HomeMy WebLinkAbout8.3 Large Scale Energy Retro Program~~
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SUBJECT:
ATTACHMENTS:
CITY CLERK
File # ^0^3^-~ a^
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 16, 2009
Approve Letter of Support for Davis Energy Group's Large Scale
Energy Retrofit Program
Report Prepared by Roger Bradley, Administrative Analyst
1) Davis Energy Group Program Executive Summary
2) Draft Letter of Support
RECOMMENDATION: Accept the report and authorize the Mayor to sign the letter of
~~ support.
FINANCIAL STATEMENT: Participation within the program would require Staff time to assist
with identifying housing types. No monetary assistance is required.
DESCRIPTION: In May 2009, Staff from Stopwaste.Org approached the City with a
recommendation to participate in a new pilot program designed to increase energy efficiency within the
City's older housing stock. The proposed program is being coordinated by Davis Energy Group. Davis
Energy Group proposes to analyze the City's existing housing stock to create energy retrofit packages for
sale to Dublin residents to increase energy efficiency and reduce waste (Attachment 1). The program seeks
to provide retrofit options to a large number of individuals to take advantage of cost savings from buying
products in bulk. The current cites involved include Pleasanton and Stockton. With the City of Dublin's
participation, Davis Energy Group anticipates completing more than 500 retrofits within the three cities as
part of its pilot study or demonstration project. Davis Energy Group anticipates that the initial phase of
500 homes would save across all communities:
• Energy savings of 2,723 MWH per year;
• 520 kW peak demand reduction;
• Natural gas savings of 28,250 therms annually;
• Annual greenhouse gas C02 reductions of 1,007 metric tons.
The goals of the program are consistent with the City Council's goals and objectives concerning
environmental sustainability. In addition, the financial impact upon the City is minimal, with only
residents interested in participating paying for the services rendered.
RECOMMENDATION: Accept the report and authorize the Mayor to sign the letter of
support.
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Page 1 of 1
ITEM NO.
F:\Council\Agenda Statements\2008-2009\as-Davis Energy Group.doc
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CONFIDENTIAL
Davis Energy Group
EXECUTIVE SUMMARY
LARGE SCALE RESIDENTIAL RETROFIT PROGRAM
Introduction
Of the nearly 13 million existing housing units in California, more than nine million were
built before Title 24 energy efficiency standards took effect. Only a fraction of these have
received a comprehensive energy efficiency retrofit. Consequently, in its June 2008
Climate Change Draft Scoping Plan, the California Air Resources Board identified the
existing home sector as having among the highest potential for reducing greenhouse gas
emissions 9.7 million metric tons C02 equivalent per year. This is higher than any
other building sector and one of the largest single targets identified.
Energy retrofits have been technically and financially viable for years. Energy retrofits
cut utility bills, reduce peak demand and enhance comfort. According to a McKinsey &
Co. study, energy efficiency is the most cost-effective way to meet the nation's growing
need for power. A significant percentage of commercial buildings have undergone
retrofits, and an entire industry of energy services companies (ESCOs) has grown in
response. Why hasn't this happened in the residential sector? There are two primary
market barriers that have kept residential energy retrofits in the shadows:
• The custom, high-margin, fragmented nature of the residential retrofit industry;
• The mismatch between cost and savings.
The Large Scale Residential Retrofit (LSRR) Program will bring together experts from an
array of professions to design a programmatic structure to smash through these barriers. It
will then demonstrate this new model by implementing approximately 500 residential
retrofits in targeted inland California communities. The result will be a roadmap for
scaling residential retrofits based upon principles of building science and making use of
long-term tax lien financing recently enabled by AB 811. Successfully implementing this
roadmap is the LSRR Program's key goal.
Objectives and Targets
The objectives of the LSRR Program include:
• Create a marketing plan to achieve retrofit penetration greater than 20 percent in a
targeted community;
• Design a demonstration project and the legal, financial and business structure
needed to sustainably implement large-scale, integrated residential energy
retrofits;
• Complete more than 500 residential energy retrofits in the Demonstration Project,
with market penetration of 20 percent to 50 percent;
• Conversion of an existing ventilation cooling -fresh air ventilation system used
in new homes to an easily retrofitable system with installed cost under $3,000.
The program will serve as a case study of integrated system building and community
design that provides multi-dimensional performance and efficiency improvements.
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ATTACHMENT 1
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CONFIDENTIAL
Davis Energy Group '
Resulting Technology, Services and Products
One hundred years ago, automobiles were custom built for the rich. Thanks to Henry
Ford, car production was brought to scale, as were many other products. The residential
retrofit industry has defied that trend, creating an opportunity, and need, to simplify and
streamline residential energy retrofits. That is precisely what the LSRR Program will
accomplish.
With the enactment of AB 811 in July 2008, municipalities can now offer long-term, low
fixed-interest rate loans through voluntary property tax liens to homeowners who
implement energy retrofits. The result is a better alignment of annual energy savings with
payments and the chance to pierce the financial barrier.
Current plans for programs funded through property tax liens like those of Berkeley and
Palm Desert rely heavily on contractors to sell retrofit measures. Given the industry's
fragmentation, one can expect that each contractor will primarily sell their own services,
e.g., air conditioning or PV, despite the fact most homes need an integrated approach.
The result will be a large number of homes with PV only and others with new air
conditioning and tight ducts, but no additional measures to cut cooling loads. The need to
unite this process in a holistic manner is glaring. The LSRR Program will accomplish this
by targeting subdivisions of similar houses, using sophisticated optimization methods to
develop standardized retrofit packages, and organizing installation through specially
trained contractors (such as partners Grupe Homes and Beutler Corp.) able to implement
the retrofits in an efficient, cost effective manner by applying the same principles of scale
used by production builders.
Costs and Benefits
The total cost of the LSRR Program will exceed $4.6 million, depending on the number
of homes retrofit in the Demonstration Project. Of this, approximately $1.5 million of
PIER funds are budgeted, with the remainder being match funds requested from PG&E
and the U.S. Department of Energy. The remaining match funds will be contributed
through homeowner loans to complete 500 or more residential energy retrofits,
conservatively estimated at $5,000 each. Direct benefit of these 500+ retrofits is
estimated as:
• Energy savings of 2,723 MWH per year;
• 520 kW peak demand reduction;
• Natural gas savings of 28,250 therms annually;
• Annual greenhouse gas C02 reductions of 1007 metric tonst
We anticipate a large ripple effect after the Demonstration Project's successful
completion. To account for this, we project a broader statewide impact as follows:
• 6,775 GWH/year (7.8 percent residential energy reduction);
Based on C02 estimates of 313 kg/MWH saved and 12.0583 Ibs/therm of natural gas saved.
ATTACHMENT 1
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CONFIDENTIAL
Davis Energy Group
• 2148 MW peak demand reduction (10.7 percent residential peak demand
reduction;
• Natural gas savings of 50 million therms annually (0.9 percent reduction);
• Annual C02 reduced by 2.4 million metric tons.
In sum, the Large Scale Residential Retrofit Program is designed to unlock a significant
portion of the potential energy, demand, and greenhouse gas emissions reductions the Air
Resources Board identified as lying dormant in California's existing housing inventory.
ATTACHMENT 1
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June 16, 2009
Mr. Mark Berman, Principal
Davis Energy Group
123 C Street
Davis, CA 95616
Re: Large Scale Energy Retrofit Program
Dear Mr. Berman:
This letter represents the City of Dublin's intent to participate in the Davis Energy
Group's Large Scale Energy Retrofit Program. The City is pleased with the many
benefits that your program has to offer to the Dublin community.
The Dublin City Council has taken a proactive stance in improving the environment with
a number of goals and strategies involving climate change and the conservation of
resources. The proposed program offered by the Davis Energy Group would effectively
complement the City Council"s current efforts by helping to conserve energy and reduce
greenhouse gas emissions among the City's older housing stock. This will not only
provide environmental benefits to our community, but also save our residents money in
the long term.
We look forward to working with your organization and to seeing the benefits of your
efforts taking effect within the Dublin community.
Sincerely,
Tim Sbranti
Mayor
ATTACHMENT 2