Central Energy Savers

Submitted by Ben on Wed, 08/11/2021 - 16:02

In 2009, about a year after we'd moved into our house in Emporia, I decided to get a home energy audit so I would know what improvements would be cost-effective. The nearest firm was in Topeka. The auditor was very friendly and asked about my Web work, which I was doing all from home. He said that I should consider getting into energy auditing because the American Recovery and Reinvestment Act (ARRA) funds were about to hit the state, and Kansas was going to go big into energy efficiency programs, and because the work would make a nice change of pace from sitting at my desk at home. I said I'd consider it.

A few weeks later, the local tech college advertised that they would host a training program for energy auditors. The upfront cost was steep, but I decided to go for it. The trainers had been doing the work for about 10 years and stuck close to the textbook, as well as teaching directly to the software tool we would use and the state program we would be submitting our audits to. When the week in the classroom was done, there was also hands-on training with the tools we'd be using, and we were supervised for our first practice audit. The instructors would become our reviewers, checking our work before submitting it to the state.

We were encouraged to do more practice audits for family and friends before we started charging money, which turned out to be easy because the program took a while to actually get started. Four of us students from the class decided to start a company together while we practiced. We called it Central Energy Savers and incorporated as an LLC with the four of us as partners and myself as treasurer. Within a year Kerry and Clint had dropped out, leaving Bob Arndt and myself.

It wasn't long before we found some serious WTFs. A rusted-out boiler that was putting out 500x the allowable level of carbon monoxide in the garage attached to a day-care center. Ductwork in an attic that looked like it had been mauled by Wolverine. Wet crawlspaces with fans that ran 24-7, sending moisture up into the framing of the house to grow mold. A house with a spiral staircase hidden inside a child's play house, and a library with doors that disappeared into the bookshelves. Attics with pigeons, bats, rodents, and wasps.

Efficiency Kansas had been modeled on successful programs on the coasts and quickly became the model for other states' ARRA programs. In essence it was a revolving loan program where projected energy savings were the collateral for the loan. Even though the loan resulted in a lien on the house, the house was not the collateral, the projected savings were the collateral. We auditors were in the position of predicting how much energy could be saved if the improvements were made to our specifications, and verifying that the improvements got done correctly. We were working for the lender, but since all our interactions were with the borrower (homeowner), it was easy to get the feeling that we were working for the homeowner. The process went like this, as best I can remember:

  1. state of Kansas (funder) gets local utility (lender) to agree to participate in the program
  2. utility contacts homeowner (prospective borrower) offering to subsidize $400 audit for just $100 out of pocket
  3. homeowner contacts auditor, submits 1 year of past utility bills, and schedules audit
  4. auditor conducts detailed visual inspection, appliance combustion tests, and blower door test and collects $100 from homeowner
  5. auditor plugs data into computer model and compares its predictions to past utility bills
  6. auditor tweaks model until it more closely matches past utility bills
  7. model predicts savings from various home improvements
  8. auditor removes least cost-effective improvements from consideration until the combined package pays for itself with savings
  9. auditor submits computer model and recommendations to state for approval
  10. state approves recommendations and pays auditor $300
  11. auditor presents recommendations to homeowner with loan paperwork
  12. homeowner decides whether or not to apply for loan; if they don't, process ends here
  13. homeowner files loan paperwork with state and finds contractors to do work
  14. contractors make improvements to house
  15. homeowner follows up with auditor to inspect improvements
  16. auditor does another visual inspection and blower door test, calls contractors back to fix anything that is not to spec
  17. auditor plugs new values into model, generates new report, files with state
  18. state pays auditor another $200
  19. utility takes out a lien on the customer's house and collects loan payments on utility bills for the next 20 years

When this process worked, it worked well. By the time I finished my fifth audit through the program, I already had a satisfied customer who had completed the whole process and was saving money (which gives you an idea how slowly the program got rolling). Most of the homeowners chose not to proceed with the loan and just kept the report as guidance for making future improvements.

But by the time I had submitted twenty audits to the program, I had my first unsatisfied customer. Their improvements weren't done correctly the first time, so I had to come back multiple times to verify, and even then the savings were not as predicted. My obligation was to the lender, not the borrower, but I came back a total of four times (a round trip distance of 90 miles each time) to try to find why the house wasn't performing as predicted. I felt terrible, but I couldn't fix their problem, and it wasn't technically my problem.

If you have any experience with computer modeling, you may see cause for concern in step 6 above. We took careful notes of every aspect of the house and plugged the data into the model, but if the model didn't agree with the past energy bills, we had to adjust the model until it did. We had to submit a model to the state that predicted the past energy bills, whether or not it accurately represented the house we inspected.

Why would the model not accurately represent the house? Sometimes we probably missed details in our inspection, like walls that were insulated in one room but not another. Sometimes just because computer models aren't perfect. But sometimes the homeowners had already made improvements before we got there. That is, the house was already performing better -- and would continue to perform better in the future -- than the past year's bills reflected, and so the model based on the old bills predicted more room for improvement -- more savings, and therefore more collateral for a larger loan -- than there actually was. The result, if they went ahead with the loan, was a monthly payment that would exceed their energy savings. Other times the model was off in the other direction, predicting the house was better than it appeared, but we didn't feel as bad about that.

The process of tweaking the model to fit the bills was problematic, because we couldn't adjust any part of the house that we actually wanted to improve, or the predicted savings from that improvement would be exaggerated. So instead we tweaked features of the house we didn't intend to improve. For example, say I found no insulation in the walls, but the model didn't predict that insulating them would be cost effective. If the bills were lower than the model predicted, I might model the walls as high as R-30 (double thickness, overlapping seams) in order to get the model to match. On the other hand, if the bills were higher than the model predicted and the walls were already fully insulated (R-13), I might model them as uninsulated. The customer would never know, and the reviewers would look the other way, since they were the ones who taught us to do this!

If you have experience with government programs, you might see that there's a bottleneck at steps 1 and 2 of the process. Utilities were slow to get on board and slow to promote the program, which meant that most of us who had been trained as auditors couldn't afford to wait and had to move on to other work. By the time the program finally started to pick up momentum, the state legislature got impatient to spend the stimulus money and pulled it out to fund an ethanol plant!

All in all, I did about 100 audits through the program, and about 20 completed the process and got loans before the program was cut. I followed up with them a few years later to see if they were really saving money as predicted. Of those that got back to me, about half were saving more money than predicted, with the other half breaking even or paying more than we had promised. I think everyone involved had good intentions, but the field of "building science" was not well developed yet, and even if it had been, most of us auditors were insufficiently trained and equipped to make predictions as accurate as we were claiming. The people out there who are still doing energy audits today are a wiser and more experienced bunch than we were.