Before Installing Solar, You Need A Home Energy Efficiency Assessment
Tuesday, October 13, 2009
Before you install those solar panels, it would be a good idea to have a home energy assessment done on your home. We discuss the importance of energy efficiency, and the most common ways that people waste energy in their homes. And, we'll find out how the City of San Diego's new Clean Generation program might benefit local homeowners.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. Despite recent budget troubles and political gridlock, California is still a state with big goals, especially when it concerns going green. Our state has set targets for significant decreases in carbon emissions, and in order to meet them, it seems we're all going to have to make some changes. Lots of those changes will take place inside our homes, and they can range from the low-impact of switching to compact florescent light bulbs to the big impact of putting on solar panels, and lots of things in between. There are many programs and rebates and incentives to move people in the direction of reducing energy consumption, but many of those programs begin with a home energy assessment. There's no need to change everything in your house if just an adjustment here or there could lead to major energy savings. And even with solar panels, poor insulation will still make you lose energy. So this morning, we'll examine both the high tech and low tech ways that homeowners can re-evaluate their energy use and take advantage of some government programs designed to decrease carbon emissions and reduce your energy bills. I’d like to welcome my guests. Andrew McAllister, director of programs at the California Center for Sustainable Energy. Andrew, welcome to These Days.
ANDREW MCALLISTER (Director of Programs, California Center for Sustainable Energy): Hey, Maureen. Great to be here.
CAVANAUGH: And Ted Torre-Bueno is president and founder of Empowered Energy Solutions. Good morning, Ted.
TED TORRE-BUENO (President and Founder, Empowered Energy Solutions): Thanks for having me.
CAVANAUGH: And we’d like to invite our listeners to join the conversation. If you have questions about making changes in your home to save energy, give us a call. Or maybe you’ve made improvements to make your home more energy efficient. Tell us about it. Our number is 1-888-895-5727, that’s 1-888-895-KPBS. Andrew, it seems that sometimes we’re also dazzled about new technology, solar and wind, that the concept of starting out low, I mean, starting with low impact changes, energy efficiency, it often seems to be forgotten in all of that.
MCALLISTER: That is very true. I mean, energy efficiency is sort of the unsung hero, if you will, of state energy policy. California, electricity consumption has remained, well, it’s grown a lot slower than it has in the rest of the country. And, in fact, per capita electricity consumption has been flat for the last 30 years in California whereas it’s continued to grow throughout the nation as a whole, and that is largely due to California’s innovative energy policies, our appliance efficiency standards, our building efficiency standards and things that, you know, don’t come across as very sexy but they have been incredibly effective at changing the way we consume energy and keeping its impact to a relative minimum. I think there are all sorts of policy things happening that are aiming us down a road where we absolutely have to get our carbon footprint and our energy consumption down much, much more than we already have and so there’s a big, big challenge coming up in the future along those lines. I do think it is – We’ll talk about this, I think, quite a bit this hour, where there is a tendency for people to say I want to do something, I want to make a decision and I want to do something easy, something my neighbors can see. And that might be solar, right?
MCALLISTER: And so I think we struggle a little bit with that. While we run the rebate program at the California Center for Sustainable Energy where I work for the region, we love solar, we train contractors, homeowners, and everybody in between about solar but I think the energy efficiency is often left out.
CAVANAUGH: You know, let me stop you right there because eve – we’re going to talk an awful lot about energy efficiency assessments as we continue our conversation but just to start off, I want to talk about a couple of things that people can do. Maybe people already know about this stuff but for the people out there who don’t, even before you get an energy assessment, what can you – look around your house and make sure that your appliances are a certain way and so forth, what are the real nuts and bolts things people can do?
MCALLISTER: Well, you mentioned lighting, that’s the number one. It’s a no brainer. It’s super cost effective. The paybacks are well under a year. You know, and there’s all sorts of great technology out there, not just compact fluorescents but there are LED technologies, advanced halogens, linear fluorescents for kitchens, which are often installed in newer buildings that are all extremely efficient and will just put the incandescent to shame. The incandescent, you know, hopefully will disappear here in the next ten years or so. But other things, like when you’re replacing an appliance make sure it’s an Energy Star appliance. A front loading washing machine, clothes washer, is – you know, not only saves water, it also saves the energy to heat that water. There are – Those are the easy things. Your HVAC, if you have an old heating, ventilation and air-conditioning unit, or an a/c unit if you’re in El Cajon, say, if that’s old and is relatively inefficient, then it’s going to be a cost effective proposition to replace it. Sealing your ducts, just something as simple as that; much of the energy that we put into our a/c is actually blowing into your crawl space or blowing into your attic and not into the building where you want it. Insulation, there – it’s not that expensive to get blown-in insulation into your walls and most pre-1978 houses do not have any insulation. So we can go beyond that, replacing windows, you know, things like that. Right…
CAVANAUGH: But that would be part of a home energy assessment, wouldn’t it?
CAVANAUGH: That kind of next step.
MCALLISTER: Absolutely. You know, a Jacuzzi, for example, is something not everybody has but where you have it, it’s the biggest energy consumer in your house. So there are much more efficient Jacuzzis now. It sounds like a luxury item but it actually consumes a lot of energy when you sum it up across the state.
CAVANAUGH: And before I get Ted into the conversation, I want to ask you, you mentioned that our region needs to take significant strides to improve our energy efficiency and that’s really sort of not because it’s a good idea but because as a state, we’ve set some policy goals, haven’t we?
MCALLISTER: Absolutely. So the – What’s driving a lot of energy policy and many other policies is Assembly Bill 32. It’s the Global Warming Solutions Act of nineteen – of, I’m sorry, 2006. And it is driving our policy environment to really focus on carbon reductions. And we have to reduce, as a state—this is the goal—our carbon emissions overall by 80% below – to 80% below 1990 levels by 2050, so it’s a long way off but that is about six out of every seven units of carbon that we emit in our various activities, driving around, from our power plants, etcetera, etcetera, needs to go away by 2050. And we actually don’t really have the technology to get all the way there but what we do know is that we absolutely will not get there if we don’t attack our existing building stock. You know, California has been very progressive in its new construction standards but given the economy today, for example, there’s not a whole lot of new construction going on and, in fact, for the foreseeable future, most of the energy consumed in buildings will be in buildings that we already have today, so we have to get into those buildings. There’s just no way around it. And it’s a little bit of a difficult nut to crack because people don’t automatically just out of the blue make a decision to retrofit their home for energy efficiency. They have to be given some incentives, they have to be educated so they want to make that choice. And then on the flip side, there needs to be the contractor community, which Ted is a great member here in San Diego, to be able to provide those services in a way that makes sense and doesn’t disrupt people’s lives. So I think we’re really headed – we’re at the beginning of this pathway that we need to go down forthrightly. There’s going to be a lot of learning along the way.
CAVANAUGH: That’s Andrew McAllister, director of programs at the California Center for Sustainable Energy. And I’d like to bring in Ted Torre-Bueno, president and founder of Empowered Energy Solutions. And a reminder to our listeners, we’re taking your calls at 1-888-895-5727. So what is Empowered Energy Solutions all about, Ted?
TORRE-BUENO: Well, the company was founded to address a various significant gap in the market, which is basically if you own a building under 100,000 square feet, there’s really no provider that will bring all the services necessary to do a comprehensive energy efficiency retrofit in. And the problem is, is that people have kind of focused on solar because it’s a very simple, very clear answer whereas energy efficiency has a lot more components. But since their return on investment in energy efficiency is so much greater, about three to four times that of solar if you’re willing to do those components, and what Empowered was founded to do is bring those components under one roof, you can realize a much stronger investment with a higher rate of return and much better financial returns and also a much sounder environmental benefit. So you have to do an analysis, you have to do a diagnostic, you have to do a construction project, you have to collect all the rebates and incentives, you have to find financing.
TORRE-BUENO: But if you’re willing to do all those things, it returns at a much higher rate.
CAVANAUGH: Now when you talk about components, what is it that you’re talking about. As you assess someone’s home, how do you break that down? That assessment?
TORRE-BUENO: Well, first you have to do a detailed analysis of the building itself to understand its current state, why it’s consuming as much energy, as much water, as much utility as it is. And then you have to come up with a plan to reduce that consumption, preferably a plan which is optimized for that individual client, which is the approach that we take. And then you have to implement that plan and you have to make sure that you can finance it, which involves bringing in loans and lease companies to make it, you know, cost neutral for the buyer because they can’t be paying more on the front end. That’s the problem with solar is that if you take a long enough view, it pays off. But if you, you know, just take the short term view, will this raise my expenses right now, you’re going to experience a net increase in expenses. And the whole idea is to increase the margins for businesses, to put money back into homeowners’ pockets, and by financing it correctly and by doing energy efficiency, that becomes possible. And then you have to actually implement all the work, you have to collect the rebates and incentives. So it’s a complicated process. Our company was, you know, created to make sure that, for the owner, all they have to do is come to us and we can implement it fully. We’re a sole source solution. But before now, no sole source solution really existed, and for that reason I think people gravitated towards simple answers like solar.
CAVANAUGH: Right, exactly, to make one big change and solve every problem that way.
TORRE-BUENO: Well, the problem with solar is…
TORRE-BUENO: …it doesn’t really solve the underlying problems.
CAVANAUGH: Right, exactly.
TORRE-BUENO: It just – The building is uncomfortable, it’s unhealthy, you know, whereas energy efficiency will improve the building intrinsically and make it more valuable, more comfortable, a more healthy building, and you’ll realize all the returns in investment you would from having a good building as opposed to just an efficient building which is – you know, just has a big solar system slapped on it.
CAVANAUGH: It has been my experience in San Diego that our residences and commercial buildings are notoriously badly insulated. Am I correct in that assessment?
TORRE-BUENO: That’s very true. I think it’s a function of the wonderful weather we have…
TORRE-BUENO: …here in San Diego and a lack of appreciation for the importance of insulation. I mean, certainly if you own a building and you actually use your heating, ventilation and air-conditioning system and you don’t have insulation in your roof, or in your attic, I should say, that is the – one of the absolute cheapest, fastest, easiest things that you can do to realize a very significant reduction in your energy bill. And another thing that I think would return big dividends for a lot of, you know, companies and individuals in San Diego is just routine maintenance. You know, we maintain our cars because we have to but we tend to neglect our buildings because they don’t break down in ways that are as visible as our automobiles.
CAVANAUGH: Let’s take a couple of calls. We’re encouraging our listeners to join the conversation. We’re talking about home energy efficiency and actually energy efficiency assessments for residential and commercial buildings. The number is 1-888-895-5727. Let’s speak with Matt in Ocean Beach. Good morning, Matt. Welcome to These Days.
MATT (Caller, Ocean Beach): Good morning. Thank you for taking my call.
CAVANAUGH: You’re welcome.
MATT: Well, I’m – I was just listening to you guys and you were talking about how – ways to reduce energy consumption through, you know, improving efficiency. One thing that we do at my house is basically one day a month we have a dark day and it’s usually like on a Saturday or something and we do our best to not run any electrical appliances aside from like the refrigerator and those things that kind of have to go. And, you know, it’s a really good time. We have a blast doing it. We play a lot of music, play a lot of board games, even read books, and do everything by candlelight.
MATT: So it’s a lot of fun and we end up saving a lot of energy.
CAVANAUGH: Well, thank you for that, Matt. The dark days get darker as the year gets older, though. Thank you so much for that. Let’s speak with Ed in Lakeside. Good morning, Ed, and welcome to These Days.
ED (Caller, Lakeside): Good morning. I’d like to relate my experience. I happen to be an octogenarian. I am having trouble reading my bills, electric bills, and I needed a little help. And then suddenly appeared a group – I received a visit and they told me they were going to evaluate the condition of the apartment. And so they went through the place, they changed all the bulbs. I don’t – The reason I’m mentioning this is, I never really called back. It’s something to do with SDG&E and a volunteer group. And the biggest thing was that my bill for the electricity was running a bit over $50.00 a month. I’m a single person.
ED: And they removed the refrigerator and I think everything else has remained the same. I live exactly the same. The electric bill fell from just over $50.00 down to just over $20.00, and I was amazed because I still use my television the same and everything else. Now they did a total evaluation of the home.
ED: And I mentioned they put things in the light sockets where from the outside there can be some leakage. They also offered to change the front door on the building if it didn’t – it was a sort of marginal thing, it wasn’t that bad. But going through the house like that, I was just totally surprised. And then about – within the year, probably about nine months later or so, they came back, asked if they could come in and checked out, they did, and they took all this data. They also checked the water system, the showerhead, and a couple of things like that. Now for that to have happened, I think is miraculous.
CAVANAUGH: Okay. Well, Ed, thank you so much for that call. It just goes to show what can happen when you do make some changes. Now, I’m wondering, Andrew, do you know about a service or an agency that would actually do that for Ed?
MCALLISTER: Well, so I don’t know exactly who visited Ed’s house, obviously.
MCALLISTER: But that’s a great set of points. He brings up, really, all the big stuff. SDG&E has a program called the Low Income Energy Efficiency Program, and that may have been who went to visit his house, I don’t know that for sure. They also actually, by the way, offer low income electricity rates. So you can get access to cheaper power if you are signed up for the CARE program. There are requirements for that, and it’s not an insignificant percentage of their users, I think, who are on that. But the Low Income Energy Efficiency Program does exactly the things that Ed mentioned. You know, you can save water and energy to heat that water when you replace your showerhead with a low flow showerhead. The refrigerator’s probably the biggest single consumer in his house unless he has some ridiculous large TV, which I doubt. And lighting is number one. It sounds like they also sealed his building in some way by fixing some of the cracks and filling some of the cracks around maybe the recessed cans in his lighting fixtures if he has any of those, things like that, making the building shell more integral. So…
CAVANAUGH: And I wonder, Ted, could you give us an example of a job that your company did that improved the client’s energy efficiency and saved them some money?
TORRE-BUENO: Well, yes. Generally, we try to make sure that our clients experience an immediate reduction in their net expenses every month, and we try to make sure that that investment pays off in under five years. So a typical example would be the case of an artist who came to us. She’d already priced solar systems and she’d found that they were simply beyond her means. There was no way for her to secure financing because the investment paid off over a very long, you know, scope of time. And we came in and what we found was that for energy efficiency improvements that were less than a quarter of the cost of the proposed solar systems, we could reduce her consumption by about 45%. And then we installed a much smaller solar system than had originally been proposed, and this investment paid off in just under four years. And it was – it cost her literally nothing out of pocket. The loans were securitized by the equipment itself and by the promise of various urban agencies to repay rebates and incentives. So right off the bat, her expenses decreased every month and she experienced an investment that was worth, you know, about a 25% return investment which was tax free and it was inflation adjusted. And that’s the very sort of most basic thing that we try to do.
CAVANAUGH: And I just want to ask you a question because I know that your company is also very active in trying to find out all the rebates and incentives out there so that people can utilize them. That seems to be a very complicated endeavor. It’s rather hard for, you know, just the average person to try to find out all this information, isn’t it?
TORRE-BUENO: Yes, it is very difficult. I think it represents a lot of good will on the part of companies and, you know, local and federal government but at the same time it means that the environment of rebate and incentives is complicated and continuously changing. And in order to keep track of that, I mean, we have to have a full time research department that does that and product research and other research associated with our industry. For an individual to do that kind of research, by the time they’ve invested the time, whether they’re a building manager or whether they’re a homeowner, they’re not going to experience a significant return in investment unless they value their time, you know, at a very low level. Whereas for us, since it’s something that we’re doing all day every day, we are able to realize, you know, efficiencies and economies of scale and we have a comprehensive understanding of what the current rebate incentive situation is.
CAVANAUGH: And, yes, Andrew.
MCALLISTER: Yeah, I think as we move towards talking about the future and where we really need to go, I think it’s very key, I mean, to build on Ted’s point that we have to streamline the process. And municipal governments are getting involved in helping us, the state government definitely, the federal government, they’re all sort of throwing some, largely, stimulus money at this point onto this but there are a number of innovative programs. I think we’ll talk about some of those later on in the hour, but there needs to be a more streamlined process for getting people comfortable. There needs to be some demand pull for this. People on a much more mass scale need to see the benefit and be asking for this service and then there’ll be more Empowered Energy Solutions and more firms that are actually bringing this service to the marketplace and then we’ll have a more robust marketplace. So we’re on the – it’s all very nascent. We’re on the front end of that. But it is happening, and so I’m very encouraged. I think we’re really going to start – You know, the state has a thing called the loading order, right? The Energy Action Plan was adopted in 2003 and energy efficiency is number one on the loading order. It is the first resource that our state has committed to find before any other resource, including renewable generation or fossil generation, which is now at the bottom of the list. So if we’re going to respect the loading order, we need to make this work. And, you know, there’s no reason why it shouldn’t. It costs four to five cents to save a kilowatt hour of energy and it costs, with a solar system for example, it costs fifteen to twenty cents to generate it. Now people in the top tiers, people who use a lot of energy, a lot of electricity and they’re in the top tier of their electricity bill, they’ll get it and they’ll say, oh, my goodness, you know, the top tier’s costing me thirty cents. Well, actually solar then becomes cost effective because you’re generating for fifteen or twenty and you’re offsetting a thirty cent kilowatt hour. Well, it would be even more cost effective if you offset that with a four cent energy savings and just didn’t consume that energy at all. And so I think that meth – that value proposition is what we really have to work to simplify, streamline and get out there in the public.
CAVANAUGH: Right. Let’s take another call. Joseph is calling from Clairemont. Good morning, Joseph. Welcome to These Days.
JOSEPH (Caller, Clairemont): Good morning. Thanks for taking my call. I just wanted to share, I think, a really great program that’s out there. My wife and I are just buying for the first time, and through the FHA loan program you can do what’s called an energy efficiency mortgage, and this is financed from the beginning and what it allows you to do is borrow money from the beginning that’s added onto your original loan. You don’t have to pre-qualify for that amount. And the way the amount is figured that you’re allowed to use is through a HERS Rater, a professional comes to your house and does an audit of your house and they figure out the dollar amount that you’re allowed to borrow from the bank and you put that, for example, replacing windows, replacing old heater, insulation. All that money will come out of your pocket when you buy the house but that amount is held back by the bank and they reimburse you then and that – you need to do that within the first three months after buying your home and, I mean, what a great program. It’s basically, you know, I’m considering it instant equity once we get all that done. Added to the fact that the market’s, you know, rising in our neighborhood I think it’s a really, really great way to go for people that are buying for the first time.
CAVANAUGH: Joseph, does that become part of the mortgage then, that payment?
JOSEPH: Yes, it does. It’s figured in on the very beginning of the mortgage because you’ve already basically borrowed the money even though it hasn’t been spent yet. And, for example, if you don’t use all that money for some reason, the money that isn’t used will just get put against the loan and it’ll pay down the principle. Let’s say you’ve – there’s an extra $1500.00 left…
JOSEPH: …that’ll just pay down the principle and the rest comes back to you to cover those things and you’ve got – you know, you’re well on your way from the very beginning.
CAVANAUGH: Joseph, thank you so much for adding that. And, Andrew, you’ve been shaking your head; you know about this program.
MCALLISTER: I’ve been nodding my head vigorously. The FHA program is great and it’s definitely illustrative of the fact that you can have a cash flow positive investment in energy efficiency from day one, and that’s the whole point. So your mortgage is slightly bigger because you’ve made this investment in energy efficiency but your energy bills are even more lower so that your off – your net is a positive rate of return for yourself. It’s actually – You’re positive from day one. So this – I’ll use the caller’s comments to make a couple of points, actually. The point of sale, when a house turns over, when it’s sold, that’s a key moment where you can get into it and where policy can sort of make something happen with that house, whether it’s through the permitting desk if you’re doing a project or just at the – as a condition of title transfer, something like that. And the moment when you’re getting a mortgage is really a key part of that process and so that’s a really interesting place that policymakers are looking to make things happen. The caller also mentioned the HERS Rater and that is a standard, the Home Energy Rating System, that is becoming more and more common. There are a few dozen HERS Raters in the region right now. You can go to our website, energycenter.org, and look in our vendor database and you’ll find many of them there. You can do a search on HERS and you should come up with several, with a bunch. And that’s the standard by which we can compare apples to apples, one house to another. It sort of provides you with your miles per gallon rating on your house. So that’s one way to do it. There’s a few others, green point rated, but they’re roughly similar and HERS seems to be the one that is getting the most traction and is taking the marketplace. So I think they’re – as I say, the system is starting to work itself out through the marketplace and there’s a lot of interesting activity going on that people can rely on and they’re going to provide, you know, very high quality service.
CAVANAUGH: Well, right now we have to take a short break and when we return, we’ll welcome another guest to the conversation and take your calls on home energy assessments and a brand new program that’s starting next year in the City of San Diego, a solar rebate program. Our number here is 1-888-895-5727, and we will return in just a few minutes. You’re listening to These Days on KPBS.
CAVANAUGH: 24.50 Welcome back. I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. We’re talking about energy efficiency, both big and small changes you can make in your home to reduce carbon emissions and eventually save money. And we’re taking your questions and comments at 1-888-895-5727, that’s 1-888-895-KPBS. I’d like to welcome back my guests. Andrew McAllister is director of programs at the California Center for Sustainable Energy, and the California Center for Sustainable Energy is an underwriter of KPBS. Ted Torre-Bueno is president and founder of Empowered Energy Solutions. And we have a new guest joining us from the City of San Diego, Rachel Laing. Rachel, welcome.
RACHEL LAING (City of San Diego): Thank you. Nice to be here.
CAVANAUGH: Now you’re here to tell us about a new program that’s about to start early next year, and it’s called the Solar Homes Rebate Program. So what is that about?
LAING: Well, this – it’s actually called the San Diego Clean Enterprise Program.
CAVANAUGH: Oh, okay.
LAING: I think the Solar Homes Rebate is CCSE’s program. But in any event, this program is about – it allows property owners to finance energy efficiency and renewable energy improvements to their homes through loans that will be repaid as an item on their property tax. So if you belong to an HOA, it’s similar to that type of assessment that you pay on your property tax. You pay – the loans would be paid back over 20 years, they’d be very low interest through our financing partner. And the great thing about it is that the obligation to pay back the loan transfers from owner to owner. So that’s a big barrier for a lot of people to take on solar is that they’re concerned that what if I want to leave in five years? I haven’t gotten the payback from those panels. And then I have this – I’ve either invested the $20,000 or I’m still going to be paying it back if I financed it. That obligation will transfer to the new owner, so the new owner will come in knowing I’m getting the solar and I’ll be paying for it but it will be offset by some of the energy efficiency improvements. You know, their utility bill will be offset, so their utility costs are offset, so it’s a worthwhile investment for them.
CAVANAUGH: Right. Now, let’s break this down a little bit. So you’re interested in putting solar panels on your home in the City of San Diego.
CAVANAUGH: And you contact the city and say I want to put on solar panels. What happens then?
LAING: Well, here’s kind of how it works. First, you apply – well, you’ll be applying through CCSE, they’re actually going to be the administer (sic) of the program.
CAVANAUGH: The Center for Sustainable Energy.
LAING: They’re going to be the administrator. So what you’ll do is, you’ll apply through them then you’ll go through and you’ll have the installer of your choice. You’ll install your – the system. The installer will probably bill CCSE directly. You’ll still get all your rebates, all your tax credits that you would already get, and you’ll just finance the difference. You’ll also probably do some energy efficiency up front. So before installing any solar panels, you want to have your home be as efficient as possible so that means you install a smaller system, you have – you’re using less energy. So it’s just a wise investment to first put energy efficiency – So what we’ll do is we’ll send an auditor – I mean, this is the program design that we’re intending but it still has to go through the process, meet with stakeholders. The city council will have some input. So there – the program’s still in design, so let me just put that caveat out there…
LAING: …first. But the idea of it is that you’ll have an energy efficiency audit, you’ll – you’ll have your energy efficiency audit, you’ll make some energy efficiency improvements. Those also can be financed. And we’re going to try and find some rebates through the federal stimulus Energy Efficiency Block Grant Program, various rebates to help offset the cost of those. Then you’ll – you can finance the difference on this or pay for them up front. So first you get your energy efficiency and then you’ll determine what solar – size solar panels you’ll need, and then you’ll install them and be able to pay for them through this program.
CAVANAUGH: Now with the caveat that this is not actually a done deal yet. The city council really has to put the final okay on it.
CAVANAUGH: But the idea is that this is going to start early next year and…
CAVANAUGH: …and am I getting the idea correctly, Andrew, that it is possible that if you go through all these steps that people who want to make significant changes to their homes if they’re given the okay, could be able to do it without putting up any up-front money?
MCALLISTER: Yes. Well, there will be a little bit. There’s going to be an application fee, you know, in order to – This is not a personal loan, right? So it’s a different set of due diligence that has to be done but there is some up-front work that needs to be done to sort of qualify that property. You know, they can’t be delinquent on their mortgage, things like that we really have to check on. And I will – Let me just say, actually CCSE’s not the main – the only administrator. This is a team and, you know, with a financing partner and…
MCALLISTER: …you know, I don’t want to claim credit for this program…
MCALLISTER: …because that’s definitely been a very interesting process with the city and I think shows a lot of vision on the mayor’s office’s part and the city council’s part because it is – It’s a model that has been tried in some smaller cities around the state and actually around the nation now but, really, not a city on the scale of San Diego and so it’s a great thing, really, because it’s going to bring a lot of capital to the space that we’ve been talking about in the program up until now, which is how to get into existing buildings to do these core retrofits that need to be done. And the numbers that we have to hit are huge. So, yeah, there will be a – some kind of an application fee on the order of a few hundred dollars probably.
MCALLISTER: Then there will be some, I believe, required energy efficiency. I mean, it really just makes sense to do basic energy efficiency. If you’ve got a, you know, a dog of an a/c unit, you need to replace that a/c unit, for example. The HERS Rater will let you know what the priorities are, where the biggest bang for the buck is. So with that knowledge, you can then construct a retrofit for your building that makes the most sense and bring the appropriate amount of financing and right size your solar system if you want to go down that route and do solar, you know, along with or after your energy efficiency. So, really, the messaging for this program, I think, is going to be really key because we’re going to be encouraging people to do the right thing and to get the most bang for their buck and we’re also going to make it – we’re going to arrange it so that, you know, each person can, if they want to, now they don’t have to but if they want to, they can really optimize their building and do a suite of retrofits and measures that is the most cost effective line.
MCALLISTER: If somebody wants solar, they – they may just be able to get solar but I think the messaging really is going to encourage them to do a more integrated approach than that.
LAING: And there’s…
CAVANAUGH: Yeah, go ahead.
LAING: There’s a lot of savings in doing the energy efficiency first. Your solar system is going to be significantly less expensive if you already do the energy efficiency and you need – and you have less energy use.
CAVANAUGH: Let me ask you, I want to take some calls because there are a lot of people who want to talk to us but where is this money coming from to allow this program to exist?
LAING: Okay, that’s the interesting part. We – The CCSE’s partner is called Renewable Funding, and they’ve also been used by Berkeley in their program and they will package all of these loans into about – every so million – about a million dollars. They’ll go and sell them as taxable bonds. So – And all of the costs are rolled into it, so the consumer pays for the financing cost but it actually is pretty low. Our first tranche of loans will probably go out around 6.8% which is, you know, less than your typical home equity loan right now, and it’s got all the costs rolled into it.
CAVANAUGH: I understand.
LAING: So it’s cost neutral for the city.
CAVANAUGH: Very exciting. Let’s take some calls. We’re taking your calls, by the way, at 1-888-895-5727. Let’s speak with Tricia in Chula Vista. Good morning, Tricia. Welcome to These Days.
TRICIA (Caller, Chula Vista): Good morning, Maureen. I was calling because there – the call you had earlier from the nice gentleman, the octogenarian, as he called himself.
TRICIA: We – The organization I work for MAC Project, here in Chula Vista, and we also – we service different areas throughout San Diego, we actually provide those services through funding through SDG&E, through the Department of Labor, through some community organizations. We get funding and what we do is we send a team out to assess those homes and then we do the different weatherization that might need to be done. We replace refrigerators. We just basically make their homes more efficient, which in turn brings down their energy bill so that they can then have more funds to spend on the necessities they might need. But you do have to qualify for this program. You need to be low income, on a – somebody with disabilities might qualify, so there’s different qualifiers but I’d be happy to give the number if there are people listening…
CAVANAUGH: Please do.
TRICIA: …that might feel that they qualify. The number is area code 619, 426-3595. Again, that’s 619-426-3595, and they want to ask about the Healthy Homes and Weatherization Program. And…
CAVANAUGH: And they can find out if they qualify.
TRICIA: Exactly. They’ll need to go through a questionnaire. They’ll need to have proof of income. They’ll need to have their last SDG&E bill. But the representative who they’ll speak with will go through that questionnaire with them to find out if they do qualify. But it’s a great service for families and individuals in need because a lot of times they don’t have the funds to do the weatherization that you’re talking about.
CAVANAUGH: Well, thank you so much, Tricia. Thanks for that. And, Andrew, you wanted to add something.
MCALLISTER: Yeah, I just wanted to give a call out to MAC Project and Campesinos Unidos, which is another of the providers for those programs and the Department of Community Services and Development funds quite a bit of that along with SDG&E, and they do slightly different programs but they – the MAC Project and the other providers actually do a great job of integrating all those services so that’s a great resource for the region.
CAVANAUGH: I don’t want to leave this topic before asking you, Ted, how much, if you don’t qualify for any of these free or reduced price services, how much does it cost to get a home energy assessment?
TORRE-BUENO: Well, in the market in general, getting a home energy assessment can cost between $200 to $1000 at residential level and, you know, thousands of dollars to tens of thousands of dollars at the commercial level. One thing that we’ve done is combined those costs into the cost of the larger retrofit work and the solar installation so, you know, for qualified customers, we do it for free up front because the whole thrust of what we do is to make sure that people aren’t paying more out every month, even initially, than they already were. We feel that reducing people’s expenses from the get-go is critical and, therefore, we do these services for free.
CAVANAUGH: Got it. Okay. Let’s take another call. Scott is calling from Mission Viejo. Good morning, Scott, and welcome to These Days.
SCOTT (Caller, Mission Viejo): Good morning. I am a solar provider. I work with McKeena (sp) Solar and there’s a couple of things I wanted to comment on. One that the best thing that people can do is quit using energy, and that means paying attention to what your mom told you to turn off the lights. And the other thing, I agree that, you know, there’s a priority of things that have a payback but I wanted to (audio dropout) which includes energy efficiency for your home in doing the surveys. But right now there are products that solar providers have that can help homeowners also get financing so that their up-front investment can be like $1000 and then they’ll simply pay for panels that are on their roof and paid for by somebody else. That’s called a Power Purchase agreement. So those things are available now. There is no one answer for our problems. The final point I wanted to make is that one thing that (audio dropout) does that’s important is it provides power to the utility grid at the time when the utility grid needs it most, in the middle of the day. That’s the end of my comments for now.
SCOTT: Thank you for having your show.
CAVANAUGH: Well, thank you so much, Scott, for calling in. And, again, you were nodding, Andrew. You know about the kind of programs that Scott was talking about.
MCALLISTER: Yeah, there are some wonderful, you know, in no way does this program meant to disparage the solar industry. I don’t think Scott was saying that.
MCALLISTER: But, you know, there is no silver bullet, right? It’s silver buckshot, as we like to say. So there’s – Really nothing can be taken off the table as we try to move towards a clean energy future and transition towards a clean energy economy, more broadly. And he’s absolutely right. You want to do everything you can do, and it’s just, you know, using a rationalize – a rational approach to getting the job done. There are solar providers that have lots of different products, leasing and Power Purchase agreements and, you know, different ways to get solar onto roofs and utilities are actually evolving those kinds of things, too, providing them as part of the utility bundle of services. So there’s a lot of interesting thinking going on and, you know, I think – and he’s absolutely right about the time of delivery issue. You know, power is worth more in the middle of a summer day when everybody’s got their a/c on. And, in fact, the utilities now are going to be paying for excess power that people generate because of a bill AB-920 that the governor just signed into law the other day. So there – On the solar front, there’s a lot of interesting stuff happening as well. I think where we’re further behind the curve is energy efficiency and that’s why this show that we’re doing right now is so…
CAVANAUGH: Because, Rachel, I wanted to ask you about this solar program that you’ve been talking about the city is hoping to implement in the – early next year.
CAVANAUGH: Early 2010. I’m wondering, as you’ve been thinking this through, do you expect a – how much response do you expect from this program? And how much outreach are you going to be doing on it? In other words, how are people going to know about it?
LAING: Sure. Sure. Well, we’ve been doing a huge amount of outreach. We’ve – Obviously, we announced it when we first came up with the program and said it was going to be happening but obviously it takes about a year to go through the process of the RFQ, the RFP, program design, meeting with stakeholders, but at the end of the month, we’ll be going to the Natural Resource and Culture Committee at city council on October 28th. That’ll give the council an opportunity to have input into the program. It’ll also have the public an opportunity to come down to council and make some comments there and talk about what’s important to them. Then from there, we’re going to design the program and take that program out to the community. So we’ll hold community meetings, probably at least one in every council district. We’ll talk about the program. We’ll let people know how they can apply, when they’ll be able to apply, and do it that way. So there will be that, there will also be a city website. CCSE will host a website, I believe, and so we’ll have a number of avenues to – for outreach. And, I mean, judging by the response that we’ve already had, people contacting the mayor’s office saying how do I get – how do I get on the list? There’s not a waiting list but there is an interest list right now, which means that you get on this list and so you’ll get information updates on the program and where it is.
CAVANAUGH: You’ve got to give out the list. Where do people find it?
LAING: It’s Stephen Lew, who’s our outreach director, is the keeper of the list. And his e-mail is email@example.com. And you can just e-mail him and say I want to be on the solar program interest list, the clean generation interest list, and he’ll make sure that you get the information updates as they come.
CAVANAUGH: Terrific. Now I want to ask Ted and Andrew, you know, we’ve been speaking a great deal about either commercial buildings or single family homes. I’m wondering – Ted, I want to direct this towards you. How – When people live in condominium complexes and things of that nature, how do they arrange for an assessment? Does it make any sense for a single condo to do an assessment or should the whole unit, if it’s an attached structure, should that be included in the assessment?
TORRE-BUENO: I think both of those things make sense. I think that if you haven’t taken all the energy efficiency measures you can, you’re basically just throwing cash out the window. And, therefore, you know, no matter basically what it costs, whatever service you use, whether you qualify for low income or whether you have to pay for it, whether you use a company like ours that’ll do those services for free, if you haven’t done every energy efficiency measure you can, you stand to realize savings in the first year alone. I think it makes, in a sense, more sense for buildings to do this as a total building operation but, you know, there are circumstances under which the building owner won’t do it. However, if you live in an apartment, if you live in a condo, you’ll absolutely save money by moving forward with energy efficiency.
CAVANAUGH: And, Rachel, is there any provision in this clean energy idea with the solar panels…
CAVANAUGH: …for multiple unit dwellings?
LAING: At this point, no. Well, multi-family if the owner wants to do it…
LAING: …that’s one thing. But it won’t be for renters at this point. No, it’ll have to be the owners that apply for it.
MCALLISTER: The property tax. Since the vehicle for repayment is the property tax…
LAING: There’s that…
MCALLISTER: …it does have to be the owner that makes the decision in all cases, whether it’s multi-family, single family, or a business. So…
CAVANAUGH: I see. Okay. But you can’t just get solar panels put on one condo unit, can you?
MCALLISTER: Well, that – that…
LAING: If it reaches the sun.
MCALLISTER: Yeah, I mean, the – each, you know, situation – ownership situation and then all that…
CAVANAUGH: Right, right.
MCALLISTER: I mean, HOAs are notoriously, you know, kind of variable, let’s say, in their ability to allow their members to get solar or, you know, do work on their units but, you know, we’ll work with people as they – as these different issues come up and work through them. I think, you know, there’s incredible amount of excitement about this program. I think San Diego has done a great job at offering – developing a program – initial program design that is going to have a lot of traction. It’s definitely the cheapest financing of any program in the state that I know of and, you know, and we’re really excited to work with the city and the other partners on making this happen because I think it’s going to be a game changer.
CAVANAUGH: Let’s take another call. John is calling from Clairemont. Good morning, John, and welcome to These Days. Hi, John. Are you there? Okay, let’s move on and take another call. And Lance is calling from Carlsbad. Good morning, Lance. I’m sorry. David is calling in San Diego. Hi, David.
DAVID (Caller, San Diego ): Hi. How are you?
CAVANAUGH: Yes, how can we help you?
DAVID: Well, my question was more general with regards to the idea of being able to sell your energy back, your excess energy back to the utility. And I don’t have any direct experience with installing solar on my home, however the two people or the two families that I know that have taken the step to do so were under the understanding that they would be able to sell their excess energy back to SDG&E. Through all of the different things they’ve tried, they have been unsuccessful in doing so and I don’t know if the bill that was mentioned might change things but I know that that’s an understanding that a lot of people assume, you know, and I was wondering what the comment or situation is with regard to that?
CAVANAUGH: Thank you. Thank you for that question. Ted.
TORRE-BUENO: Yeah, so the – California has what’s called California Net Energy Metering and what that allows you to do is when you’re – when nobody’s home and the sun’s out, you inject your excess energy into the grid. When you get home and turn on your lights, start using your TV or whatever you do, you pull energy out of the grid. And at the end of the year, essentially, the utility sees whether you have excess consumption or excess generation. If you have excess generation, up to now the utility is not required to buy that. That’s just a fact. And there are good reasons for that. I don’t want to get into policy because this is a show about energy efficiency but the bill that – Jared Huffman introduced the bill and it is now law, AB-920, that will look at that excess generation and some rate to be determined by the Public Utility Commission, the utility will pay you for that excess energy, so that is happening and that will change, as you say.
CAVANAUGH: You know, Rachel, I’m wondering, the plan about the solar program sounds really exciting and a lot of people I know are interested in it. I wonder, what is the benefit to the City of San Diego, though, to have people live in more energy efficient housing and to perhaps to be generating some of that – their own energy through solar panels on their homes?
LAING: Sure. Initially, this was conceived of as a – mostly as an economic development prospect so you’re increasing the number – the amount of solar being used, you’re benefiting the solar industry. We have solar manufacturers in Otay Mesa. We have loads of solar installers and solar companies installing panels from elsewhere. So it’s an economic benefit. It helps create jobs for anybody who’s, you know, it’s construction jobs, it’s sales jobs, it’s manufacturing jobs. So it’s – for us, it’s a tax – it’s going to increase our tax base and it’s revenue. I mean, it’s cost mutual for the city because our financing partner provides all the up-front costs and collects the costs in their financing.
CAVANAUGH: And – Go ahead, Andrew. I’m sorry.
MCALLISTER: Yeah, I just want to reiterate and build on Rachel’s point. I mean, from an economic development perspective, you know, San Diego’s well on its way to becoming a clean tech hub, clean energy is definitely growing sector here. We’re in a great position because of all the solar resource that we have. We’re right next to the Mexican border where there’s a lot of maquiladoras down there and they contribute to this industry as well, so as a region, we’re in a really good position. When you move towards energy efficiency, it actually – that just becomes more so, you know, you can’t export that job because it’s in your house, right? So somebody who comes into your house to do energy efficiency, the labor component of that project is actually more than it is for solar. So the multiplier factor, when you start really moving towards energy efficiency, at least has the potential to be enormous and so it could create even more jobs than solar alone and could really get the ball rolling in that direction. So I think that’s a very key component, I think, of these programs as they emerge throughout the state including here in San Diego.
LAING: And we know that there’s going to be at least $60 million spent in this program. That’s our starting number. So that means $60 million is going to local businesses through this program at no cost to the city.
TORRE-BUENO: And I think another very critical component of energy efficiency is that it puts money back into the pockets of local residents…
TORRE-BUENO: …and local businesses. And that money will largely be spent locally.
CAVANAUGH: There you go. Win-win.
CAVANAUGH: We have amazingly run out of time. I want to thank my guests so much. Andrew McAllister, director of programs at the California Center for Sustainable Energy. Ted Torre-Bueno, president and founder of Empowered Energy Solutions. And from the City of San Diego, Rachel Laing. Thank you all for being here and speaking with us today.
MCALLISTER: It’s been a pleasure, Maureen.
LAING: Thanks so much.
TORRE-BUENO: Thank you very much.
CAVANAUGH: Stay with us for hour two on These Days. And if you’d like to comment about anything you heard on this segment, go to KPBS.org/TheseDays. We’ll be back in just a few minutes.
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