Energy Exchange

Need Help Funding a Retrofit? Use an Efficiency Services Agreement

By Guest Author / Published: May 19, 2015

By Scott Henderson, Advisor to Metrus Energy

While many in the clean energy industry are familiar with the use of power purchase agreements (PPA) to finance solar energy systems at commercial and industrial facilities, many may be surprised to know that there is a similar contract for funding energy efficiency retrofit projects. Called an efficiency services agreement (ESA), this contract was designed to address the challenges, or “pain points,” that building owners commonly face when contemplating such projects.

Like a PPA, an efficiency services agreement enables third-party ownership of a project, in which a developer designs, finances, implements, and owns a package of energy and water efficiency measures at a customer facility. In return for implementing the project, the ESA provider charges the customer for any realized savings, at a rate that is less than their current cost of electricity, gas, or water. This continues until the end of the contract period, typically 10 years, upon which time the customer can renew the contract or purchase the equipment at fair market value. Read More »

Posted in Clean Energy, Energy Efficiency, Energy Financing, Investor Confidence Project / Comments are closed

Electricity Pricing: The Times, they Might be A-Changing

By Jamie Fine / Published: April 30, 2015

Last week, the California Public Utilities Commission (CPUC) issued a proposed decision on residential rate reform. Residential rate reform – how and what Californians pay for electricity – is a thorny subject, and the Commission’s proposed decision is being met with a range of reactions.

We at Environmental Defense Fund (EDF) want to highlight a bright spot in the 300-page document that we’re thrilled about: the attention paid to time-of-use electricity pricing (a type of time-variant pricing). Buried in this long legal document, we see EDF’s fingerprints in the Commission’s call for California investor-owned utilities to ramp up their use of this innovative yet well-proven pricing tool starting with pilots in 2016 and going to scale in 2019.

How TOU Works

If you’ve been following EDF’s work in this area, then you know we’ve been involved in this process for many years and have probably gathered that we’re big fans of time-of-use pricing (TOU) because it better reflects the true cost of electricity, which fluctuates throughout the day. This type of pricing also empowers customers to better control their own energy bills and reduce our reliance on fossil fuels.

TOU pricing works by breaking up the day into two or three large intervals and charges a different price for each. Rates can be divided into off-peak prices (generally during the middle of the night to early morning), semi-peak prices (daytime and evening), and peak prices (occurring during periods of highest demand, usually afternoon to early evening). These rates remain fixed day-to-day over the season.

Posted in California, Clean Energy, Electricity Pricing, Time of Use / Read 1 Response

Stakeholders Gather to Discuss How Time-Variant Electricity Pricing Can Work in New York

By Beia Spiller / Published: April 8, 2015

Last week, Environmental Defense Fund (EDF) co-hosted a successful forum on residential time-variant electricity pricing – which allows customers to pay different prices for electricity depending on when it is used – within the context of New York’s ‘Reforming the Energy Vision’ (REV) proceeding.’

Co-hosted with the New York Department of Public Service and New York University’s Institute for Policy Integrity, the full-day forum, “On the REV Agenda: The Role of Time-Variant Pricing,” brought together more than 150 regulators, utility executives, academics, and other stakeholders to explore how residential time-variant pricing works, what it can accomplish, and how best to implement it. Below is a recap of some of the high-level takeaways from the forum.

How time-variant pricing (TVP) works

One of EDF’s objectives has been to improve the efficiency of the electricity industry by pursuing a market-based approach to electricity pricing. In most well-functioning markets, the cost of making a product and its relative scarcity is reflected in the price. For example, a door is more expensive than the wood with which it is made in order to reflect the labor costs involved. Similarly, strawberries are more expensive during the winter because they are less abundant during that time. Customers understand that prices vary with production costs and over time, yet neither of these elements gets reflected in how residential customers currently pay for electricity.

Posted in Clean Energy, Electricity Pricing, New York, Utility Business Models / Comments are closed

Emerging Technologies Can Pave the Way for Time-Variant Electricity Pricing

By Ronny Sandoval / Published: March 23, 2015

The amount of energy we use at any given time is constantly changing. Lights are switched on and off by time of day – other appliances, such as air conditioners, might operate based on the season. In order to meet our dynamic energy demands, our system has to have the infrastructure and resources in place to respond when needed.

What may not be clear to many of us is that the costs associated with supplying this electricity also change with time, and during certain hours of the day and year these costs can be much higher. This isn’t readily apparent because the electricity rates we pay throughout the year are essentially flat.

Many, including Environmental Defense Fund (EDF), have made the case for electricity pricing that helps signal these fluctuating costs to customers. There are a variety of ways to design pricing that varies with time, while communicating to individuals and businesses the value of cutting back on electricity, or shifting use to other times. These options can take the form of paying a different amount for energy at different times, or perhaps being compensated for reducing use at times when the electric system is most constrained. Read More »

Posted in Clean Energy, Electricity Pricing, Grid Modernization / Read 1 Response

Ohio Pressed Pause on Economic Growth When It Froze Its Clean Energy Standards

By Dick Munson / Published: March 18, 2015

Ohio shot itself in the foot last year and we’re only now learning just how bad the damage is.

In May of 2014, the Ohio Legislature froze the state’s energy efficiency and renewable energy standards as a result of political pressure from Ohio’s largest power company, FirstEnergy, and other groups. This freeze came after efficiency measures led to more than $1 billion in savings for Ohioans, clean energy companies invested more than $660 million in 2012 alone, Ohio boasted the nation’s largest number of wind-component manufacturing facilities, and the state created 43,000 in-state jobs within the clean energy sector.

Needless to say, from 2008, when Ohio enacted its clean energy standards, to 2014, when it froze them, the Buckeye State was a clean energy powerhouse. But, as the Center for American Progress reports, when Ohio put a freeze on its clean energy economy, it hit the pause button on its entire economy.

According to the report, the freeze cost Ohio millions of dollars in energy investment. That equates to job losses, cancelled projects that would have brought sustained tax revenue to Ohio, and shifting operations to other, business-friendly states. Read More »

Posted in Clean Energy, Energy Efficiency, Ohio, Renewable Energy / Read 2 Responses

Sometimes it Takes a Community to Go Solar

By EDF Blogs / Published: March 3, 2015

By: Andrew Barbeau, EDF’s clean energy consultant

You don’t have a south-facing roof. You have too many trees in your yard. You may not be committed to staying in your house for the next ten to fifteen years. Or maybe you rent, or don’t have the upfront money to install.

These may be some of the reasons why you can’t go solar. You are not alone.

In fact, only 22 to 27 percent of residential rooftops are suitable for installing a solar PV system, due to structural, shading, or ownership issues, according to the National Renewable Energy Laboratory. These effects are even more prominent in densely-populated, urban areas, like Chicago, where viable project siting is limited and renters account for more than half (55 percent) of housing.

But in a new utility world of flowing electricity data and layered intelligence, we shouldn’t limit participation in the rapidly growing solar market to those inconvenienced by circumstance. We need to shift our thinking of distributed solar from the individual to the community. Read More »

Posted in Clean Energy, Illinois, Renewable Energy / Tagged Community Solar | Comments are closed