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This type of market transformation does not happen without a significant and aggressive intervention in the energy efficiency market. Transformation begins with recognizing that energy efficient products and services are of premium quality and that the current reliance on rebate programs to promote energy efficiency must end. Rebates tend to devalue a product or service in the consumer’s mind and typically do not increase the market share of the product after the rebate goes away. From a budgeting perspective, there is also the complication that the more successful the rebate program, the more and more expensive it becomes. Targeted consumer incentives can be effective, but only within a comprehensive strategy; the consumer incentive should not be the entire strategy itself.
The next step is a comprehensive “push-pull” marketing approach for energy efficiency. The “push” aspect requires ensuring that there is an ample supply of energy efficient products and services in the market, that salespeople are educated on the attributes of energy efficiency, and that suppliers are encouraged to highlight the benefits of energy efficient products to their customers. The “pull,” or demand side, involves increasing awareness of and interest in energy efficient products and services through targeted consumer incentives – not stand-alone rebates – paired with local advertising efforts. These program tactics are aimed at creating a sustainable foundation for energy efficiency as a sales attribute and purchase ethic, thus driving transaction costs per unit of saved energy lower and lower over time.
The push-pull method isn’t just a theory, it has worked in practice. In 2000, regulators in New York were forecasting power shortages and it was feared this would lead to power outages in the New York City area during the summer peak usage periods. Residential air conditioning units were becoming increasingly popular at the time and it was determined that cheap and inefficient units were at the core of this growing energy demand.
Through the New York State "Keep Cool" program, customers were given the option to purchase a new, energy efficient ENERGY STAR® air conditioning unit, and receive $75 in exchange for their old, inefficient air conditioning unit. This is called a "bounty" program, which differs from a rebate program. In a traditional rebate program, the new energy efficient appliance is subsidized without regard to the old appliance that is replaced. For instance, from experience we know that when an old refrigerator is replaced with a new ENERGY STAR® model, the outdated unit is often reconnected in the basement or garage, which increases the electric load of the home. Similarly, when a window A/C unit is replaced, the old unit is often used in a smaller room elsewhere in the home. A “bounty” is paid to permanently remove old, inefficient appliances from the marketplace and eliminate the possibility of increasing electric loads.
Combining the consumer incentive with a large marketing campaign – and an increase in energy efficient air conditioner stock in stores – the Keep Cool program resulted in the removal of hundreds of thousands of old room air conditioning units. The market share for energy efficient units grew from 25% to 65%. This market intervention approach not only produced immediate energy savings for both the State of New York and for customers, but it also permanently transformed the fundamental characteristics of the market in favor of energy efficiency.
Driving consumer demand and ensuring a constant supply of energy efficient products is only one aspect of the greater goal of transforming the energy efficiency market. A transformed market requires trained energy professionals to educate suppliers and consumers on the benefits and attributes of energy efficient products and services. It is necessary to build a competent service infrastructure of retailers, builders, raters and contractors – the green jobs that support energy efficiency. Partnering with existing educational resources, such as universities and vocational schools, will help create a highly skilled and sustainable workforce. The quality assurance and quality control framework that trained professionals enable will foster consumer confidence in energy efficient products and services.
It’s time to rethink our approach to energy efficiency and transform the market as we know it. The approach outlined above challenges the status quo, and it would be particularly effective because it is self-reinforcing. Teaching consumers to choose energy efficient products and services requires a sales and marketing approach that underscores the inherent value in energy efficiency. Supporting the increased demand for energy efficiency will require significant job growth in relevant fields, from building analysts to home energy raters. This infrastructure for energy efficiency will ensure satisfied, educated and repeat customers. The result will be increased energy conservation, reduced energy costs and growth in green jobs.
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Len Gould 2.13.09 |
Ontario is running a "bounty" program The Great Refrigerator Roundup against old 'fridges in which the only incentive was that the utility would collect and dispose of the old units for free. Also "Window air conditioners and dehumidifiers (must be operational)". Apparently very successful.
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Fred Kesinger 2.15.09 |
The author outlines a very comprehensive program for long- term energy efficiency. It remains to be seen how effective we can change our consumer habits and build the momentum for energy efficiency. Not only for us, but also for our children and grandchildren.
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Jude Clemente 2.17.09 |
Check out my comments on Singleton article for more details on this. Energy efficiency is far more complicated than Americans understand. It is an entire field of economics. Increasing the efficiency in which a product is used lowers its cost - thereby it tends to increase our consumption rate of that product. I do not feel like repeating my previous comments but The Jevons Paradox is a concept that continues to be ignored. Energy efficiency is not a standalone solution to our problems. It is not the panacea and common sensical idea it has been made out to be. When people advocate energy effiency - what are they basing their beliefs on? It surely is not the history of our economy and CAFE standards. We have become more efficient on both, yet we consume more energy. Where is the proof (not a study) in our history telling us energy efficiency lowers energy consumption? Certain efficiency standards will work - but some will not. That is my point, this is a subject that has been far too oversimplified. In fact, a recent study showed CAFE standards jump 60% to 44 mpg - we will still need 4 million more barrels a day of oil.
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Jim Beyer 2.18.09 |
I'm not sure the Jevons paradox is being ignored. But it may not apply in the instance of oil. If we assume oil production has peaked, or will at some point in the near future, then the paradox may not apply. That's because increased efficiency may not lower the cost, but only keep it from rising quite so fast. The paradox was in effect with, for example, coal and the steam engine, but when it comes up against production limits, then it may not be in effect. Let's reverse your logic for a minute. During a period of limited oil production, one shouldn't be more efficient in its use? That doesn't make sense, and wouldn't occur. I'm all for learning from and examining history's lessons, but I think these lessons also need to be examined critically. Paradox or no paradox, Jevons cannot make more oil come out of the ground.
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Jude Clemente 2.18.09 |
Good point Jim. I too believe energy efficiency can slow our growth rate of consumption. I happen to believe in peak oil but now with low prices that subject is not getting much press. Robert Hirsh, a top expert on the subject, tells us peak oil believers to sit back and let the cards fall - we will be vindicated. The point is these are issues way to oversimplified. Another example is how natural gas is becoming a global commodity with Iran, Russia, and Qatar holding 60% of the reserves in the world. Yet, Pickens and others want our cars to run on natural gas. Shale development and horizontal drilling is tough with the economic times. These are concepts that need more thought.
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Malcolm Rawlingson 2.21.09 |
Energy efficiency is great in principle - it is what power engineers do for a living - convert other forms of energy into electrical energy as efficiently as possible. But I disagree with the notion that it is necessarily good for the environment or cheaper or will create green collar jobs - at least not in North America. The ubiquitous mini flourescent light bulb is a good case in point. On the face of it a great idea. Consumes less electrical energy than a normal incandescent bulb when it is operating and (according to the advertising hype) lasts 10 times longer. So how many jobs in North America do these light bulbs create. Answer is NONE. I looked extensively for a mini floursecent made in North America. ALL are made in China. That means we must be shipping millions and millions of these from the manufacturing plants in container ships burning diesel fuels from China where they are made to North America where they are consumed. Does not appear to me to be energy efficient. As far as jobs are concerned it probabl;y resulted in a net LOSS of jobs since all the tungesten filament bulb factories are now closed or on the brink of closing. So not many green collar jobs there my firend. So how much electrical energy do they save. Not much. To evaluate this one has to look at the total amount of energy that goes into both the manufacture AND the operation of the device. It is true that when operating mini flourescents use significantly less electrical energy (15 watts vs 60 watts). However the manufacture of all the electronics inside these devices consumes alot of energy therefore it is very likely that the energy required to make a mini flourescent bulb is significantly higher than that used to make a filament bulb. So what you win on the roundabouts you lose on the swings. So how much good do they do the environment. Not much. Each bulb contains a small amount of mercury which as we all know is quite toxic to humans and animals. Indeed mercury is a controlled substance in most North American jurisdictions. There will be a small portion of mini flourescents that do not make it back to the recyclers...ie they will get broken therefore releasing their toxic contents to the environment. So not much good for the environment either. Note that tungsten filament bulbs are not toxic to animals or humans. And finally the claim that they last up to 10 times longer. They don't. They do if you leave them on all day and all night (defeats the whole object of saving energy don;t you think) but if they are switched on and off frequently as one can do with a filament bulb without problem then their life span is far far less. Based on my usage of them now for 8 years their actual life span when used in the same mode as a filament bulb is about 3-4000 hours...definitely not 10 times longer. Initial cost is one dollar for a pack of 4 filament bulbs (25 cents each). A pack of 4 mini flourescents cost around $10 or $2.50 each. The cost is 10 times higher for an "energy saving" device that does not last 10 times longer. So please be careful whjen you assert that energy efficiency equals good things for the envoronment (it does not in this case), green collar jobs (in China only - none in North America) and lower costs (much higher in this case). And one final nail in the coffin of these particular "energy saving" devices. When they get old they make the most infuriating buzzing noise for months until they finally give up the ghost and expire. Noise pollution in the home - not an environmentally friendly product at all. The Chinese of course - being the smart people that they are know all this - and are laughing (or ought to be) all the way to the bank while we are trudging down to the recycling centre to recycle our toxic light bulbs. Malcolm
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Malcolm Rawlingson 2.21.09 |
Rick, What you say is great stuff...being energy efficient is a wonderful concept ...but as I said in the post above equating it to the creation of green jobs is highly misleading. The ONLY way you will be able to do that is to restrict the import of white goods like fridges and air conditioners from China Korea and elsewhere. If all these items were made in North America you would be correct. They are not, unfortunately, so Government incentive dollars spent to supposedly improve energy efficiency only serve to create manufacturing jobs outside of the continent. And while a new fridge or freezer may be more energy efficient what about all the energy that went into making it. Throwing it away prematurely is an appalling waste and I would wager that if you added up the waste of energy occurring by throwing out older appliances before the end of their useful life actually COSTS more than you save. A much more sensible approach would be to force manufacturers including the Chinese to make appliances that LAST. A new appliance will last much less time than an older one....the Chinese learned built in obsolescence from us and they are much better at it than we ever were. As for me...I am getting rid of all my flourescent "energy efficient" light bulbs and keeping all of my old appliances. The money I save will go into my electricity bill to keep my colleagues in business. Note that our electricity is NOT made in China. All 100% of it is North American made. Malcolm Malcolm
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Malcolm Rawlingson 2.21.09 |
Jude, Most of the ideas put forth by Rick in this article relate to the reduction in electrical energy consumption. Since only about 1% of electrical energy is derived from the burning of oil (mostly waste heavy oil that cannot be used for much else) then I fail to see what this has to do with peak oil. Indeed most of the "energy saving" ideas above actually increase the consumption of oil since most of the products originate from China and they don't have electric ships yet. So if you are worried about peak oil. Keep your tungesten filament bulbs, keep your old fridge and freezer and don not do any of the things Rick suggests. What he recommends will consume more oil at the expense of electricity mostly made with nuclear energy and coal. Under his scheme oil use goes up - not down. Malcolm
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Len Gould 2.24.09 |
Malcolm: "That means we must be shipping millions and millions of these from the manufacturing plants in container ships burning diesel fuels from China where they are made to North America where they are consumed. Does not appear to me to be energy efficient. As far as jobs are concerned it probabl;y resulted in a net LOSS of jobs since all the tungesten filament bulb factories are now closed or on the brink of closing." -- The error in your assumptions is that if we all reverted to tungsten filament bulbs, any of those would still be manufactured in N. America. You know they wouldn't, and we'd simply be shipping 10x the bulk volume of bulbs across the Pacific.
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Len Gould 2.24.09 |
Regarding bulb life, two points. 1) My own experience. I set up my work apartment three years ago with 2 CFL table lamps which were already used in the lamps when I brought them from our home. It had cieling fixtures with incandescents in living and kitchen. I've had to replace the incandescents many times. Same CFL's still fine in the lamps, which are on about the same amount. Not sure why some people are claiing poor life from CFL's. Agreed, some bad ones when first intro'd, shouldn't be a problem now. 2) this from a comment to Popular mechanics The Best Compact Fluorescent Light Bulbs: PM Lab Test "I decided to take apart the first few that failed and see what the problem was. I don’t recommend people doing this because of the mercury inside the bulbs. One bulb actually burned the circuit board inside. What I found was poorly designed electronics being the main cause of failure. When designing for the high volumes, an engineer is going to be pressured to squeeze every penny out of the design and that means riding the edge of failure. There is no reason that a CFL can’t last for a very long time but you are probably going to have to pay a little extra for a good product. At this time, I know of no standards regarding these types of bulbs. Until we get some standards and methods of certifying these standards, we’re going to be seeing a lot a variance in quality. I do know that my power bill is much lower using CFLs and will continue using them while searching for the good product."
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It's easy to contribute articles, article proposals, commentary and analysis and be published online through Energy Central!
Sound interesting? Contact the editor for more information.