BGE Conservation Program Offerings and Incentives ENERGY STAR® Products The ENERGY STAR Products program will continue to leverage the EPA/DOE national ENERGY STAR campaign by offering incentives on select ENERGY STAR qualified lighting products, room air conditioners, refrigerators/freezers, dehumidifiers, dishwashers and clothes washers. Incentives may be made available year round, during limited promotional periods and/or to coincide with national promotion periods timed with EPA/DOE significant events (e.g. Change A Light, Spring into Action, Cool Your World, etc.). In addition, the program will be utilized to promote the purchase and installation of ENERGY STAR Windows. The program will sponsor dedicated window training classes to manufacturer representatives, dealers and contractors. The program will look to partner with agencies like the Department of Energy (“DOE”) and the Northeast Efficiency Partnership (“NEEP”) in order to apply for and potentially receive matching grants in order to leverage funds to assist in reducing the costs to the program. Incentives for ENERGY STAR qualified lighting products The program will provide incentives to manufacturers and/or retailers to mark down the retail price of various lighting products. These incentives will be provided for targeted products (up to a mutually negotiated volume) sold from the participating retail stores within BGE’s service territory during the time of the promotion. Incentives will vary by type of product, and based on negotiations with manufacturers and/or retailers. In general, incentives will follow those established within BGE’s Fast Track Program as outlined in the table below: Table: Lighting Incentives Lighting Product Incentive Available $ 1.50 off retail price (single bulb) ENERGY STAR CFL’s $ 3.00 off retail price (multi pack) ENERGY STAR Lighting Fixtures Up to $ 15 off retail price (hard-wired indoor/outdoor fixtures, portable lamps/torchieres) The incentive values derived and represented within the table above are consistent with other programs offered throughout the marketplace. For example, New Jersey’s Clean Energy Program provides incentives for single pack standard CFL’s at $ 1.50 off. Similarly, the Northeast ENERGY STAR Lighting Initiative Negotiated Cooperative Promotion which includes Connecticut Light & Power, The United Illuminating Company, Cape Light Compact, National Grid, NSTAR Electric, Unitil, Western Massachusetts Electric Company, and Efficiency Vermont offer single pack, standard CFL price reductions within the range of $1.40 – $1.60 depending on lumen output. The program will also offer an array of lighting products available for purchase through an on-line, web based store. Incentives for ENERGY STAR qualified Appliances In 2008, the incentive for ENERGY STAR Appliances will follow the rebate schedule as found in the following table: 1 Table: Appliance Incentives Appliance Incentive Available ENERGY STAR Refrigerator/Freezer $ 50 per appliance ENERGY STAR Compact Refrigerator $ 15 per appliance ENERGY STAR Clothes Washer Tier 1 (MEF up to and including 2.0) $ 50 per appliance ENERGY STAR Clothes Washer Tier 2 (MEF exceeding 2.0) $ 75 per appliance ENERGY STAR Dishwasher $ 25 per appliance ENERGY STAR Dehumidifier $ 15 per appliance ENERGY STAR Room Air Conditioner $ 25 per appliance 2nd Refrigerator/Freezer Turn In Convection Ovens $ 50 per appliance turn in $ 50 per appliance The incentive values derived and represented within the table above are consistent with other utility incentive programs offered throughout the marketplace. For example, Efficiency Vermont currently offers $40 off ENERGY STAR refrigerators (BGE started with the $50 rebate in the fast-track program and, to avoid customer confusion, will continue at this level for a few years), $25 off ENERGY STAR room air conditioners, $50 off Tier 1 ENERGY STAR clothes washers, and up to $25 on dehumidifiers. Southern California Edison is currently offering rebates up to $50 for the turn in of 2nd refrigerators/freezers. Furthermore, many utilities including the municipality utilities of Hercules, Buffalo and Longmont (New York) are offering rebates of up to $50 on ENERGY STAR dishwashers. Incentives for the On Line Store As previously mentioned above, the program will provide a web – based, online store whereby consumers can view, become educated on and then purchase ENERGY STAR and/or other related energy savings devices/materials including Compact Fluorescent Lamps (“CFL’s”), lighting fixtures, water heater blankets, heating system pipe wrap, etc. Products that have associated rebates will be discounted at the shopping cart level. Additional products offered by the store and potentially eligible for a rebate will include water reducing faucet aerators, low flow showerheads, occupancy controlled power strips, LED holiday lights and LED night lights. Residential Gas and Electric HVAC Program The program promotes the purchase of gas heating equipment that meets or exceeds the ENERGY STAR efficiency standard (i.e., minimum AFUE of 90% for furnaces and 85% for boilers). The program also promotes the purchase and installation of designated heating & cooling equipment under two efficiency tiers for central air conditioners and air/ground source heat pumps: Tier 1: SEER 14, EER 12 and (in the case of air source heat pumps) HSPF 8.5 Tier 2: SEER 15, EER 12.5 and (in the case of air source heat pumps) HSPF 8.5 Ground source heat pumps with closed loop: EER of 14.1 2 Ground source heat pumps with open loop: EER of 16.2 For cooling, rebates will be made available for either qualifying equipment, proper installation or both. The program will create a strong preference on providing incentives for the proper installation of these systems as opposed to simply providing incentives solely on equipment efficiency. The recent increase in the minimal federal standards efficiency that manufacturers must now adhere to significantly reduce the amount of savings that can be gained from installing an ENERGY STAR unit as compared to that of a standard unit. However, evolving studies are showing that a great deal of a system’s efficiency is based upon proper sizing, charge and designed air flow – areas to be rewarded by this program under the apportioned Quality Installation Verification (“QIV”) rebate. For a cooling equipment rebate under Tier 1 and Tier 2 above, documentation of proper sizing through the Air Conditioner Contractor Association’s national recognized cooling load calculation (known as Manual J) shall be submitted with each application. For an installation rebate, documentation of proper installation verified through QIV will be required. QIV will in effect validate proper system charging, and that airflow is within the range recommended by manufacturers. For gas water heaters, rebates will be available for those installed with an Energy Factor of at least 0.8. Incentives for high efficiency central air conditioners, air source heat pumps, ground source heat pumps and gas fired furnaces, boilers, and water heaters for 2008 are displayed in the following tables: Table 1: Central A/C and Air Source Heat Pump Rebates Minimum Efficiency Standards Rebate Level* SEER EER HSPF Central A/C Heat Pumps 14.00 12.00 8.50 $100/$200 $150/$200 15.00 12.50 8.50 $200/$200 $250/$200 * Denotes equipment/QIV rebate allocation. This means, for example, that a customer can get a rebate totaling $300 ($100 equipment + $200 installation) for a Tier 1 central air conditioner provided that the equipment’s efficiency meets the minimum efficiency standards and that they have had their contractor perform a quality installation as verified by the program. Table 2: Ground Source Heat Pump Rebate Minimum Efficiency Rebate Level Closed Loop 14.1 EER $500 per ton* Open Loop 16.2 EER $500 per ton* System Type * Typical sizes for this equipment is between 3 to 5 tons Table 3: Gas Equipment Rebates Equipment Furnace Minimum Efficiency Rebate Level 92% AFUE or greater $300 3 Furnace with Electronically Commutated Motor (ECM) or equivalent Boiler Water Heater 92% AFUE or greater $400 85% AFUE or greater $300 0.8 Energy Factor or greater $50 Table 4: Ancillary Rebates Equipment HVAC Tune Up – Diagnostics & Repair Ductwork Sealing Rebate Level Up to $ 125 per unit Up to $ 250 per system The rebates listed above are consistent with programs that are offered throughout the industry. For example, the certain utilities in New England now offer rebates for both system efficiency and quality installation. Cool Smart, a consortium of several Massachusetts utilities offer system rebates for central air conditioners at $300 depending on efficiency levels. In addition, rebates are offered for proper sizing at the rate of $150 per downsized ton. Arizona Public Service offers central air conditioner rebates between $300 - $400 depending on SEER level. For furnaces, New Jersey’s Clean Energy Program offers rebates for high efficiency boilers and furnaces at rates between $300 - $400 depending on efficiency levels and accompanying equipment. Heat pump and ground source heat pumps are rebated at various levels between $350 and $500. At the customer’s request, incentives may be payable to the consumer, the HVAC contractor or the builder. Incentive levels may be adjusted in future years for all eligible equipment based upon market assessments as program barriers are overcome. Residential ENERGY STAR New Construction Program The program offers three categories of incentives. A limited direct incentive for meeting ENERGY STAR qualification. This incentive payment is intended to help offset the cost of required upgrades and verification, and can be tiered based on the level of efficiency attained. For example, a payment of $600 may be earned for meeting HERS Index 85 1 (minimum ENERGY STAR qualification), $800 for HERS Index 80, and $1000 for HERS Index 75 (in addition to meeting all other ENERGY STAR requirements). The incentive is paid upon successful completion of the home, and the offering would be reduced over time based on the program achieving 10 and 20 percent (or greater) market share milestones (baseline market share in BGE territory has been estimated at 2.4%2). A package of marketing assistance. The new construction market will begin to transform most effectively when builders offer and buyers demand, a higher level of efficiency, as identified by the ENERGY STAR label. In order to help grow consumer awareness, the program will offer: 1 A home built to IECC energy code scores 100 on the HERS Index, so that each point of reduction is equivalent to a 1% reduction in projected energy use. ENERGY STAR is set at 85, or 15% better than code. 2 ACEEE 2007 4 A $2000 builder incentive for the construction of an initial “model” home based on commitment of a minimum number of units to the program and specific criteria for qualification of the model home. This incentive is also intended to help offset the higher initial cost of upgrades typical in the first home in a project when contractors are unfamiliar with program standards. Its availability would be capped by builder and budget, and may be limited to the first one or two years of the program only; A 25-40% co-op marketing incentive for builder advertising that meets specific criteria for promotion of program participation (higher levels in years 1 and 2). Technical and sales training assistance. The program will offer technical and sales training support to builders and their contractors, as well as to HERS Providers servicing the BGE market. This assistance may take two forms: Training sessions conducted by the program at no or low cost to participants; A limited incentive payment of $500 available to HERS Providers for each new project commitment comprising a minimum number of units. This is intended to help overcome the reluctance of builders unfamiliar with the program to incurring the cost of the initial consultation that determines their compliance upgrades). This incentive may be limited to the first one or two years of the program only. Note that all marketing, technical and training assistance incentive costs are spread over the total number of participating homes, such that the cost impact per unit will decrease significantly as more units are committed and built. Residential Retrofit Offerings In the first tier of this program, customers may take the opportunity to learn about their home’s energy efficiency status by taking a free, web based online energy audit. They will quickly be able to determine: How their energy usage compares to that of their peers; How they spend their energy dollars in their residence; and What they can do to lower their use and cost and improve comfort in their residence. This unique interactive approach generally offers customers an experience that engages the user and provides detailed, practical and customized recommendations for managing energy use. Multiple levels within the software program generally allow for a user to probe as deeply as they would like, and come back to address particular issues at a later date, returning to a personalized energy center. Additional benefits include: Quick screening that immediately presents major opportunities; Benchmarking that rapidly identifies how the home compares to that of their peers; and Home Improvement calculators that provide a quick way to analyze particular appliances and equipment. This audit tool can provide customers access to other program services and products that they can utilize in order to learn additional ways to improve their comfort while reducing their energy costs. Finally, studies are beginning to show that this basic - entry level approach to consumer education actually results in some customers making simple energy efficient improvements to their homes. Items installed include CFL’s and water saving devices like aerators and low flow showerheads. 5 This program’s second tier will offer customers the option of having a whole house – on site, walk through energy audit of their home. Upon request, a site visit will be scheduled with a qualified energy auditor that will visit with the customer, collect pertinent demographic and house characteristic information, review and assess the thermal envelope, mechanical HVAC -domestic hot water systems and major appliances. Combined with a fuel use history, this information will be input into energy auditing software that will provide the customer with a list of improvements that could be made which will include estimated contractor costs, savings and paybacks. This program’s approach will allow for interaction between the customer and the auditor which will make for a personal, customized review of the customer’s residence. Specific problem areas can be pointed out to the auditor and discussed real-time. This service is anticipated to be subsidized by BGE and offered to customers at a low cost of $40. Customers will be provided the opportunity to have this fee waived provided that they were to follow up with the purchase and installation of a minimum number of basic energy conservation measures including but not limited to CFLs, door sweeps, low flow aerators, low flow showerheads, etc. The third and final tier to this program is built upon the EPA’s Home Performance with ENERGY STAR Program. This market transformation program helps residential contractors offer comprehensive energy improvement packages that are based on good building science, produce predictable savings and improving the energy efficiency, comfort, safety and durability of customers’ homes. The program is built on two parallel delivery strategies. The program encourages residential contractors (insulation contractors, HVAC contractors and remodelers, primarily) to change their business model so that they integrate energy efficiency into comprehensive treatments of homes and utilize trained and certified staff to deliver these services for maximum impact and persistence of savings. In a parallel, coordinated effort, primarily through the audit programs mentioned above, the program markets directly to consumers, encouraging them to undertake significant energy efficiency improvements for their home and pointing consumers towards contractors who are properly trained and certified to provide these services. The contractor recruitment and training element of the program ensures that qualified contractors are available, and the marketing and public education elements ensure that customers will be demanding the services that the program offers. Home Performance with ENERGY STAR has a remarkable track record of promoting very high quality, comprehensive energy efficiency improvements, and mobilizing the entrepreneurial enthusiasm of private contractors in the service of this public policy. The Home Performance with ENERGY STAR program takes the energy audit concept to the next level by equipping contractors to provide both an accurate assessment of a home’s energy improvement needs, and the training to deliver services that ensure both the savings and the ancillary benefits of the work are realized (health and safety, comfort and durability). Just as in residential new construction, the building performance industry has come to understand the potential impact that energy improvement services can have in an existing home, and the range of interactions that work performed by individual trades can have. Contractors certified to participate in the program offer homeowners a customized, comprehensive treatment package for their home, including HVAC upgrades, insulation, air infiltration reduction, duct sealing, window replacement, lighting retrofits, efficient appliances, domestic hot water system replacement and associated repairs. All of these measures, including a comprehensive analysis of potential measures, are provided by contractors who have been certified by the Building Performance Institute (BPI) as qualified to evaluate the homes and install the measures. The contractor guarantees his or her work, and the contracting firm agrees to abide by BPI standards governing health and safety, the technical quality of the work performed, adequate insurance coverage, customer service and complaint resolution. Program contractors will offer “one stop shopping” for these comprehensive packages, including low interest loans to finance the projects. This means that program contractors can either directly provide a wide range of 6 home improvement services (insulation, air sealing, heating system installation, air conditioning installation, lighting replacements and domestic hot water improvements) or can operate as general contractors, overseeing firms that will provide the full range of services. The lead contractor must employ properly trained and certified staff, provide quality assurance, and be subject to inspection by the program’s staff to ensure that all measures are properly installed and all safety precautions are met. The EPA recognizes that its Home Performance with ENERGY STAR program is one that bases its foundation on a market transformation strategy. Recruiting and training contractors, changing their sales tactics, enrolling customers through a moderate sales cycle and delivering services which require strict quality assurance methods takes time to build and achieve. As such, and to balance resource acquisition with market transformation, the EPA allows for a potential hybrid model which relies on the program administrator, as a “consultant”, to provide sales calls and perform technical audits while the program works a parallel path to build a competent and complete contractor network. Under this scenario, customers enrolled into the program will be provided to the accredited contractors that have met the strict requirements of the BPI’s training curriculums. BGE will consider the merits of this approach and may adopt it for the initial phases of delivering its Home Performance with ENERGY STAR program. Customer/Contractor Incentives For Tier 1, customers will benefit from a free online audit service with access to other BGE supporting programs that offer incentives for the purchase, or installation, of high efficiency products. Customers will be free to take advantage of BGE rebate offers where applicable either through retail purchases or via on the online store for any efficiency measures installed. For Tier 2, customers will benefit from a BGE subsidy that will provide a low-cost, on site home energy audit with follow up measures that can be completed by a participating program contractor. Energy conservation measures will be delivered in the free market at market based cost. Depending on final program design and measure determination, they may be eligible for a BGE program subsidy to help buy down the initial cost. Should the customer follow the audit up with certain energy conservation measures, BGE will credit the customer in full for the audit expenditure. For Tier 3, customers and contractors will be able to take advantage several program offering benefits as offered in many other jurisdictions such as New England, NYSERDA and New Jersey including: Contractors Reimbursement for part of the cost of contractor training and certification and accreditation; Reimbursement of part of the cost of program-approved marketing, Reimbursement of part of the cost of the purchase of measurement equipment such as blower doors and duct blasters An incentive for production based on the value of the jobs provided. For jobs generated through the BGE Home Energy Audit Program this incentive could be approximately $200 per job. For projects that the contractor brings to the program through his/her own marketing efforts, the incentive needs to be more significant - usually 5% - 7% of the value of the job up to the ceiling of the jobs allowed under program rules. The ability to offer consumers energy efficiency loans for significant improvements performed by accredited contractors. Third party loans can be structured to be subsidized from a low of 3.99% to a high of 5.99% depending on the level and amount of work to be performed on the customer’s home. A consumer marketing program (see below) that includes a co-op marketing campaign to be carried out jointly by the contractor and the program. 7 Customer-lead generation through the program’s marketing and public relations initiatives, i.e. new leads and therefore new customers for greater revenue. Training of contractor staff in BPI techniques and procedures that supports contractors in receiving accreditation of their company and certification of their staff. The right to display the BPI and Home Performance with ENERGY STAR logos to help differentiate the contractor from his/her competition. Use of a software package for both home diagnostics and incentive tracking and management. Customers 1) 3.99% - 5.99%, third party reduced interest loans to finance home performance improvements depending on the level of work performed, or 2) A “homeowner financing incentive” for participants who pay for home performance projects out of their own funds. This incentive could be between 10% - 20% of the cost of a pre-approved cost effective home performance project depending on the level of work performed. 3) Access to special incentives for income qualified customers (customer that would fall in between the low income program and the non low income portion of the Home Performance with ENERGY STAR program) under the Assisted Home Performance program. This incentive must be substantial to have any affect. In other states, an incentive of 50% of the cost of a pre-approved cost effective home performance project undertaken by an income qualified customer using a participating Home Performance contractor has been effective. In general, contractor/customer rebates can average $ 3,000 per home. Small Commercial Energy Efficiency Program Rebate Offering This portion of the program will include prescriptive efficiency measure rebates that provide fixed incentives for energy efficiency measures. Incentives are based on generally providing 50-75% of the incremental costs (i.e., the additional cost above baseline equipment), in consideration of market barriers, changes in baselines over time and market transformation objectives. Eligible lighting measures include compact fluorescent lamps (CFL’s) electronic T-8’s and T-5’s, electronic ballasts, hardwired fixtures with T8’s /T5’s lamps and electronic ballast, LED exits signs, outdoor lighting and lighting controls. Eligible HVAC measures will include unitary split units, air to air heat pumps, and HVAC controls. Eligible refrigeration measures will include high efficiency ice makers, strip curtains, cooler/freezer door anti sweat controls, vending machine controls, and night covers for open cooler/freezer boxes. The tables below list the incentives recommended for the 2008 program year. Table: Lighting Equipment Incentives Technology Classification 2008 Incentive T-5 and T-8 lamps with electronic ballast replacing T-12 lamps $20 per fixture for existing facilities with connected load 75 kW No incentive for new construction or complete renovation. Complete renovation is defined as “100% fixture replacement for the space involved.” LED Exit Signs - (New Fixtures Only) Up to $20 per fixture 8 Hard-wired compact fluorescent surface mounted fixtures - (New Fixtures Only. Must be pin based technology with Total Harmonic Distortion of <33% and Ballast Factor >0.9) Up to $25 per 1 lamp fixture Hard-wired compact fluorescent recessed fixtures - (New Fixtures Only. Must be pin based technology with Total Harmonic Distortion of <33% and BF>0.9). Up to $25 per 1 lamp fixture Occupancy Sensors (Turning fixtures off in Existing facilities only) Wall mounted – Up to $20 per control Day lighting Dimmers – All facilities Fluorescent Fixtures - Up to $25 per fixture controlled Hi-Low Controls – All facilities Fluorescent Fixtures - Up to $25 per fixture controlled Up to $30 per 2 or more lamp fixture Up to $30 per 2 or more lamp fixture Remote mounted (e.g., ceiling) - Up to $35 per control HVAC controls and simple roof top replacements will also benefit this market segment. The table below shows the type of equipment with rebate values that will be included as part of this program. Table: HVAC equipment rebates Unitary HVAC Split Systems < 5.4 tons ≥5.4 to <11.25 tons ≥11.25 to < 20 tons ≥20 to 30 tons Air to Air Heat Pump Systems < 5.4 tons ≥5.4 to <11.25 tons ≥11.25 to < 20 tons ≥20 to 30 tons Qualifier/Rebate 13.0 SEER/$92 per ton 11.0 EER/ $73 per ton 10.8 EER/ $ 79 per ton 10.0 EER/ $ 79 per ton Qualifier/Rebate 13.0 SEER & 7.8 HSPF/$92 per ton 11.0 EER/ $73 per ton 10.8 EER/ $ 79 per ton 10.0 EER/ $ 79 per ton Packaged Terminal Systems < 9,000 BTUH ≥9,000 to 12,000 BTUH > 12,000 BTUH Qualifier/Rebate 12.0 EER /$65 per ton 11.0 EER/ $65 per ton 10.0 EER/ $65 per ton Table: Refrigeration equipment rebates Technology High Efficiency Ice Makers Strip Curtains Cooler/Freezer Door Anti Sweat Controls Vending Machine Controls Night Covers Rebate $ 50 per maker $10 per unit $ 275 per control $ 85 per control $ 20 per cover 9 Direct Install Offering The program will offer customers who need the full assistance of turnkey provider with a “cradle to grave” approach to completing their energy efficiency project. Utilizing a qualified contractor pool, the program will offer eligible customers the benefit of an evaluation of their facility from a lighting, heating/cooling, motors and, if applicable, refrigeration standpoint. Cost, savings, and payback scenarios will be run for all eligible measures. Costs will be based upon a significant subsidy provided by the program with a minimal contribution required from the customer. Subsidy ratios currently under discussion center on a 75%/25% split, program to customer. Upon acceptance to perform the work, the contractor will design, install, commission and warranty all measures installed. In addition, the contractor will dispose of any materials removed from the project’s site. Quality assurance inspections will be completed to ensure that all measures installed comply with the program’s requirements. Low Income Program All Low Income Program energy efficiency assessments, energy education and retrofit services will be provided free to qualified program participants. The program will include efficiency measures to address the full range of baseload and seasonal energy uses including: Heating system operational efficiency Central and Room Air Conditioning operational efficiency Heating and A/C distribution system efficiency Building envelope efficiency Insulation levels Lighting Domestic water heating Appliance use and operational efficiency Customer use patterns Additionally, consistent with a building science based design, the program will include health and safety checks and where appropriate measures to address health and safety concerns that can be viably delivered through the program and that will enable subsequent efficiency measure delivery. Program delivery agents may include current CHIP delivery organizations and other entities as needed to deliver the on-site services. The development and training of on-site delivery crews has the potential to create excellent job opportunities for Marylanders particularly in economically distressed areas. Initial program plans will include community based outreach to recruit qualified applicants in the areas served. Our review of the experiences of other comprehensive low income programs has shown that this community focused approach to recruiting and developing program delivery staff can be particularly effective. These approaches can also create avenues for partnering with trade and technical schools to support the building science knowledge and skills required for this initiative and for the non low income home performance initiatives. The program will also include the participation of specialty service contractors to support the delivery of HVAC, electrical, plumbing, and refrigerator replacements elements of site specific treatment plans. A Program contractor will be secured to detail and implement program elements to include measures protocols, staff training and skill certification processes, specialty contractor networks, data tracking and reporting systems, installation and materials standards, diagnostic check procedures, and quality assurance routines. The program data set will be structured to collect specific data elements to support ongoing 10 performance assessment and will provide a basis for independent 3 rd party analysis to evaluate the Program’s performance and energy impacts. 11
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