And what you're offering more points out is there's a chasm.

00:30:38:18 - 00:31:02:18
Sam Rashkin: The reality is no smooth curve, and you've got to cross that chasm between early adopter, mainstream user, and if you don't, you flatline. You never penetrate the market at at a meaningful level and you don't scale. So this is what we focus on in the program. I realized later once I read this book, but we were intuitively doing a lot of things right.

00:31:02:20 - 00:31:27:23
Sam Rashkin: But by then having this clarity, when I went to Zero Energy really home, it was a completely different, confidence level I had leading that program. So this is critical. And so here's what we did across the chasm. Free energy star certified home. On cost value. The most significant thing. We shrunk, the change. We shrink. We knew we had to.

00:31:27:26 - 00:31:47:20
Sam Rashkin: We had to do that. Or at least I did, because when I got there, I'll show you what I had a struggle with. Less than efficient, but really important for dealing with costs. We developed a sampling protocol once, and I'm going to focus more on, on friction. We they've just five of us or six of us working on the program.

00:31:47:20 - 00:32:11:06
Sam Rashkin: Washington cannot run on a national supply chain for the program. So we needed a supply chain, and we also need easy partnership and easy access to resources. And, we developed a one stop shop for, verification with the Herr's radar and maybe the samples we could on uncertainty. We really got good at translating the value better and better over time.

00:32:11:06 - 00:32:38:21
Sam Rashkin: Maybe not so good in the beginning. And, we use a draft framework concept called a bowling alley to do the proof of concept. I'll explain that more. And then we had the Building America program, which I'll also speak to in a moment, and then also to remove uncertainty. We really, got prescriptive packages. So you as a builder, you know, the worst case, what you had to do and absence of the Herr's rating during your consideration to join or not join the program.

00:32:38:23 - 00:32:59:18
Sam Rashkin: Now, the rating industry for us like insanely rigorously to not do sampling and not do the prescriptive packages. But they were nation. They were trying to grow. They were fearful of anything that would, reduce the business opportunity for them. And so this was just, a lot of conflict we had with that industry, with the Hershey industry that we had to get past.

00:32:59:21 - 00:33:21:28
Sam Rashkin: But what we knew, you know, I spent 3 or 4 months when I got there just traveling the country talking to builders, because I had no clue what was their primary problem they had to solve. And what I learned about builders, because I really didn't have as much as I hope to have coming into this job. But one is the top priority is land acquisition.

00:33:21:28 - 00:33:43:22
Sam Rashkin: I mean, it is so far above anything else that they care about, and so anything else is such a small priority to them relative to getting the land. If they don't have the land, they don't have a product to sell. And they have a very, low risk, variable cost business model. They don't own anything in construction. They have an office and they develop the concepts for the designs.

00:33:43:28 - 00:34:13:13
Sam Rashkin: But everything's outsourced and construction. All the aspects of construction go to subcontractors. Incredibly fragmented, very tens of thousands of builders across the country. And they're we all know that. They're like the inertia in that industry. They risk and friction tolerances ultra, ultra low. So this is what now we'll sober and go around traveling the country and then trying to figure out, okay, where what can we do to solve problems these guys really have.

00:34:13:16 - 00:34:40:05
Sam Rashkin: So I mentioned here to cover some of these things in detail, some of these elements. And the first one to talk about shrinking the change. When I got to EPA, there's a team of great group of experts that work in the back room cobbling together a potential, performance threshold for the Energy Star certified home. And they gave me this when I got their first day to lead the national program.

00:34:40:08 - 00:35:04:13
Sam Rashkin: And I kind of flipped out because even before I did my three months of travel, I said, I can't. So this is great. It was basically the IBA guidelines. Around 93 and 94 kind of converted into a program specification, but it was the her 6575 equivalent would be about, you know, ICC 2009 home, an enclosure.

00:35:04:18 - 00:35:30:26
Sam Rashkin: They third party verification made sense, but with who we did had 5 or 6 people. We were gonna go certified thousands of homes type docs in your ceiling, comprehensive air barriers, efficient components, bulk moisture management, quality installation, Hvac. Those are all great. I couldn't disagree with what they gave me. What I couldn't figure out is how we can get it to market 100%.

00:35:30:26 - 00:35:56:03
Sam Rashkin: And nothing. It's done. Nothing. So we shrunk the change. What we did was eventually and this a lot of this was again, John Hoffman just providing amazing, leadership and helping us figure out a level. You know, we talked about all these issues. I mean, he just is so quick to come up with solutions and really help. But what we did, basically we were 30% greater than the code at the time, which was woefully inefficient.

00:35:56:06 - 00:36:27:12
Sam Rashkin: Mac 93 code compared to the latest I see ICC codes about 70% less efficient, so we're 30% more efficient than that. But that's today a pretty low bar. We we emphasize tight docs and your ceiling and, Hertz verification was the big one. We couldn't do verification. And the only thing out there was this Mason Herz rating, like, call it an industry, but it was a guy in, in Indianapolis.

00:36:27:14 - 00:36:49:23
Sam Rashkin: There was a woman in Mississippi, and there was a guy in Salt Lake City. And you were done, you know, Steve, Baden was up in Alaska with a program, but we weren't working in Alaska, and so there was no hers industry. And we hitched our wagon to it because we know we needed verification and know my, you know, Dave Lee was mentioned Canada residential branch.

00:36:49:23 - 00:37:18:00
Sam Rashkin: She was so effective at managing and leading what I believe was the development of an industry that would not have happened. But for him. But Dave Lee was there and he he, he he was the major reason the hers verification infrastructure developed my mind. But that's what we were. And that was even this, this change that was shrunk to.

00:37:18:00 - 00:37:42:15
Sam Rashkin: So such a small level. It took us ten years before we can go to the next step to get that fully established. In 2006, we introduced Energy Star certified home version two. And what you see is, where I have a darker shade of, a brown, it means that was, increase in rigor or in some cases, the additional boxes.

00:37:42:15 - 00:38:12:13
Sam Rashkin: It was new requirements. So we made the energy hers. Threshold about 85 instead of 100. We, went to the 2006, esque baseline for the enclosure. We had more rigor on the docs and your silly requirements, but the big, big prize in this second version was thermal bypass checklist. Because without the air barriers, the insulation, can work, barely effectively.

00:38:12:13 - 00:38:38:25
Sam Rashkin: And so we made sure finally we had a complete thermal bypass checklist and more efficient energy star components. And then came version three, and we finally got to the full package. And even better. So we have now a her 6575 baseline to 2009 closure. We also had even tighter docs and air sealing. And we had we added bulk moisture management.

00:38:38:25 - 00:39:07:10
Sam Rashkin: Knowing how much more risky assemblies get when they get more airtight and more insulated. And we added quality insulation of Hvac with whole house ventilation. And then I jumped already home and we went even more. We were able to go to hers 48 to 55. We baseline to 2015 now 2021, we made even tighter and tighter sealing requirements, more energy star components and energy store.

00:39:07:12 - 00:39:40:13
Sam Rashkin: And we added optimized duck ducts location inside the condition space. Predominantly we added indoor Air Plus. So bonus list. Requirement. Knowing that these homes were tighter and needed a comprehensive indoor air quality package, and we added solar ready sing ahead that solar costs were coming down. That for a minor additional little set of details, you could make the house able to be have solar installed with minimum disruption or cost penalty to the owner.

00:39:40:15 - 00:40:04:25
Sam Rashkin: So that that was how we took a path to this goal based on market readiness, constant customer discovery, talking to builders, understanding where we could, when and how we could push the program requirements and where we had tolerance for the change. So that's how we basically moved it forward. And then the supply chain was critical. Having a really clear rules for everything to be done.

00:40:04:28 - 00:40:27:24
Sam Rashkin: So we provided the product, which was basically just a we set the bar. Here's how high you got to jump. And then you get a label. So our product was the Energy Star label tied to a threshold. And then we need distribution, which is predominantly the service providers. But in number cases utilities were helpful or institutional programs on sales force and verification completely rely on hers.

00:40:27:25 - 00:40:55:26
Sam Rashkin: Raiders which was a big gamble. And it came. Yeah. Okay. Appreciate more of the amazing work that Dave Lee did. They really did make sure that happened because I was flubbing lots of issues with the Hers Raiders. And then we had core customer we knew was our builders. We would be the big. That's how we operated. We always we we had to get the builders to use a label or there was no home with our label to purchase.

00:40:55:28 - 00:41:22:12
Sam Rashkin: They were the ones we had to sell. And then they sold to the end customer to home buyers. So this was the clear roles were understood. This is where we spent our time, was to build the supply chain and translating value. We knew each of those key parts of the supply chain required different messaging providers. We're giving them an opportunity to create a viable business and to grow a national market.

00:41:22:15 - 00:41:45:08
Sam Rashkin: Utilities. We were there to help you reduce peak demand instead of having to come up with your own program. Here's a turnkey program, and if you want an exit strategy, we were there for persistence. The energy star wasn't going to go away. If your whatever support you provided left, everyone could keep going and be persistent because the national program was there for the builders you brought into the program.

00:41:45:11 - 00:42:08:23
Sam Rashkin: Then the builders were the big message was going to earn trust with your customers because you're a certified home. Big deal. You're going to differentiate when the top 10% of the homes in the country able to meet this very high threshold of efficiency and performance set by the US EPA and going to have much higher customer satisfaction, and it was became a core message.

00:42:08:26 - 00:42:34:02
Sam Rashkin: No, we weren't showing energy efficiency. And, I'm being endless debates with even my internal colleagues about that energy efficiency and nothing to do with the sale for us and for me personally and for home buyers. Basically, look for the oil. You have to look for the label. You know, it's certified efficient. Plus, plus it meets or exceeds what other homes are doing and it's lower ownership cost.

00:42:34:02 - 00:43:02:09
Sam Rashkin: That's all we basically message. So really focus on this value. And then we had across the chasm and I mention is going to talk about the bowling alley strategy from to offering more. And essentially what you explain is there's usually an 800 pound gorilla. It dominates the market. And you're coming with a new innovation. You have to figure out how do you get and be competitive and create, and create transformation.

00:43:02:11 - 00:43:22:13
Sam Rashkin: And so a good example might be, you know, Oracle dominates databases and you have a new database. You can't just throw out another database and expect people to you just to go to the new one. It is too much already built in preference and use of let's say Oracle. So what you do is you go up, you know, it's like a bowling alley.

00:43:22:13 - 00:43:42:20
Sam Rashkin: You go to the first pin, the first application, the first segment in that application, let's say, medical industry, health industry. And for small doctor's offices, you have your you already pre develop a database that knows how to do billing or to keep records. You want to do notifications and so forth. And then you go for larger offices.

00:43:42:20 - 00:44:04:06
Sam Rashkin: And then hospitals are segment two and segment three. And then if you have success there and people know your database, you go to app two, which might be let's say education, sector. And you come up with segment one for small schools, you come up with ways of doing attendance and records and keeping notices and curriculum.

00:44:04:06 - 00:44:35:03
Sam Rashkin: And then for segment two might be universities and and you say you keep knocking pins over from a single beachhead and you accelerate adoption a foothold and you keep switching strategies once you're in the tornado to keep gaining market share. So that's what we did with Energy Star certified. I spent I'd say the first 4 or 5 months I was visiting Gainesville, California and Florida, like, I think 3 or 4 times, maybe more.

00:44:35:03 - 00:44:59:23
Sam Rashkin: I lost track. Here is a small city of 30,000 homes. We were trying to start a national program of 30,000 people. We're trying to start a national program. I'm going back and forth and back and forth to Gainesville, Florida. Why? Because they had all the elements of what was critical to success for energy starts at home, and we needed a proof of concept of what we were doing didn't work there.

00:44:59:23 - 00:45:26:10
Sam Rashkin: The messaging, the the children, the math, the messaging, the, how we provided low friction, how we get rid of uncertainty. All the solutions we had for those things didn't work there. We knew we had a problem. So we had Ken Fonarow with, Florida Hero. Probably. We owe so much to Ken. I don't know where he is today, but Ken was passionate.

00:45:26:11 - 00:45:53:01
Sam Rashkin: He was incredible. He was engaged with the builders in the market. We had a very good quality builder base there because a university town, and they tended to sell to the more educated demographic. They had a good utility. They didn't want to offer incentives, which I didn't want anyway, but they were really, really helpful, engaging the industry and hosting training and doing lots of things that I really wanted.

00:45:53:04 - 00:46:16:07
Sam Rashkin: And we grew market share in about 30% of the market in that one small market, just because we had all the pieces we needed. So then we met, there was Czech and Phoenix, and we grew Phoenix, and we met another raider in Las Vegas who was amazingly good to Las Vegas. And so those are the regional builders. And we that was our first, segment we were going after.

00:46:16:07 - 00:46:38:03
Sam Rashkin: Then we'd go after the national boards and we made inroads with Pulte and then by 2006, I think we got KB home going 100%. And then you work with the Systems Building Research Alliance, and my good buddy Manuel Levy, and we figured out HUD code. We had Palm Harbor go 100% Energy Star. We were just knocking the pins down.

00:46:38:06 - 00:47:02:15
Sam Rashkin: But I would be remiss if I didn't say we were incredibly lucky. The Building America program came along, new homes was hired. There are a lot of the industry. The hers industry was really hard to build, a solid infrastructure, and so Building America came along in the first few years of the program and they said, let's set up these three amazing teams.

00:47:02:15 - 00:47:23:16
Sam Rashkin: No, Steve Brooke and and winners and Ebix and, I think there was one other, but they they all were. Announcer. Working with big builders, showing them how to do Energy Star for very little cost. And they did hundreds and hundreds of homes. We exempted them from the rating process so they could do a lot of homes very quickly.

00:47:23:18 - 00:47:49:06
Sam Rashkin: And then all of a sudden we created through that a lot of interest in the program. So building America was like huge in terms of the success of the program. And last time we're talking about here are lessons learned is collective impact. You. This is a great study from Stanford University about how you get big social change. And it requires a broad cross-section of coordination.

00:47:49:09 - 00:48:09:19
Sam Rashkin: But recognizing that that's a challenge because everyone's isolated and, you have all these individual organizations doing their own thing. So you need some you need these five elements. You need some backbone support organization that kind of herds the cats, if you will. And you need a common agenda we can all agree upon this is this is where we're going.

00:48:09:19 - 00:48:36:20
Sam Rashkin: This is the, destination. And this is the we're going to agree on these, these specifications, whatever it may be. You need continuous communication, and then you need mutually reinforcing activities that everyone knows their role and what they're doing and a shared measurement system. So here's how we applied that move. Energy Star home. We were the backbone support group.

00:48:36:23 - 00:49:06:10
Sam Rashkin: Our program, we provided the agenda, the partnership agreements and the national program requirements. And we were just really aggressive with communication. We showed up everywhere, as I mentioned, extensive outreach. And then all of these mutually reinforcing activities kind of were able to be, engaged and, and to kind of set up so that they brought tremendous compliment to our program.

00:49:06:13 - 00:49:33:08
Sam Rashkin: So the hers rating infrastructure, the Building America program, I mentioned the utility institutional programs and the code programs, and I'll talk more about that in a second. And we had a shared measurement system, the hers rating, the number of certified homes. And we had conversion factors for what were the impacts the program was having on, dollar savings, energy savings, emission savings, all those we could all rally around these numbers.

00:49:33:10 - 00:49:59:07
Sam Rashkin: And the result was stellar. Over 3 million certified homes today. And most importantly, it accelerated the rigor of the National Energy Codes. More about that in a second. Right now. So here are the annual certifications for Energy Star and Light Blue and the cumulative certifications. Again you see this kind of a smooth curve that we had because we crossed the chasm.

00:49:59:10 - 00:50:24:20
Sam Rashkin: This is the classic again variation of that innovation curve that I showed you happening for our program. And so the key thing that was what I want to do is overlay it on this growth curve. The code changes. So on the left you have millions of homes being certified. On the right you have the energy use index 100 is pegged to 1975 code.

00:50:24:20 - 00:50:56:07
Sam Rashkin: And 40 is kind of where the latest codes are getting to. But what you see basically is in lockstep with our growth. We were able to go from the 2006, I took the 2009 to 2012 15, 1821. And effectively, these latest codes, I use it as baseline for the Zero Energy Ready Home program because there's zero energy ready, enclosure worthy, in other words, the worst home allowed by law to end it.

00:50:56:09 - 00:51:30:07
Sam Rashkin: As all these states keep adopting these latest codes, the worst home allowed by law is they're already, at least in terms of the enclosure. So really powerful. What happened in market transformation when you have it, when you have millions of homes, hundreds of thousands of homes, tens of thousands of homes voluntarily building that, these much more rigorous, specific specifications than the current code, the code processes that hard time saying those more rigorous specifications are not cost effective.

00:51:30:09 - 00:51:57:18
Sam Rashkin: And so the process is empowered to adopt these higher levels because of the empirical evidence of the growth of the Energy Star program. Okay, so I cover the history I want to spend time because again, I don't want these lessons learned to be lost. And I caution again, it's my perspective. Talk to as many of the amazing people that have worked in the program and life and that are still there.

00:51:57:20 - 00:52:30:27
Sam Rashkin: So some observations. And here's where I get a lot of concern because I talk about things as I see them, not because I'm trying to be judgmental or critical, but as opportunities to continuously improve. So the first thing I have to recognize is that diminishing returns baked into the success of the program. So here's an example with Energy Star dishwashers in 1996, the average consumption was 1200 and kilowatt hours a year.

00:52:30:29 - 00:53:02:17
Sam Rashkin: But an energy star dishwasher, an average would, use 600 kilowatt hours a year. So it's 600 kilowatt hours of savings in dark bread today, an energy, typical dishwasher now is down to 450 kilowatt hours per year. And an energy star dishwasher says you're 150. It consumes about 300. So you have four times less energy savings. Emission savings, carbon savings, cars off the road, savings.

00:53:02:17 - 00:53:39:04
Sam Rashkin: Everything is four times lower as you get more success. Okay. And also the number. Remember I said we target the top 25% most efficient, in 2025? Well, now the market share of dishwashers that are energy use for over 75%. Now, I'm getting a lot of this from AI queries. I've been doing. And so, I think these numbers, if even just slightly off, if you have the actual EPA statistics, which I hope they're based on, well, the story will be the same.

00:53:39:06 - 00:54:17:15
Sam Rashkin: And when I take this to Energy Star certified homes, the diminishing returns are even greater. Diminishing returns are even greater. So, and I'm going to say, I believe this chart is way understating how much the savings have shrunk because, again, I've gotten the annual kilowatt hours used per house total energy use from I query and it was about 15,000, in for 1993, Mac House and Energy Star home would save you about 15,000.

00:54:17:15 - 00:54:42:28
Sam Rashkin: So any star home would save you about 5000. It would be about 10,000. So you were saving 5000 kilowatt hours in, when the program began. Today, a 2021 HCC home consumes about 10,000 kilowatt hours. An Energy Star home would save you 10%, 11% of that. So you've shrunk the savings? About five times since the program launch.

00:54:43:01 - 00:55:08:24
Sam Rashkin: And again, just observing that the price keeps shrinking, but the program size is the same. Even more people working there. Maybe, you know, you're getting less return per investment as a as a product of the success of the program. Now, when we look at these diminishing returns, I'm going to suggest, you know, I know there's a lot of horror and shock that the programs up for whether it continues or not.

00:55:08:27 - 00:55:29:22
Sam Rashkin: But maybe, just maybe, there's an option that every government program or element of a program doesn't continue in perpetuity. There might be an opportunity where you go, you know what? We declare a victory. Well, if not, shut down the program, you figure out how to optimize it so there is greater impact. And I'm not saying to shut down the program.

00:55:30:00 - 00:55:56:18
Sam Rashkin: I'm saying, you know, it's important to sound reasonable. And if the if the return on investment keeps shrinking, you have to keep looking at other, other options or ways to add more value. Now. So this leads me to these recommendations to address diminishing returns for continuous improvement. These are some opportunities all throughout there you maintain the high value products I mentioned earlier.

00:55:56:18 - 00:56:33:20
Sam Rashkin: I believe Energy Star Buildings is incredible because what we learned from my colleagues when I work there is that the how a building's operated is more important than the frequency with which it's built on a commercial building, the operations is more impact than the energy efficient construction of the building. And so portfolio manager, portfolio manager, manager does is it gives us a powerful tool for seeing the effects of how buildings operated relative to comparable, comparable buildings, of that type.

00:56:33:25 - 00:56:51:25
Sam Rashkin: Or you can have a fleet of buildings to compare all your buildings and see which are not energy hogs and which are the energy stars, and figure out what the learn from the energy efficient ones that could be applied to the energy hogs. And every year you got to earn your medal, the Energy Star label for buildings is earned every year.

00:56:51:28 - 00:57:26:29
Sam Rashkin: And so you were constantly being, tasked to deliver that operation's efficiency every year. It's just a great program. So that's why that one, I would call it go Up. Everything goes. This is one program. I hope we find a way. You got to keep this program. And then you want to declare victory, as I suggested. Maybe where significant transformation happens, they already did kind of with light bulbs, but I'll suggest it for a couple of years now, virtually the only light bulb on the shelves are Home Depot or Lowe's have been LEDs, and it took until December last year before they sunset.

00:57:27:01 - 00:57:43:22
Sam Rashkin: The and it just ended. You start a label for light bulbs, but I think there are going to be lots of opportunities. If you look at all the products that we're labeling, maybe there are others that we can plan a sunset strategy for them as well. We don't do we need to do everything in perpetuity? And then what we need to do is sunset.

00:57:43:22 - 00:58:05:19
Sam Rashkin: The low value products. I don't know why we label insulation, and I queried and asked why we were doing it when it was being developed. I'm not a big believer personally. Next gen home. I don't think it's in our lane. I don't it's not. It just doesn't work the same way. It's just not following. I think the core, proposition of what Energy Star does.

00:58:05:19 - 00:58:24:09
Sam Rashkin: And more importantly, I think it's just a hard one to translate the value up in the marketplace. My opinion. Okay. Others love it and you have to weigh all the reasons and we can have debates and discussion. But those are the examples from here. Maybe there are some parts of what we're doing that add less value to lower value.

00:58:24:11 - 00:58:55:17
Sam Rashkin: Okay. Next comment is increasing burden complexity. So this is the spec for Energy Star version 1.0 that I showed you that we put out there basically 30% greater than code performance. And then you had to add the verification. And we focused heavily on duct ceiling. Good buddy. Mark Madera was developing Arsenal at the time, and he'd got a lot of research brought to our attention that showed just how disturbing the duct leakage was across the board and new and existing construction.

00:58:55:17 - 00:59:17:24
Sam Rashkin: So we really went after document quite a bit, and then we threw in two extra encouragements into the spec just to make it a little more full out. We had a homeowner education and whole house approach, so that was it. And you look at Energy Star today and the stunning complexity and I'm going to suggest possibly burden it.

00:59:17:26 - 00:59:47:18
Sam Rashkin: It just has gone up exponentially from my view. But I'm not in the trenches. So we need to talk to the guys there and see if there are opportunities or not. But you see that there are, three sets of program requirements currently 3.1, two and three. The national measures, there are there is review, design review, checklist to write of fuel checklist and Hvac design supplement and extract design report and Hvac commissioning checklist.

00:59:47:20 - 01:00:13:08
Sam Rashkin: And then you have all these various versions, including for the Pacific program for Hawaii and, other islands in the Caribbean. And you have programs for California, which has a zero energy code. And, so you have what you have all this complexity of a program. And then this is the national program requirements for 3.1. It's like all things you got to do.

01:00:13:10 - 01:00:43:18
Sam Rashkin: These are all and what want I want to make about this is I always get nervous with complexity is that you don't recognize innovation. Do we really need air leakage testing? For my friends who make this prefabricated concrete panel system, or CIP homes. I mean, I've got to struggle to find a CIP home that is above 1.5 and 50, and most is programs three is going to be good for almost any market.

01:00:43:18 - 01:01:07:15
Sam Rashkin: You're in there like almost double the efficiency of a standard CIP home or insulated concrete panel home. Or a lot of these panel systems. Can we just exempt them from air leakage testing? Or if you use a red duct system, it's plug and play. It takes the installer equation it you snap it together airtight. And when you stretch it out you get really good airflow.

01:01:07:18 - 01:01:36:25
Sam Rashkin: Can we eliminate the rear duct systems from all this? Hvac quality? Installation requirements are substantial. And what about automatic automated fall detection diagnostics? The old Sensi predict, that should have gone. It got an exemption now, so a lot of people use it. Emerson doesn't still manufacture essentially product. And I can go on and on there. All these innovations that should be in the spirit of business, be exempted, I believe, because we want to encourage those innovations.

01:01:36:25 - 01:01:55:28
Sam Rashkin: We want to give them maybe a little extra wiggle room and take a little risk so those innovations can get to market. But these this kind of detail locks them out, doesn't allow the innovations. And it's also a burden for everyone to figure out. Understand you have this is a later review checklist you got to do. This is the radar design view.

01:01:56:00 - 01:02:20:10
Sam Rashkin: We view checklist notes. Then you have each fact design report you know which is which is really pretty detailed and rigorous. I suggested burdensome for people involved. And then you have the Hvac design report notes, and it looks more like a regulation than IT voluntary program right now. And then you have the Hvac design report you have to do on top of this.

01:02:20:13 - 01:03:12:19
Sam Rashkin: So you kind of get my point on we just at least take a shot for saying, is there opportunities to minimize all the burden, all the complexity in the construct of the program right now. Now, my belief is if, you know, the duct system is sized by a credible professional, and if you actually, very in good detail, inspect the duct layout in the house and make sure no kinks and bandage, no sagging, excessive length if everything's going per the design and without the, installation, defects, that constraint or anti-static pressure, do we need to do all these other testings that we're doing can rely on standard, refrigerant charge

01:03:12:19 - 01:03:39:07
Sam Rashkin: testing? I'm, I'm just asking the question. I'm saying, do we have to have all this complexity and can we exempt the innovations? Like I mentioned, we are CIPs, automated fault detection, diagnostic concrete panels and others. And should we consider shedding low value segments, do we really need to have the label active in markets with a zero energy code like California or really rigorous codes, like Massachusetts?

01:03:39:11 - 01:04:05:01
Sam Rashkin: Stretch codes like Massachusetts and Vermont and Oregon and Maine and what severe Boulder has a almost a zero energy ready code, really? Because all you're doing is creating free riders. Now, homes in those markets get the same 45 year old tax credit that the builders have to work much, much harder and spend more to do it in states and cities without these rigorous codes.

01:04:05:04 - 01:04:26:27
Sam Rashkin: And so we create a lot of extra burden on the tax base, because we're giving these credits market. So it takes a little to get them or almost nothing. And a low value segment might be do we need energy star in the Caribbean Pacific Islands, the program was designed to address primarily enclosure issues and primarily the Hvac issues.

01:04:26:27 - 01:04:59:03
Sam Rashkin: And these Caribbean and Pacific islands are 75 degrees in winter or 85 degrees in summer. It's the windows. It's the attic insulation. You know, insufficient cushion, Hvac. Those, those markets come up with their own much more simple program and avoid also, the 45 year old tax credit going to places where the return on investment for the tax credit, in terms of the savings from business as usual will be much greater.

01:04:59:10 - 01:05:22:22
Sam Rashkin: So I just ask the questions. Maybe I'm wrong, but at least I want to know that we are studying and with rigor, the opportunities. And we made decisions based on our findings. And just to show you a continuous improvement in plot applied, the first time my life I didn't have imposter syndrome was when I got to do a, and, and part of my job was you energy ready home.

01:05:22:22 - 01:05:47:18
Sam Rashkin: I had a I studied so much all these books on on scaling and change and, and, and I spent so much time documenting the lessons learned. I knew we could do this program more efficiently if I could start from scratch. So we went from five PVI or Energy Star certified home Background or Energy Ready home light brown to 0.5 pi.

01:05:47:19 - 01:06:20:07
Sam Rashkin: So it's not half of my time was. But is there energy ready home? No other staff. We went from five pi because I knew everything to do and I just outsource everything to the contractors. And yet the budget went down from 1.5 million to half a million, and we were getting tremendous impacts on almost everything we did. By being more efficient, we use the Hurd's registry instead of spending like $1 million to come up with a, registry, because now we had that tool available for use, the registry, we didn't do the Energy Star Awards in DC.

01:06:20:09 - 01:06:45:16
Sam Rashkin: We did them at IBA, where 5 or 600 housing professionals or two, or you're already home in the, Housing Innovation Award winners and clapped for them, rather than just three of the builders coming to DC. And with no other builders in the audience, and only that we had the, you know, we able to use the application for the awards to generate the zero energy ready home.

01:06:45:19 - 01:07:09:27
Sam Rashkin: Power of Zero and showcase all the energy testimonials and savings and benefits. So we were really getting so much more efficient and so much more optimized because we had no budget and we had no staff, and we had to really learn from what we were doing. So I again, I my, my suspicion is there's lots of room to be more efficient and better.

01:07:09:29 - 01:07:38:19
Sam Rashkin: So we wrap up now with basically, a quick summary of likely changes of how do we adapt. So the three things that are three key options for how things will change. Our first number one, that EPA continues, the Energy Star program, you know, the policy, the sunset, the programs reversed or industry and non NGOs are successful lobbying to keep energy start program at EPA.

01:07:38:19 - 01:08:07:26
Sam Rashkin: So one option is EPA continues, the Energy Star program. The second option is, per the current policy announcement to the EPA Shadows Energy Star program, but it will continue operating by maybe transitioning it to DUI or having it prioritized or privatized. So it may be shuttered but continue operating. And the third option for change is that the Energy Start program just continues.

01:08:07:29 - 01:08:30:11
Sam Rashkin: What everyone needs to do is relax. There's no specific date set for the shutdown yet. And so, but we know that's from one of these three things will happen, but no one knows. Precisely. So just to make life simple for you, just let's keep it clear. These are the three options, okay? So how do we adapt to each of those options?

01:08:30:14 - 01:09:07:17
Sam Rashkin: Well, if EPA continues Energy Star because of successful change in policy or intervention, continue working with the program. It's one of the most amazing examples of good government. But I, I really want to stress what opportunity we have, I think for continuous improvement, cost, waste, burden, complexity, innovation exemptions and shedding low value segments. I think if we learned anything, the more defensible we can make the program, I think the more persistent we can make.

01:09:07:17 - 01:09:35:13
Sam Rashkin: The program. If number two happens, if EPA shut is Energy Star, but it transitions to deal we or it's privatized support and work with the new and the new with the new implementer new implementer. And look again for continuous improvement opportunities because we want persistence. And if even energy start, this continues. Find alternatives to high performance homes. It's better for business.

01:09:35:15 - 01:10:03:26
Sam Rashkin: You can always use Energy Star certified home specs to distinguish your homes or in the public domain. And if you meet and exceed those specifications, that's always something you can claim to. Or you can just use a percent above code as an alternative. Or let's use a more compelling metric, you know, instead of 0 to 101 hundred plus what people react more emotionally to what they understand already.

01:10:03:28 - 01:10:27:07
Sam Rashkin: What requires no education is if you get to 80 is great. If you got an F, you need to be really upset or 1 to 5 stars. Now, none of us want to do business or buy a product that's a 1 or 2 star product or service. We a lot of us will filter for 4 or 5 stars, but her rating when it first came out was a five star rating.

01:10:27:09 - 01:10:55:18
Sam Rashkin: They were ahead of their times, but we got dropped in favor of the 0 to 100 scale is the only metric. I'm saying let's let's make high performance more compelling by making it emotional. No one wants. I have a have a house that gets an F or a D, and we love to brag. If we get an A in something or we understand, we really in trouble if our house is 1 or 2 stars, a really exciting 4 or 5 stars.

01:10:55:20 - 01:11:26:11
Sam Rashkin: Let's leverage what people react emotionally to and let's translate value more effectively, not relying incentives. No 25 LS in a very fragile position right now for, continuation. And if instead of always being reliant on that tax incentive, but really on the value proposition, that's so superior for high performance, we're better off. So I'm that time, I'm going to basically wrap up with the key comment.

01:11:26:16 - 01:11:38:21
Sam Rashkin: I know I've try to say this in the best way I can, and not getting as much trouble as I can avoid.

01:11:38:24 - 01:12:18:27
Sam Rashkin: Many people are upset with the outcome of the last election. And I'll suggest one of the, I think, significant, factors that contributed to the outcome was, I think one party was pretty clear addressing real, obvious problems that people knew and could see with their own eyes. The other party was less rigorous doing that. And I think, you know, when we ignore what people know and understand, we risk persistence.

01:12:19:00 - 01:12:45:11
Sam Rashkin: And I think, what I'm saying about this whole presentations, Energy star is probably one of the best examples of good government we can find, but we have opportunities to do better to bring back the John Hoffman, insane innovation and a little bit of risk taking and just amazing ability to pivot and do things at the speed of business.

01:12:45:13 - 01:13:12:05
Sam Rashkin: So, I think the more we can make the program so defensible and tighten up its value and how it works, I think everyone will be better off because this program deserves to be around in perpetuity. I hope this makes sense. I'm afraid people might be upset with things I've said, but Mike, I'm ready to take some questions.

01:13:12:07 - 01:13:37:13
Mike Collignon: All right, Sam, buckle in, buddy, we got questions. I I I, I do that just because I wanted to cut some of the potential tension or anything like that. Actually, we do have questions. But, I think you're going to kind of enjoy it because, for some, they resonated with the history of it. And we're going to ask a couple of questions about that.

01:13:37:15 - 01:13:58:00
Mike Collignon: And then we're also going to talk a little bit about kind of future thoughts too. So in regards to historical let's go historical first. And by the way, some of the people that you mentioned are on, the meeting here with us. So, you mentioned Darren. Walsh. Jeff, he's on here with us.

01:13:58:06 - 01:14:22:09
Mike Collignon: Another thing you didn't mentioned, but, you know, well, Eric Rawlings with us, too. But there was a question that came in, from Connor. Is is John Hoffman still around? Is he is he retired? Is he still alive? Like, can you talk a little bit about some of the people that you mentioned? Do you, do you stay in touch with them at all, or what do you know about their whereabouts?

01:14:22:11 - 01:14:44:22
Sam Rashkin: Sadly, John Hoffman got into a little bit of a tangle with some very, very senior leadership at EPA. And like I said, he left after least within a year and a half after I was there. Probably one of the biggest disappointment of my life was that John left EPA. I had didn't have more time to work with him.

01:14:44:25 - 01:15:04:26
Sam Rashkin: Sadly, he passed about, 6 or 7 years after he left EPA. He, there was a big loss, and sadly, he's not around to keep, tapping into his amazing wisdom, so. But he what an amazing person was.

01:15:04:29 - 01:15:16:21
Mike Collignon: Gretchen. Let's again, we'll stick with the history for a minute. Do you remember who coined the term hers or home energy rating system?

01:15:16:24 - 01:15:41:12
Sam Rashkin: It was developed versus developed, ironically, for existing homes and, EPA ideally, like a major initiative. I don't know if they're the first and coined it. There's a lot of things going on, but the first time I became aware of it, it was a doe program. And that's where Hero Home Energy Rating Organization was one of the first rating groups I knew about.

01:15:41:12 - 01:16:04:26
Sam Rashkin: There was energy rated Homes of America at the very beginning. And, then resonant was formed when they came to us for Grant three, Steve Bannon and two gentlemen, brought Steve in from Alaska, came into our office, and we gave them a sizable grant that enabled Steve to just do the amazing things he's done with, with hers and ResNet.

01:16:04:29 - 01:16:27:10
Sam Rashkin: So, but the first I was aware of hers was DOA in the 90s, and, it was there primarily for existing homes. And then what made it become an industry is new homes, because Energy Star said this is a horse we're going to ride. This is a catch. Our wagon, too. So, that's how, the history that I know about hers.

01:16:27:12 - 01:16:37:12
Mike Collignon: And, Eric contributed to that. Ron Hughes was involved with, with the term, but he also passed away a couple of years ago as well.

01:16:37:14 - 01:16:44:01
Sam Rashkin: And that's one of the amazing people we people need to talk to as well.

01:16:44:03 - 01:16:54:04
Mike Collignon: Could you describe some of the challenges you faced early on? From the hers industry in implementing the Energy Star certified home?

01:16:54:07 - 01:17:30:22
Sam Rashkin: Oh, we were locking horns all the time. Not because they were bad or I was bad, or they were good and I was good, but because we were both under such tremendous pressure, I mentioned often was pretty clear. There you arrive. He's told you you're out the door if you don't get Abcde done. I never seen government like that before, and the hers industry was just struggling to get a basic foothold so that they had a viable association and a viable, way to attract people into the industry.

01:17:30:25 - 01:17:52:04
Sam Rashkin: And so if I wanted to do something that was perceived as reducing the income flow and business opportunity for the Raiders, but making less burden for a builder, we would be locking horns. I had to get builders into the program. They had to make sure the Raiders would want to become a writer, and it was because everyone had the right interest in mind.

01:17:52:07 - 01:18:20:23
Sam Rashkin: What were a conflict? Sometimes. But this is where Dave Lee was. David Lee was so amazing. Coach, David really stepped in to be the kind of the, key point person to manage our relationship with the Hersham tree. And it was just a success and doesn't get credit for it. There was a moment where I think he was being criticized by the herd's industry and not shown respect for their existence would not be there.

01:18:20:23 - 01:18:41:27
Sam Rashkin: But for David Lee, I think that's been mended since then. But, that's what we had. We had people who brought all these critical pieces that complimented each other, but the rating industry and us were tremendously collaborative, and the partnership was amazing. But we had our rough moments, you know, it's just the way it should be.

01:18:41:29 - 01:18:59:25
Mike Collignon: Yeah. So I wanted to make sure to insert a compliment here. Our friend Rory Schwartz, wants to thank you for all that you've done. The Energy star version two in the thermal enclosure checklist. Transform the Denver market with the Stapleton redevelopment. So we wanted to.

01:18:59:28 - 01:19:09:26
Sam Rashkin: And he's an amazing, he's amazing what he did in his industry. So we owe him a lot to know.

01:19:09:28 - 01:19:38:20
Mike Collignon: So I wanted to get to a couple of kind of forward looking things. Now, if we could, so there was a question. Are you familiar with the American Society for quality? They have a, construction, quality or quality manager certification. The, the RNC partner for quality management standards in the US and optimization is a part of what they're advocating or talking about.

01:19:38:22 - 01:20:03:02
Sam Rashkin: Now, I'm not familiar with them. I'm trying to figure out if that's part of a housing innovation research lab or if it's a separate group or Housing Innovation research lab as a whole. Quality assurance program for builders and set of protocols and, ways they work with the industry. I don't know about the success of those programs.

01:20:03:02 - 01:20:15:00
Sam Rashkin: And, you know, I it's, I like just tangentially aware. So I won't have anything meaningful to, to, say about them.

01:20:15:03 - 01:20:39:24
Mike Collignon: So there's a question about, the towards the end of your presentation, you were talking about, okay, what can we do? Where can this go? But, Matthew wanted to ask a question. Can you talk a little bit about the statutory requirements that are placed upon EPA or D.o.e. when implementing or managing the Energy Star program?

01:20:39:24 - 01:21:03:11
Mike Collignon: And let me clarify this question. Would federal law would or wouldn't federal law prohibit privatization or discontinuation? You know, you can move to a different agency, but do you think that there may be some violation of some sort of federal law if it went the private route or it was discontinued?

01:21:03:14 - 01:21:31:08
Sam Rashkin: Again, this is outside my pay grade. You know, all this, I know, the legislation that was used to create the, and our Climate Partnership division and EAP and Energy Star, all those things, how it got created. But I don't know the again, are you locked in forever or can, another administration kind of change and cancel the programs?

01:21:31:11 - 01:21:48:11
Sam Rashkin: So I can't answer that. All I can say is that in the current political climate, it just seems that if, you want to shut down programs, you can shut them down. It's what it seems to me.

01:21:48:13 - 01:22:13:13
Mike Collignon: So, let's go back to something that Robby brought up. He agrees there are ways to simplify things, but his comment is you get what you inspect, not what you expect. So that sips the foam. It doesn't always ensure performance. And his other comment was, if you if you want to quantify the performance, you need to do the testing.

01:22:13:15 - 01:22:44:07
Sam Rashkin: I so respect Robby. It's I can't even explain how much respect I have for him. So here's where I suggest I just recommend testing both options. I think the 8020 rule, the two issues here. One is the 8020 rule. The one is, how much quality control we're getting with the existing system. And first, the 8020 rule is, I'm going to suggest, like 90% of CIP homes are 1.5 ACH, 50 or less.

01:22:44:09 - 01:23:10:15
Sam Rashkin: Am I going to worry about the other 10% and have all 100% go through a diagnostic and measurement protocol just to try to worry about that, especially knowing that I don't believe the existing protocols with a complete Hirsch verification can meet those thresholds as well. I think there's a lot to get through the Hirsch quality assurance process that is less than optimal.

01:23:10:18 - 01:23:44:08
Sam Rashkin: Just look at all those details that I showed you for the Energy Star program, all those checklists and reviews and, quality insulation requirements and, and, and protocols for Hvac and generators getting for production builder, maybe 4 or $500 a house, maybe 600. And how much time does that leave to to oversee maybe 40 pages of sixth form notes and specifications and requirements and testing.

01:23:44:10 - 01:24:04:18
Sam Rashkin: And so how much? We don't know how much quality assurance we're getting from the current system. So when you look at these homes, if there is a problem, I'm going to suggest that it's visibly obvious. You can see the daylight through a soot panel if the seams, but you get a panel goes in with belts and suspenders. You have two panels of joined together.

01:24:04:18 - 01:24:39:06
Sam Rashkin: They put foam, they spray foam on on the insulation of one panel, then they join it. And then there are two splines on either side with further air barrier and leakage blocking. And then they'll kind of tape over the joint as well. I mean, it's just really hard to get, leaky ship home. Yeah. Their conditions and design into things can fall through the cracks, but I think there are visual inspections that can give this the same or better results than we do blower door testing, frame homes.

01:24:39:08 - 01:25:06:04
Sam Rashkin: Or at least that's on hypothesis that, say let's test our hypothesis. If there are 300 plus thousand Energy Star homes certified last year, and do we need to do 350,000 diagnostics for air leakage, including the homes that already are almost guaranteed to be airtight enough? And if they're not airtight enough, I'd, Smith at least, would be visibly, visibly obvious.

01:25:06:07 - 01:25:26:12
Sam Rashkin: And more important, I believe the existing system. We don't know how good the quality assurance is. I don't think it's ever been subject to the kind of rigor of quality assurance verification outside the industry. Looking in that other products are subject to so.

01:25:26:14 - 01:25:56:29
Mike Collignon: So, our friend Ted Clifton brings up something interesting. Sam. You know, if you're in a city, it can be relatively inexpensive to get a blower door test done because of proximity. Other places it could be a very multi-hour drive, one way to get a rater there. And so, this comment is, you know, we got to recognize this difficulty and a default option might be worthwhile.

01:25:57:01 - 01:26:02:02
Sam Rashkin: It Ted's very thoughtful. That's a great comment. Yeah.

01:26:02:04 - 01:26:23:29
Mike Collignon: The the other kind of, recommendation, if we could, from Eric Whirling. It was it goes to the final point that you were making, Sam. He suggests that people, check out Ezra Klein book abundance. Regarding what government could do better, it builds on the final point you made in a very practical and optimistic way.

01:26:23:29 - 01:26:27:09
Mike Collignon: So a plug for Ezra Klein book recommendation.

01:26:27:09 - 01:26:29:08
Sam Rashkin: Great recommendation.

01:26:29:11 - 01:26:39:05
Mike Collignon: Let's let's get through a couple other questions though here. So you brought up alternative metrics. Could it be tied to something like that. You use EPCs?

01:26:39:07 - 01:27:01:02
Sam Rashkin: Exactly, exactly. Like yeah okay. And there are a lot of things Europe does that just seem smarter to me. And the things we do that seem in the US that seem smarter than Europe does, but, some things that they do really smart, for instance, are the EPA, you know, the energy labels in Europe, the ABCs, and the way they implement it.

01:27:01:02 - 01:27:33:25
Sam Rashkin: It's just incredible. Every home a transaction has to have a label. And so it's really attractive. We we can learn so much from what they're doing. And it's amazing how little we build on what's working in Europe here and vice versa. Just just to give another example on a completely different field, you know, when France does nuclear power plants, so built in the entire country, all power plants with one system, one set of plants, one set of trained, skilled crews that manage and keep them running properly.

01:27:33:25 - 01:27:56:13
Sam Rashkin: And it's just so much more cost effective than having all the plants in the US are built with different systems and you need different plants, need different crews, and so the the whole operation in Europe, they figure out how to be faster, better, cheaper, providing power. And we don't copy each other and learn from each other enough. So, that's you know, that's just what I'm saying.

01:27:56:13 - 01:27:59:29
Sam Rashkin: Let's build on what's working.

01:28:00:01 - 01:28:25:09
Mike Collignon: So Alex brings up a question, what are your thoughts on the potential of the of the industry? You know, the home building industry to position itself as a short term solution to meeting low demand from data centers? Because if we're building more efficient homes at scale, shouldn't this free up power for those kind of facilities, then, rather than building up more new power generation?

01:28:25:11 - 01:28:54:22
Sam Rashkin: Much more so in existing homes and new homes, and it depends on where the homes are being built, so forth, and how many homes are built. So possibly I don't know the answer, but, by far, I think the, you know, you talk about the big price, we look at the inefficiency, the existing housing stock, 85% was built before 2000 when the codes were 70, 80% less rigorous or more, you know, our, our big opportunity in that case would be, existing homes.

01:28:54:22 - 01:29:20:17
Sam Rashkin: And that's what I work on with Oak Ridge National Lab, kind of a, a pathway to how we can scale existing homes and, and what are the savings from those that scaling is used for data centers or just to, reduce, fossil fuel power plants? I mean, there are a lot of ways it can be, leveraged for, for grid benefits, but it's it's one approach.

01:29:20:17 - 01:29:24:24
Sam Rashkin: I guess you could take,

01:29:24:27 - 01:29:57:00
Mike Collignon: All right. Well, I, I want to thank everybody for attending today. Thank you, Sam, for not just the, the outlook, but also the history of it. I got a chance to communicate with a few people while this was going on, and, and, they very much appreciated the historical side of this. And, so I thank you both, you know, for the outlook looking forward, but also the historical side of it and all the wonderful questions and comments and compliments that came in from everybody.

01:29:57:00 - 01:30:18:02
Mike Collignon: We really do appreciate you being with us today. That that kind of concludes today's seminar, but, I gotta make sure to thank Panasonic, a healthy, healthy indoor living solutions for their generous sponsorship of this webinar. We very much appreciate them. There, our next webinar is actually going to take place in about two weeks. It's going to happen on July 9th.

01:30:18:02 - 01:30:38:18
Mike Collignon: We're going to be joined by Chris Mag Wood as he discusses the manufacturing of building products, from upcycled biomass. And that's going to start at 2:00 pm eastern time, just like this one did here. Until next time, have a safe, wonderful 4th of July. Make sure you check those tires and stay healthy and take care everyone. So long everyone.