# Presentation: 708700

## Toward Market Transformation in the American Buildings Industry

- August 2, 2006
- Remarks by Jacques Beaudry-Losique
- Acting Program Manager
- EERE Building Technologies Program

**Notes:**
Market transformation is a huge undertaking.  In the buildings industry, which historically has been slow to adopt changes, market transformation can be even more daunting.
But I believe that transforming the way Americans think about buildings is crucial to our future energy security.  
Today I will update you on some of BTP’s plans for technology deployment.  I’ll also highlight the economic and political factors that are adding such urgency to our work.  
Together, I believe that DOE and the State Energy Offices can build on these drivers to accelerate market change.  What we are striving for is nothing less than victory in creating an energy-independent, energy-secure America. 

## Platform for Mainstreaming Efficiency and Renewables

**Notes:**
In a very real sense, zero-energy buildings will become the platform for integrating energy efficient and renewable technologies, and for bringing them into the mainstream.  And because they can be surplus energy generators, these zero-energy buildings will become an integral part of our nation’s energy assets – every bit as much as natural gas and coal are now. 
Imagine the extraordinary benefits that our nation will realize when these buildings become the norm in the marketplace.  Zero-energy buildings will make the United States a more energy-independent, energy-secure nation.  A nation that has plentiful supplies of electricity, that is more resilient in the face of natural and manmade disasters, and that is measurably less dependent on imports of natural gas than we would otherwise be.  

## Buildings: 

**•****	****71% of ****	****	****electricity**
**•****	****53% of natural gas**
**	****(primary consumption)**

- Source: 2005 Building Energy Databook with remainder equal to SEDS adjustment.

**Buildings: **
**The Place to Start**

## EE Driving Factors

- Rising **energy prices** (especially natural gas) and uncertainty about future price and supply
- Recent **disasters** at home and around the world
- The **Energy Policy Act** of 2005

**Notes:**
Key policy and market factors are intensifying the drive toward energy efficiency:
Major drivers are rising energy prices -- especially natural gas prices -- and uncertainty about future price and supply, which are spurring investments in energy efficiency. 
Recent catastrophes at home and around the world have resulted in a growing appreciation for the link between sound, energy-efficient construction and disaster-resistance in buildings.
And the Energy Policy Act of 2005 is an important driver, providing tax incentives for energy efficiency upgrades implemented in 2006 and 2007.

EIA Annual Energy Outlook 2005, net generation, per Table A8

- Constrained peak electrical capacity

**California experience:**
- Per person electricity use held in check since the 1970s
- Otherwise would have been 50% higher, at cost of $16 B per year

**EE Driving Factors**

**Notes:**
Another significant factor is constrained peak electrical capacity in many utilities, which drives them to seek ways to shave peak demand and defer the need for infrastructure additions. Efficiency and renewables are key parts of the solution.  
California has been particularly successful in using efficiency and renewables to keep electricity use in check on a per person basis since the 1970s.  
If California had not taken aggressive action on this front, it’s estimated that its electricity use per person would be 50% higher, at a cost of $16 billion per year.  
The example shown in this chart is a housing development in the Sacramento Municipal Utility District.  Houses depicted by the green line combine highly energy efficient features and photovoltaics, typically cutting utility bills at least 50%.  In contrast, look at the houses depicted by the blue line.  These blue homes are above code, exceeding California Title-24 cooling standards by at least 35%.  Yet look how much more effectively the green homes, combining efficiency and photovoltaics, are able to cut summer peaks.  With some energy management automation or utility signals, these homes can be designed to have a zero peak load when needed by utilities.

## Buildings EE Challenges

- The life of building stock is significantly longer than fleet lifetimes
- There is a significant “lost opportunity” cost in not creating highly   efficient new buildings
- Full life-cycle cost analysis would lead to significantly more efficient building solutions
- “Code” buildings are least performing buildings allowed by law

**Notes:**
These drivers are all working in our favor in market transformation – but we’re also up against formidable barriers.  The biggest barrier of all may well be the enormity of the built infrastructure itself, coupled with the long lifetimes of that infrastructure.  In contrast, transportation fleets turn over far faster, making overall efficiency gains possible on a shorter timeline.

So a big part of our challenge in market transformation is to help decision makers realize the significant lost opportunity costs they incur in NOT creating highly efficient new buildings.  There are lost opportunities on the policy front, in our quest to become a more energy independent nation.  And there are lost opportunity costs on a business basis.  Indeed, full-life-cycle cost analyses on virtually any residential or commercial building today would favor highly efficient building solutions on an ROI basis and also as a means of mitigating the risks of future energy price increases.  

In short, we need to get the marketplace thinking routinely of going well beyond code.  After all, code buildings are actually the worst buildings allowed by law.  The more people start thinking of code buildings that way, the more they’ll be spurred to look for better solutions.

## Building Technologies Program

**MISSION:  Develop technologies, tools, and techniques for making residential and commercial buildings more energy-efficient, productive, and affordable**

***GOAL:  Marketable net-zero-energy buildings by 2020***

| Funding (dollars in thousands) |  |  |  |  |
| --- | --- | --- | --- | --- |
| Activity | FY 2004
Approp. | FY 2005
Approp. | FY 2006
Approp. | FY 2007 Request |
| Residential Buildings Integration | 12,937 | 16,800 | 15,168 | 19,700 |
| Commercial Buildings Integration | 4,440 | 5,125 | 3,069 | 4,699 |
| Emerging Technologies | 28,286 | 31,420 | 33,055 | 32,756 |
| Technology Validation and Market Introduction (TVMI) | 0 | 0 | 0 | 8,249 |
| Equipment Standards and Analysis | 10,265 | 10,147 | 10,153 | 11,925 |
| Oil Heat Research for Residential Buildings | 494 | 493 | 990 | 0 |
| Technical/Program Management Support | 1,377 | 1,479 | 1,485 | 0 |
| Congressionally Mandated Activities |  |  | 5,346 | 0 |
| TOTAL | 57,799 | 65,464 | 69,266 | 77,329 |

**Notes:**
BTP has a four-pronged approach to advancing energy efficiency: 
We conduct R&D on building components and systems to continually raise the bar on performance; 
We implement demonstrations to validate performance of whole buildings and subsystems;
We carry out a mandated role in setting appliance efficiency standards and building energy codes; and
We conduct a variety of market transformation activities – in partnership with manufacturers, retailers, building contractors, universities, States, and others – to achieve maximum impact in the marketplace. As shown in the blue line, we have recently initiated a new cross-programmatic approach to technology deployment, led by the Technology Validation and Market Introduction team, or TVMI for short.  Today, I will highlight just a few areas where BTP and the States can collaborate to spur market acceptance of energy efficient technologies and practices.
All of these efforts target one overarching goal – achieving marketable net-zero-energy buildings in the United States by 2020. Zero energy buildings will cut energy use by 60 to 70 percent versus today’s standard practices, and use renewable sources such as solar to supply their remaining energy needs.  They will use zero energy on an annual basis – and may even return surplus power to the grid.

## The Path Forward

- Drive up technology performance and drive down costs
- Integrate within whole-building systems
**Market transformation:**
- Strategic, cross-Program efforts to accelerate market acceptance

**The Path Forward**

**Notes:**
How can we build on the momentum to encourage widespread market adoption of energy efficiency?
On the technology front, it requires working with partners on research, development, and demonstration projects that will drive up the performance of energy-efficient components and systems while driving down the costs.  It also requires an emphasis on whole-building, systems engineering approaches that optimize efficiency for specific climate zones and applications, and that integrate efficiency with renewable energy technologies.
To complement these technology development efforts, BTP is taking a more vigorous, strategic approach to market transformation.  

## States Have Critical Roles

- Recruiting and retaining state, local and regional institutions to participate in new initiatives
- Ensuring that technical and marketing materials reflect local conditions and needs
- Identifying and channeling grant (seed) money to appropriate projects
- Serving as a primary source of information on building energy codes

- States help define needs and execute BT program elements in the field:

**Notes:**
BTP recognizes that no one entity alone can even begin to transform the American building marketplace.  We must rely on good partnerships, and States are certainly a vital part of the mix.  Other key partners include representatives of the building industry; colleges, universities, and schools; architects, manufacturers, and retailers; utilities and energy efficiency partners; and national laboratories.
States play a key role in helping BTP connect with local players and ensure that program activities are reflective of local conditions.  BTP is also looking for ways to continue to support the States, while simultaneously increasing the cost-effectiveness, impact and sustainability of their efforts to promote BTP-priority programs, technologies and processes.  One of the ways in which BTP will be looking to do this is by encouraging a much greater degree of cross-regional collaboration between states on initiatives that use BTP-developed infrastructure to accelerate the introduction of advanced technologies to market. 

## BTP Stakeholder Charrette

**BTP Stakeholder Charrette**

- May 2006 in Washington, DC
- 54 participants
- Input captured for use in development of BTP deployment plan, scheduled for release in September

**Participants**
- Architects, manufacturers, retailers
- Building industry
- Colleges/Universities, K-12
- SEOs and programs
- Energy efficiency organizations and utility companies
- Building America partners

**Notes:**
To spearhead deployment efforts, BTP has recently formed a dedicated team to focus on cross-Program deployment efforts. This is the Technology Validation and Market Introduction team, or TVMI.  TVMI’s job is to make sure that BTP realizes the greatest possible returns on the taxpayers’ investments in technologies, by helping those technologies find the broadest possible markets. 
One feedback channel BTP created earlier this year was a forum among stakeholders.  Modeled after an architectural design charrette, the forum captured stakeholder ideas on which BTP deployment strategies can have the greatest possible impact on transforming the marketplace. 
Attendees from the West coast included: Maurice Kaya, from Hawaii; Janis Erickson from Sacramento; and Roland Risser from PG&E.
The information from the charrette will be of great value in forging and maintaining effective partnerships.  
An integrated BTP deployment plan will be released in September that will reflect inputs from the charrette as well as other stakeholder interactions.

## Inputs from States on Working with BTP

- Establishing a collaborative process with stakeholders to set goals and program metrics
- Improving program messaging and “success” stories
- DOE can help SEOs by developing outreach and marketing templates for use nationwide
- Conducting more transparent long-term planning by identifying the top five programs and integrating them through multi-year planning process
- Retaining capacity to ensure in-depth understanding of regional and State needs

**Eight SEOs attended May TVMI planning charrette.  Improved working model for BTP-State partnership identified:**

**Notes:**
On the whole, the eight State Energy Offices participating in the charrette raised some common issues about the ideal working relationship that would want to see between BTP and the States.  They recommend that the partnership include:
Establishing a collaborative process with stakeholders to establish goals and program metrics;
Improving program messaging and “success” stories – and in particular helping SEOs by developing outreach and marketing templates for use nationwide;
Conducting more transparent long-term planning by identifying the top five programs and integrated them through multi-year planning process; and
With the transition of the Regional Offices to the Project Management Centers, ensuring that the unique political and organizational issues of each State and region continue to be addressed.  

## Deployment Plan for Meeting Needs of States and Regions

- Developing regional planning mechanisms to ensure that needs, desires, and capacity of States are well understood and incorporated into the BTP program planning process
- Working more broadly with States to develop disaster mitigation and relief plans modeled on the Gulf Coast model
- Broad-based initiatives designed to accelerate the construction and/or upgrade of super-efficient buildings
- In any TVMI initiative, States and other regional stakeholders would help BTP define how best to deliver content to end users

**BTP TVMI team is drafting an implementation plan with States as critical partner.  Ideas under consideration include:**

**Notes:**
The issues and concerns of States are being considered carefully in the TVMI implementation plan.  These include:
TVMI is considering holding a series of regional planning meetings with States and other key stakeholders in each of the Building America climate regions to gather feedback on the TVMI initiatives, and identify implementation roles for the states and others. The Project Management Centers (PMCs) and DOE headquarters would be very involved in these meetings.
After the initiatives began, States would be part of an ongoing working group with the PMCs,  DOE and others stakeholders.  TVMI is also considering hosting an annual meeting of all TVMI stakeholders, at which States would play a key role.
In addition, TVMI is considering broad-based initiatives designed to challenge multiple stakeholders to work jointly with the building industry to accelerate the design, construction and or rehab of buildings to super-efficient levels – in the range of 50 percent better than code buildings.  States would play a critical role in helping to support and market this effort – and other initiatives -- to constituents within their States.

## Home Performance with ENERGY STAR

**NEED TO EXPAND PROGRAM NATIONALLY**

**Notes:**
Let me quickly review just a few programs and resources where we are looking for even stronger collaborations with States.

One program where States are very active partners is Home Performance with ENERGY STAR.  This jointly run program between DOE and EPA addresses energy efficiency improvements in existing homes.  It is currently deployed by local sponsors who report energy savings on average of 20% to 30%. Some homeowners are experiencing 60% in savings.

This map shows in blue the areas that have established Home Performance with ENERGY STAR programs.  Green shows the areas that are launching programs including the Energy Offices in Wyoming, Maine, and Delaware.  We also working with Energy Offices that are exploring Home Performance with ENERGY STAR – in Maryland and North Carolina.

We recognize the potential for energy efficiency upgrades in existing homes and work with State Energy Offices, utilities, and non-profits to become local sponsors of the program. To expand the program nationally, we are also working with a variety of retailers, manufacturers, and others as we explore ways to implement this program without a local sponsor.

## Building America Best Practices Series (15% energy savings)

- Building America Best Practices Series *(15% energy savings)*

_**http://www.eere.energy.gov/buildings/building_america**_

**Notes:**
Another program with significant opportunities for States is Building America.  This private/public partnership sponsored by DOE conducts research to find energy-efficient solutions for new and existing housing that can be implemented on a production basis. 
Building America emphasizes a systems approach to home performance, and considers performance and interactions of building structure, building thermal envelope, heating and cooling systems – all in the context of local climate.  I don’t have the time today to go into detail on Building America.  But I do want to make sure you are aware of this terrific resource – the Building America Best Practices Series – which provides detailed guidelines for home builders and buyers based on climate zone.  Volume 4, for the hot-dry and mixed-dry climate zones of the West, was released last September.  BT is currently repackaging the Best Practices guides to create outreach tools, and we certainly will be looking for your help in promoting this valuable information.

## Example of Partnership with States

**Disaster Recovery Trainings in Gulf Region**
- DOE partnered with SEOs, The Home Depot, and various manufacturers to sponsor consumer-oriented trainings that promoted BTP best practices
- SEOs played key role in helping to design and execute trainings
- Reviewed materials to reflect local needs and codes
- Notified local participants of trainings and identified good venues
- Worked with DOE Communications Office on media outreach
- Recruited key local partners such as utilities
- Result was trainings that reached thousands of citizens affected by Katrina at little cost to States

**Notes:**
A third example of the kinds of partnerships we seek to create with States relates to the hurricane recovery efforts.  DOE teamed State Energy Offices, The Home Depot workshops, and various manufacturers to sponsor disaster recovery training workshops in the Gulf Region.  Workshops were held in January and February of this year in New Orleans, LA; Biloxi, MS and Mobile, AL.  Additional workshops were held in Fort Myers, Florida, in June and a return engagement in New Orleans was held in July.  
The workshops were a good example of a low-cost/high-value role the States can effectively fill to help increase the impact of initiatives at the local level.  The participating States acted as the “convener” of local stakeholders to help them connect to this larger initiative. They reviewed materials to reflect local needs and codes, notified local participants and identified venues, worked with DOE on media outreach, and recruited key local partners such as utilities. State energy offices included the Mississippi Development Authority, Louisiana Energy Office, and the Alabama Dept. of Economic and Community Development.  Through this collaborative effort, nearly 5,000 homeowners were reached, and 95% said the trainings were useful to them. 

## States Key to Deployment

- Update on Solicitation
- $3.3 million solicitation
- 62 proposals received and currently being reviewed
- Announcement on selections anticipated in mid-August
- Goal: Find innovative ways to integrate BT deployment strategy with States – and for States to help deliver BT program regionally

**Notes:**
As you know, we have issued a $3.3 million solicitation to support innovative deployment strategy implementation at the State level.  We have received 62 proposals that are currently under review – and I want to thank all of you who were part of that tremendous response.  We anticipate announcing the selections in mid-August.

## 2007 Solar Decathlon

- Close collaboration between Solar and BT Programs --
- possibilities being explored are:
- Hosting architectural faculty workshop
- Hosting building industry day
- Presenting a building science award
- Timing Building America meeting to coincide
- Basic building science workshop with HUD
- Hiring architectural photographer
- Magazine and news articles to stress connections between renewables and efficiency

**Notes:**
I want to end today with a plug for the Solar Decathlon.  We at BTP are excited to be collaborating very closely with the Solar Program on the upcoming Solar Decathlon, to be held in late September 2007.  
Ideas currently being considered include:
Hosting architectural faculty workshop
Hosting building industry day
Presenting a building science award
Timing Building America meeting to coincide
Basic building science workshop with HUD
Hiring architectural photographer
Magazine and news articles to stress connections between renewables and efficiency

This will be the third Solar Decathlon – it was previously held in 2002 and 2005 – and I certainly want to acknowledge the University of Colorado as the Decathlon winner in 2002 and 2005.  They have been selected as one of the 20 competitors for 2007, and we are once again expecting great things.

## Toward Market Transformation in the American Buildings Industry 

- Thank you!

**Notes:**
Market transformation is a huge undertaking. 
But when so much rides on moving the market to the next level, we have to take it on.  And, it bears repeating.   We really are looking for nothing less than victory in creating an energy-efficient, energy-secure America. 
I’m pleased to be here with Tom Kimbus of the Solar area. As illustrated by the Solar Decathlon efforts, we’re working to integrate Solar and Building Technologies efforts even more closely in the future.  There is no question that getting to zero-energy buildings will require renewable technologies.  And, in turn, buildings are a significant channel for moving renewable technologies into the marketplace.
Both Tom and I look forward to learning how we can better work with the Western Energy Offices in the coming months and years.
I specifically look forward to working with you as BTP begins implementing our deployment plan this fall.  
Thank you.