HPWH Regional Collaboration Workshop May 25 26 2011

HPWH Regional Collaboration Workshop May 25 -26, 2011 Workshop Notes 1 NORTHWEST ENERGY EFFICIENCY ALLIANCE

Workshop Objectives Information sharing Creating alignment around a unified, regional strategy for HPWHs Provide launch pad for ongoing collaboration 2

Workshop Participant Topics to Discuss 3 NEEA approved models Create criteria Regional support Tiered rebates Utility distribution Messaging Tier 3 benchmarks/incentives Front load washer model Marketing/retail conversations Available testing data Public info that allows consumers to choose Ducting BC Hydro enlistment More positive data around performance – GE and AO Smith BPA survey questions = covered during workshop

Brainstorm: Tools We Need q Consumer reports q Reviews/ blog posts q User survey- BPA q Contractor Guide- NEEA q Product recommendations q HPWH Facebook page? q Energy Star participation q Utility/ NEEA product part q Big Box leverage > installation costs down 4

Brainstorm: What We Might Also Consider Ø Japan – from 0 to 1 Million installed Ø American technology or foreign? • How do we get it here? • Process? Ø Key stakeholders working together Ø Make it opt-out rather than opt-in Ø The female consumer as decision-maker Ø Field Testing/ Pilots • What are the conclusions? • Do we need more information or can we move forward? 5

Imagine, Consider, Think… What are the 5 key components to successfully implementing heat pump water heaters in the Pacific Northwest? 6

Key Components – Utility Coordination • Coordinated approach among utility incentives and government • • • 7 regulation Well thought strategy for distribution channels deployment Mandate by code Federal standard Get over our fear Process improvement

Key Components – Market Actors • • • • • 8 Contractor training – quality assurance Trade allies- Educate, train best practices manual A well trained and well informed and widely available network of installers Training certification and QA for technicians Appropriate installation training regime for contractor Training (plumbers, mechanics. ) Trained installers to reduce upfront costs Free rapid install training for contractors Installer training Strong training component (trades sales staff) Contractor training about heat pump operation Good retail/installer training Contractor education Retailers Available through “normal” distribution channels Change distributor/ contractor stocking practices Just in time availability Stocking incentives(have been very successful with. 67 DHW gas)

Key Components – Product Design • Work everywhere - work reasonably in all climates • Trouble- free HPWH’s that produce savings in a northern climate in any installation location (including conditioned spaces with ducting for exhaust and intake) • Northern Climate spec compliant equipment • • 9 From major manufacturer Plug and Play (must be simple) Cute Style- Food Design Second generation with exhaust vent Split systems with out commissioning Small affordable, retrofit-able Flexible for various applications Simplify unit settings

Key Components – Product Design (cont) • • • 10 Integrate with a home ventilation strategy Federal standard< 55 gal Easy to operate Designer colors NTS complying HPWH Ongoing product improvements Mitigate noise Smart Grid compatibility Combine use DHP/HPWH Next generation of technology

Key Components – Product Performance • • • 11 A reliable product that wont get consumer complaints Easy to operate High performance units that deliver hot water all year long Save money, energy, resources Predictable energy savings Minimum 2. 0 EE requirements

Key Components – Product Install • • • 12 PTCS style installation Standardize installation Easy to install Ease of “Dumb” installations Efficient venting easier install

Key Components – Costs (Pricing & Rates) • • • 13 Cost barrier needs to be addressed Affordable - Lower cost to consumer (incentives lower retail costs, etc) Consumer incentives- utility Financing/ grant structure Lower first cost Retraining cost Rebates/ tax incentives healthy- high rates Right price Financing Higher Rates

Key Components – Research • • Proven energy savings Successful EPRI pilots • Report out • • 14 Install more units to collect data More field data Consensus test standard More measured field performance

Key Components – Consumers • • • 15 Unified messaging to consumers Simple, clear, consistent marketing to consumers Creating consumer demands up front Customer appreciation of long term money savings (vs. upfront cost) Customer education Good consumer information Increase consumer awareness Provide training on operating the unit Menu for homeowner to identify the correct unit Happy customers (low cost; lots of water) Encouragement of quality products that don’t negatively impact customer comfort

Key Components - QA • Strong quality assurance and feed back mechanical • Providing labeling/ QA mechanisms 16

Key Components - Marketing • • • 17 Marketing by utilities- CFL style program Leverage manufacturer marketing Marketing- with right kind, people will buy anything Marketing to get to the why should we care More catchy marketing, like the monkeys

Key Components - Other • • • 18 Series of golden carrots Penetrate new construction Free/give away

Imagine, Consider, Think… What Might Each Organization Contribute? 19

What We Can Contribute Bonneville Power Administration • Continue collaboration with NEEA and other organizations • Develop testing standards • Simplified field M & V protocol BC Ministry of Energy and Mines • Has ability to regulate – open Washington State University • An organizing hub for government, manufacturers, NGOs, field research • Build America • Training, development (filed and quality assurance) • Develop codes and standards 20

What We Can Contribute Ravalli Electric Co-Op • Share Data • Promote products that work • Push manufacturers and installers Fortis. BC Inc. • Build plumbing capacity • Cheaper units – get consumer feedback before spending more $ • Facilitate regional conversation • Steer next Energy Star • Present consistent voice and standards Electric Power Research Institute (EPRI) • Collect and share as much field data as possible • Work with national and international collaborators and manufacturers 21

What We Can Contribute Northwest Energy Efficiency Alliance • Regional voice for stakeholders - manufactures, retailers, distributors, etc • Funding - upstream/midstream • Collaborate with all the players • Lab and field testing • Represent the NW on standards • Holistic market transformation Energy Trust of Oregon • Support NEEA – help them meet expectations and codes • Pilot installation – funding • Plumber network – share now • Efficiency labeling • Understanding of market – Niche communications • Cheer John on! • Support Graham’s projects 22

What We Can Contribute Portland General Electric (PGE) • Work with ETO - energy benefits, smart meters, Demand-Response programs • Share lessons on what not to do Pacific Northwest National Laboratory (PNNL) • R & D materials • Smaller, cheaper, more efficient units • Plumber perspective Bonneville Power Administration • Work with manufacturers – continued improvement • Funding/cost adoption • Share current technology comparison • In home testing TVA • Generation II unit 23

What We Can Contribute Puget Sound Energy (PSE) • Contractor influence • Awareness – customer and distributor • Testing mechanism Seattle City Light • Regional consensus • Funding via X-Prize type competition • Purchasing power – bulk • Data sharing with other utilities • Transparency – show the “dirty laundry” Tacoma Power • Collaborate with other utilities • Marketing – adoption • Installation incentives – encourage best products by offering higher 24 rebate rate

What We Can Contribute Snohomish County PUD • Incentives only for best products • Consistent incentives beyond sales tax • Improve contractor relations – incentives, support – they are sales force Idaho Power • Northern spec in place • Trade ally relationship • Rheem might work with their climate Northwest Energy Efficiency Partnership • Linking regional efforts • Facilitate regional conversation • Steer next Energy Star • Present consistent voice and standards 25

Presentation Take-Aways 26

PSE – Take-Aways • 60% units purchased through retail channels • Lowes is leader • Take back rate is less than 2% • AMI can produce data – will share soon • Successful leveraging of retail and manufacturer partnerships • Contractors not currently carrying product • Distributors have available for pickup • Rebates for new construction – 2012 • No rebates for gas units swapped to HPWH • GE is primary manufacturer – highest marketing budget • Contractors had trouble with Rheem unit – too noisy 27

Sno. PUD – Take-Aways • All garage installed but 2 Dykin units • k. Wh higher in homes with HPWH installed • Dykin system for new homes is great but expensive • Heats water and home • Have to choose between air conditioning and hot water in • 28 summer Hydro-box - $6, 000 – part of a whole home retrofit

PGE – Take-Aways • Created a roadmap of what needs to be fixed start to finish – • Size • Cost • Efficiency • Installers • Rheem unit proven to be inferior • Can a different manufacturer really make all the difference • Retrofitted units did not solve problems • 18” flex is code – often need more • OR plumber issue - # of licenses issued lowers as economy sags – • they stay valuable – no incentive to participate ETO regulates incentives – no contractor incentives at this time • Positives: • Creating performance specs • Builders are stepping up on electric (not gas) due to EE, lower costs and successful models in low income housing 29

NEEA Presentation – Take-Aways • • 30 Comments - 31 st Webinar - 7/7 Report - final end of fall AO Smith - more open to next generation Get more formal feedback from manufacturers (Big 3) Air Generator - Niche player Pacific Northwest - Could be niche market and utilize smaller manufacturer Need a more standardized test for the region

EPRI – Take-Aways • • • 31 Data is currently being tested 10 – 20% of test sites compared to control site Demand-Response controls 2 smart metering projects in the NW tier Simplified package/protocol = value

Open Forum 32

Better Units • • • 33 • Tiered Rebates • Higher Savings “Qualified” products certification Choose best “Suite” of tests to lock down best units What are Qualifiers? • “NEEA list” • Test Standards • Qualifying Specs BPA- DATA- preform- mid July Air GEN unit • Almost There > Q 3 • Need Big Box connection • AO smith duct unit • Know in a week or two 10’? Movable to intake Bosch unit- Testing passive Defrost Sky C> Testing July Lab test on 4 units by August EU- Dyken Unit Europe > 1 unit/ life $4 k • Not us specs Chinese Units Market Share? • Now • 1 year GE Inverted ribbon split systems

Regional Ideas • Upstream sales incentives- Distributor saves- consumer saves $1, 500 • • • 34 $2, 000 More Bargaining power with manufacturers Manu > retailer partnership > Contractors > Consumer Escalating qualifications for incentives (manufacturers) and distributer 0% down for consumer? • No cost/ Low cost Loans? Utility owned > lease water heater • East Canada “Feebate”- cost for inefficient

Consumer vs. EE Metrics • Good – Baseline • Apple Products – add features, pay more • Temp/humidity - Hot water supply • Efficiency dependent applications • Energy Trust – Can’t bank until there’s a proven efficient unit • Seattle City Light • Committed but want to keep testing • Tiers were complicated with front load washers • Keep it simple • Have product recommendations 35

Task Force Group Discussion Areas we agreed to work on together going forward: *Finance *Technical *Products *Marketing *Contractors/Installers *Customers 36

Starting themes for sub-groups • • • 37 Northern Climate Energy Factor/Test Standards Manufacturer relations Customer messaging/positioning Contractor/distributor management Financing Lab/Field test coordination/collaboration Customer satisfaction Retail engagement Legislative support Other? ? ?

Products What We Know • Plumber- Current- What’s needed stats for business case > Entice audience • Regional Criteria • Create new business case • Where to focus- plumbers or retail? 80 -20 Rule creating marketing momentum • Leveraging distributors> best of best • Maintain Product flexibility all products considered- best will rise • Work with retail/ stocking staff Next Steps • Market research NEEA, ETO dist. data • Sharing out current RFP • Reach out to AHRI RFP Distribution/Consultant- make sure not duplicating utilities 38

Contractors/Installers What We Know • Pro- Active Code research- team effort • Training- Providers • Tech/Tiers • Manufacturer- (maybe before Tech Tier) • Streamline Installations • Opportunities for EE via installation • Customer satisfaction • Messaging infield consistent • Duct install- Union issues? • Recorded for webinar/ online opportunity • Audience- overlap messaging with retailers • Company incentives up to $200 - stocking/ overhead addressed Next Steps • ID threats and opportunities- local, state, regional, code • Work with tech- training purpose delivery, structure, content advisory committee • Consensus on structure upstream incentives 39

Tech What We Know • Additional testing- short testing profile- products Dual path NW and FED • How? • Metrics • COP • KW demand profile • 1 st hour rating • Variables • Temp/ Hum- space • Inlet water • Hot water Draw profile • Stand by losses- not so much • Apps- conditions, temp/ indoor/ outdoor space Next Steps • Work through draft of Northern Tier • Does this cover current needs • Draft of new test procedure> 3 apps • Create Test for product qualification/ application • Enough Data to create interim plan/ test 40

Finance What We Know • Big Box- “Simple, Instant” • Loan Programs- Larger Retrofit • Finance thru contractors for non. Retail buyers • Consumer Education> • Minimum upfront costs • Incentives- Main/ Dist. retail- ETO program good model- 2 tiers working together • Retail Associations- Vacations- Mileage etc. • Employer loan program pre- tax • Bundling- free install with appliances- GE Next Steps • Research best practices • Engage with retailers- 0% loan bundles with credit card offer • Consensus on regional consistency 41

Marketing What We know • Good – Better – Best with a regional approach • BPA – Class and region breakdown • HSPF Publishing Data • Caution around too many certifications/recommendations • NEEA Contractor Guide – Currently available to participants • Next Steps • Create Standard Survey - BPA 42

Customers What We Know • Tank Sizing • Messaging truth around downsizing • Survey results online- moderated • Approved Product list • Certified installer list- liability issues> addressed in training • POP- Labels specified • Mobile apps> Barcode info • Retail sales Training • Generic vs. NW Design • Tiers good/ better/ best General vs. NW • Bundling- Min overhead cost/ create incentives Next Steps • NEEA website - add layers of complexity- what products best for you/ region location info- where/ why 43

Next Steps 44

Remaining Bike Rack Ideas • • • 45 Can HPWHs reduce peak load for our region? Unit sales data capture – retailers, manufacturers, plumbers Joint Brown Bag – NEEA and BPA – pilot performance results What is Tipping Point for customers around rebates and incentives? Seattle City Light – data around installations Analysis of inlet water temps and humidity? Noise factor – solutions? Workshops for retail staff and their customers (e. g. Home Depot) Customer buying behavior – how to define? What can we learn from Japan or China? Buy HPWHs and give or lease to customers? Funding of further R & D

Near-Term Next Steps • • Post conference email Conduit • • Approved Product list - how to create Revise Website - Upload and revise data Contractor training piece Define Tier options for customer Collaboration with similar groups Retailers – Let’s hear from them directly Task Force sub-group progress updates via webinars • Survey • Link to Conduit for presentations, on-going discussion • Attendee emails/contact info Ø In-person Meeting - July? 46

Thank You! 47