Transforming utility customer service: Evaluation, measurement and verification

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Many states throughout the country are beginning to set their own greenhouse gas (GHG) emission limits to combat climate change.  In order for states to meet these limits, significant GHG reductions from both the commercial & industrial and residential sector are necessary. This series of articles examines how technology intersects with policies to drive residential sector decarbonization. In addition to developing and advancing new technologies, it is critical to have corresponding policies that support the adoption of those technologies.

This article, the next in our series, focuses on the necessity of robust data and independent review through evaluation, measurement, and verification (EM&V) activities to support the expenditure of public policy funds on lower carbon technologies for residential customers.

In some instances, lower carbon heating and cooling technologies like heat pumps still have higher upfront and operational costs than their fossil fuel counterparts. In order to help customers overcome these financial hurdles, many jurisdictions have begun offering incentives through energy efficiency programs to offset the incremental costs associated with heat pumps. To ensure judicious use of ratepayer funds through energy efficiency programs, it is necessary to have a strong EM&V regime within those energy efficiency programs. EM&V activities can provide quantifiable data to justify monetary incentives to support the widespread deployment of lower carbon technologies, especially as these technologies encourage switching from existing fuel sources to electricity.

In order to provide incentives through utility energy efficiency programs, measures typically need to be cost effective, that is to say that they need to produce more benefits than costs. EM&V is the mechanism where the savings, benefits, and any non-energy impacts associated with heat pumps are determined, which in turn dictates the cost effectiveness. In traditional energy efficiency programs, incentives are offered for improving efficiency assuming no changes to the source of the energy, so the savings calculations are relatively straight forward.

For example, an incandescent light bulb uses a certain amount of electricity and an LED uses a measurable amount less. However, determining the savings from heat pumps is not straightforward because in many instances heat pumps are a fuel switching measure (i.e. an electric heat pump displaces use of fossil fuels). This means that it is necessary to calculate the net energy saved from reducing fossil fuel consumption from the existing heating system compared to the increased electrical usage from a heat pump. This is where EM&V is so critical.

One of the most challenging dimensions of EM&V in determining savings from fuel switching heat pumps, and ultimately the level of incentive that can be supported, is determining the appropriate baseline from which to measure the savings. Determining a baseline might depend on a customer’s intent. For instance, if a customer was going to install a heat pump without the energy efficiency incentive but the incentive convinces the customer to install a higher efficiency heat pump than they would have otherwise, the appropriate baseline may be the lower efficiency heat pump. In that case, the incentive should be based on the energy saved from a lower efficiency to a higher efficiency heat pump.

Determining how a customer may operate their heat pump may also impact baseline considerations. There could be instances where a customer installs a heat pump and only uses it during Fall and Spring so that it only partially displaces a fossil fuel heating system. There may be other instances where a heat pump is the primary heating source and is installed to fully displace fossil fuel heating year-round. Customers may be using heat pumps for cooling when they previously had none. The level of fossil fuel savings and increased electricity consumption would be much different in each of those scenarios.  “Given the varying pre-existing conditions in a customer’s home, as well as varying usage of heat pumps to displace heating sources, it’s particularly important for energy efficiency program administrators to research and apply specific baselines that capture these different dimensions.”, said Scott Dimetrosky, President of Apex Analytics, a consulting firm that specializes in EM&V. All of these different permutations must be considered when trying to accurately determine how much energy is saved by a heat pump.

There are certainly many challenges associated with quantifying the energy savings and attendant benefits associated with switching customers to lower carbon heating sources like heat pumps. Additionally, providing incentives to customers to switch to heat pumps will likely be necessary in the immediate future. Independent and robust data, collected and analyzed through EM&V processes, that demonstrate the greenhouse gas reductions from heat pumps is paramount in justifying the expenditures necessary to entice customers to make the switch from fossil fuels. EM&V can also be instrumental in helping customers better understand how to use and optimize their heat pump systems. Fortunately, there are ongoing EM&V efforts dedicated to supporting rigorous data collection and analysis to support incentives for the types of public policy objectives envisioned with the deployment of lower carbon heating sources.

More from this year’s series:
Transforming utility customer service: Rates, incentives and decarbonization
Transforming utility customer service: Residential heat pumps can help decarbonization efforts
Transforming utility customer service: Helping decarbonize the residential sector

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Michael Goldman is a Director on the Energy Efficiency team at Eversource Energy, the largest energy delivery company in New England. He is a frequent contributor to conferences and articles on distributed energy resources and their impact on the evolving grid.

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