Clean Energy Policu

Policy and energy issues are closely linked. We realize that you are spending your time running your business day to day. Our goal with these articles is to keep you most up to date about policies that will impact your business.

POLICY ACTION ALERT MASSACHUSETTS: Help Needed with The Most Important Renewable Thermal Legislation in the Country

I’ve been working on an important renewable thermal (oil elimination!) policy issue in Massachusetts. We’re making a lot of progress but need help from industry. Read below for more detailed information.

We have a hearing on July 16th and NEED to get support for the bill. Here’s how you can help:

1 – Do you work in one of these industries; solar thermal, air source heat pumps, ground source heat pumps, biomass, or biogas? Yes, see question 2.

2 – Do you live in an district represented by one of the members on the committee of telecommunications, utilities and energy (SEE THE BOTTOM OF THE ARTICLE FOR THE LIST)?

If the answer is yes to both questions, we need your help. Please email me at cwilliams@heatspring.com or call me at 917 767 8204 with any questions.

Here’s the full release

Action Alert from the Massachusetts Renewable Thermal Coalition

www.masscleanheatbill.org

IMPORTANT: IMMEDIATE ATTENTION NEEDED TO REACH OUT TO LEGISLATORS IN SUPPORT OF SB1593

A hearing will be held on SB1593, our bill to add renewable thermal energy to the MA Alternative Portfolio Standard, on Tuesday July 16 at 10 AM before the Joint Committee on Telecommunications, Utilities and Energy at the Massachusetts State House in Boston.

It is imperative before the hearing that advocates in favor of this legislation reach out to members of this committee before the hearing, AND URGE SUPPORT FOR THE BILL.  In particular, we need constituent contact to House members of the committee.

What You Can Do:

  • Please request a meeting, call or email the House members as soon as possible.  SEE COMMITTEE LIST BELOW.  This is especially important if you are a constituent of a House member.  Use this link to find contact info for your House member: https://malegislature.gov/People/Search
  • Let us know if you would like assistance arranging a meeting.  Let us know, in advance, of any meetings you arrange. One of us may be able to join you. We can also coordinate your meeting with other similar meetings.
  • A personal meeting is preferable.  A phone call or personal letter is also helpful.  Email is a last resort if no other communication is possible.
  • Use the talking points below to frame your communication.  Ask the member if they will support the bill.
  • Let us know what feedback you get following your communication.

Talking Points:

  • SB1593 adds renewable thermal energy technologies – solar, geothermal and biomass thermal – to the MA Alternative Portfolio Standard.
  • Heat represents one-third of all energy consumed in Massachusetts.  MA is among themost dependent states on imported and expensive fossil heating fuels such as heating oil or propane.
  • Renewable thermal technologies are ready for the market and can help MA reduce dependence on these fuels, and create new jobs by the growth of the renewable thermal businesses.  Due to high capital cost, they need support from the APS, much as renewable electric technologies receive support from the RPS.
  • MA cannot meet its aggressive greenhouse gas emission targets under the MA Climate Solutions Act without attention on thermal energy.
  • SB1593 will save ratepayers money by providing utilities with lower cost options to meet their APS obligation.
  • SB1593 is a logical extension of MA’s national leadership on renewable energy policy. SB1593 is good for the MA economy, and good for the MA environment.

Attachments:

Thank you for taking action to support SB1593.  If you have questions, please contact Jeff Hutchins at jhutchins@massforestalliance.org.

Joint Committee on Telecommunications, Utilities and Energy (JCTUE)

House Members (2013-2014)

 

Use this link to get contact info: https://malegislature.gov/People/Search

 

John D. Keenan (D) – Chair

  • Representative from 7th Essex
    • Towns include:
      • Salem

Mark J. Cusack (D) – Vice Chair

  • Representative from 5th Norfolk
    • Towns include:
      • Braintree
      • Holbrook – Precinct. 1
      • Randolph – Pct. 4

Jennifer E. Benson (D)

  • Representative from 37th Middlesex
    • Towns include:
      • Acton – Pcts. 3-5
      • Ayer – Pct. 2
      • Boxborough
      • Harvard (Worcester County)
      • Lunenburg (Worcester County)
      • Shirley

Tackey Chan (D)

  • Representative from 2nd Norfolk
    • Towns include:
      • Quincy
        • Ward. 1
        • Ward. 3, Pcts. 1, 2
        • Ward. 4, Pcts. 2, 4
        • Ward. 5, Pcts. 1, 3, 4, 5

Stephen L. DiNatale (D)

  • Representative from 3rd Worcester
    • Towns include:
      • Fitchburg
      • Lunenburg – Pct. B

Thomas A. Golden (D)

  • Representative from 16th Middlesex
    • Towns include:
      • Chelmsford – Pcts. 2, 3, 6
      • Lowell – Wards. 5, 6, 9

John J. Mahoney (D)

  • Representative from 13th Worcester
    • Towns include:
      • Worcester
        • Ward. 1, Pcts. 1-4
        • Ward. 3, Pct. 2
        • Ward. 9
        • Ward. 10, Pct. 1

John H. Rogers (D)

  • Representative from 12th Norfolk
    • Towns include:
      • Norwood
      • Walpole – Pcts. 1, 2, 6, 7

Walter F. Timilty (D)

  • Representative from 7th Norfolk
    • Towns include:
      • Milton – Pcts. 3-10
      • Randolph – Pcts. 1-3, 7-10

Randy Hunt (R)

  • Representative from 5th Barnstable
    • Towns include:
      • Barnstable – Pcts. 11, 12
      • Bourne – Pct. 1, 2, 7
      • Sandwich
      • Plymouth – Pct. 9

Leonard Mirra (R)

  • Representative from 2nd Essex
    • Towns include:
      • Boxford – Pcts. 2-3
      • Georgetown
      • Groveland
      • Haverhill
        • Ward. 4, Pct. 3
        • Ward. 7, Pct. 3
    • Merrimac
    • Newbury
    • Rowley
    • West Newbury
Posted in Clean Energy Policu, Geothermal Heat Pumps, Solar Thermal | Leave a comment

4 Trends Driving the Geothermal Heat Pump Industry in 2013

For a long time, the geothermal industry has assumed that if everyone just magically knew “how efficient” the technology is, that they would just adopt it. That is never going to happen. There’s many othervariables that matter much more than the system efficiency.

What will not drive the Geothermal Industry

  1. Continuing to recite over and over again how efficient the systems are. First, prove it. Tests performed in laboratory conditions and software models do not cut it. Real time monitoring is the only way to solve this.
  2. Second, homeowners only care about efficiency in how it impacts their savings. Translate efficiency into savings. No homeowner cares about COP.
  3. Economies of scale will not reduce installed costs. Similar to the solar thermal industry, geothermal is simply reconfigured commodity equipment. If the geothermal industry grew by 100x, the installed costs would drop slightly, but not drastically. The cost reduction would come from soft cost efficiencies, marketing, sales, lower margins can be accepted due to higher volume. We can’t rely on lower installed costs to drive our market.
  4. We do have the potential to reduce borehole length. Over the past 12 months, I’ve spoken with roughly 5 firms woking on better ways to install the ground heat exchanger that will shorten the loop. Not all of these technologies will work, but we need to be happy and welcoming to the firms trying to do push innovation. This is amazing, we need this innovation, and as an industry, we need to find a way to support these innovators as much as possible.

Here is what Can Drive the Geothermal Industry

Geothermal Trend #1 – State Policy Will Drive Adoption

In states that are heating dominated and using expensive heating sources, like New England, the policy is clear. Oil elimination. Sometimes called Renewable Heating and Cooling. Several New England States are getting bullish on this (NH, MA, ME, CT, and maybe VT), but we need to put gas on the flames.

Heating Policy

  • New Hampshire has established a thermal REC program
  • Vermont and Renewable Energy Vermont has established task forces to figure out how to achieve 90% renewable energy generation for all energy sectors by 2050.
  • Massachusetts has a yet to be released, pilot program of $6 million dollars for heat pumps and biomass that will be going into effect in 2013.
  • The Massachusetts DOER, with the help of Meister Consulting group,  has submitted to the legislature a report to the legislature on December 2012, outlining several policy measures that would help renewable thermal technologies.

Cooling Policy

In states that are cooling dominated, or states that are heating dominated but use natural gas and thus electric utilities are peaking in the summer, the policy to focus on is clear, peak demand side management for cooling in the summer.

Western Farmers Electric Coop put out a great article on their rebate program describing the impacts of ASHP and GSHP on demand side management. This case study needs to be the cornerstone of our policy efforts in cooling dominated areas. 

Why is this important and how does it impact your business?

  • If you’re serious about geothermal and it’s the future of your business, we need you to get active and help get policy through. Policy will not happen by itself, we need to push it. 
  • Getting policy in place in addition to the 30% ITC will make geothermal much more affordable to the general public. Cheaper equals growth.

Geothermal Trend #2 – Real Time Monitoring Can VERIFY Performance ans Reduce Risk for Property Owners

I wrote a full article on the subject that you can read here: Real Time Monitoring and Performance Based Contracts Are the Future of Geothermal

I’ll provide a little recap.

  • The top 50% of the best geothermal contractors now have the ability to double their business and put all of the fly-by-night geothermal installers doing horrible work out of business.
  • Performance based contracts remove risk from the property owner, making them more comfortable in the investment.
  • Real time monitoring will be required for production based incentives that New Hampshire has, and that other states are looking to create them.
  • Read more about performance based contracts here, how they could work, and what you’d need to add to your existing contracts to implement them.

Geothermal Trend #3 – Communications and Industry Research

The geothermal industry is currently run by contractors and engineers, generally speaking. We need to determine the best way to sell these projects and gather real data on the projects that we’re putting in.

  • Because our industry is still extremely niche, we don’t have a lot of data on it. This is hurting us from a policy perspective by making it harder to find allies, but also from a sales perspective. Not having a lot of data on existing systems increases the perceived risk to property owners. Here are a few questions we don’t have answers to:
  • How large is our industry?
  • How quickly is it growing?
  • What is the size, growth rates, etc in different regions and states? by customer category?
  • How many jobs does it employ?
  • How many dollars per dollar invested in the US, stays in the US?
  • What are average installed costs by region, by system type, by system size?

Geothermal Trend #4 – Fuel Prices Increasing

Exactly the same as solar thermal, installed costs will not be dropping, but fuel costs will rise, increasing the value of geothermal output.

It’s clear oil, propane and electricity costs will continue to increase, there’s growing evidence natural gas prices will also increase. Here’s the logic behind gas prices increase.

The low cost of natural gas has created trends that will increase demand, and cost, 1) exporting the gas, 2) converting coal power plants to gas, and 3) light truck usage.

Deborah Rogers has done some amazing research on the shale gas bubble, why gas producers are loosing money hand over fist, and why prices will likely be increasing over the next few years. More more about the shale gas bubble here.

Posted in Clean Energy Policu, Geothermal Heat Pumps | Tagged , , , | 1 Comment

ASHP vs GSHP and The Importance of SEER and EER in Utility Air Conditioning Demand Side Management Programs

The following post is by Mark Faulkenberry, Manager Marketing & Communications and Kalun Kelley, Commercial and Industrial Marketing Manager, both with Western Farmers Electric Cooperative. 

The post was originally published on Geoexchange, but because it’s so awesome, and uses specific data, I wanted to republished it on HeatSpring Magazine. This post goes into very useful data that the geothermal industry must use whenever speaking with municipal and co-op utilities about their HVAC rebate programs, especially because even Northeast utilities are peaking in the summer. It was reprinted with the authors permission.

Enter Mark

The Seasonal Energy Efficiency Ratio (SEER) has been the federal efficiency metric for residential air conditioners since the late 1980s.  On January 23, 2006 new federal standards increased the minimum (SEER) requirement for central air conditioning equipment from 10 to 13.  These revised standards required air conditioning equipment manufacturers to build their new units to the higher SEER rating level and also created a marketing race to develop units that exceed the minimum standards.  Because the Federal standard is based on SEER many utilities have also based their efficiency program incentives on SEER.  Manufacturers have responded by focusing their efforts on building units that have high SEER ratings.  Unfortunately, this has resulted in overlooking the Energy Efficiency Ratio (EER) which provides a more accurate measure of the peak demand impacts of cooling equipment.

Seasonal Energy Efficiency Rating (SEER) based utility demand side management incentive efforts including loans and rebates provided for residential central air conditioners and heat pumps to encourage improved cooling efficiency may directly hurt utility load factor by reducing kWh sales without a corresponding reduction in peak demand.  This is because SEER provides a reasonable measure of seasonal energy efficiency but it does not reflect efficiency (and related peak demand) on peak load days driven by above average temperatures.  In fact, it is not uncommon that air conditioning units with the highest SEER ratings have lower efficiency (and higher peak demand) at high outdoor temperature than units with lower SEER values.  If a utility’s goal is to reduce air conditioning kWh consumption without regard to peak demand, SEER is a useful tool.  However if the utility’s goal is to reduce peak demand from air conditioning loads, the utility planner must look at the Energy Efficiency Ratio (EER) of air conditioning units at the expected summer peak weather (outdoor air temperature) condition.

It is also important to note that When ARI certifies the SEER rating of an air conditioner; it does so for specific indoor and outdoor unit combinations, which are designated as “matched assemblies.” If some combination other than the ones ARI has tested is installed, the SEER rating will not be known.

Introduction to SEER, EER, and COP

SEER (Seasonal Energy Efficiency Ratio)

SEER was developed to provide a proxy for the expected average efficiency of an air conditioner or heat pump throughout an average cooling season in the U.S.  It is a calculated value that uses the estimated Btus that will be provided for cooling over the year divided by the estimated watt-hours that will be used to provide this cooling (Btus/watt-hours).  The formula for this calculation is based on measurements of a unit’s performance at several different operating conditions/temperatures in a testing lab.  The resulting data points are then used to calculate the SEER rating using an established Department of Energy (DOE) protocol.  This calculation protocol was developed to represent the expected total cooling energy delivered by the unit during an average cooling season and the total electric energy that would be consumed to deliver the cooling over the course of the season.  Because it is a calculated value based on a few measurement points, SEER does not measure peak load efficiency and it cannot be used to predict a unit’s peak demand requirements on the hottest days of the year.  It can only be used to estimate the unit’s annual cost of operation against other units with different SEER ratings.

EER (Energy Efficiency Ratio)

The Energy Efficiency Ratio was developed to indicate the cooling performance of an air conditioner or heat pump at a single, fully loaded operating point (outdoor air temperature).  EER is calculated by dividing the cooling output of a unit in Btus over the course of one hour (Btu/hour) by the peak electric energy (watt) used to deliver the cooling ((Btu/hour)/watt).  Consequently, EER represents the peak cooling capacity divided by the electric power input during steady state continuous operation.  EER is typically measured and reported at standard test conditions of 95°F outdoor and 80°F indoor dry bulb temperatures using the Air Conditioning and Refrigeration Institute’s (ARI) test procedures.  It is important to note that the published EER data does not represent the peak demand conditions on an individual utility’s system.  Many utilities have peak conditions above 95 degrees and many consumers keep their homes well below 80 degrees.  Consequently, industry EER ratings are good for comparing the relative peak performance of different cooling equipment but the EER rating of a unit at the expected indoor and outdoor air temperatures must be used to calculate the true expected peak demand of the unit on the utility’s peak load condition.  It is possible to estimate the actual peak demand of a unit using published EER values.  For every 1°F change in outdoor temperature above 95°F the EER drops by approximately 0.1 (an outside temperature of 105°F would drop the published EER of a unit by 1.0 point below the listed EER value).  An accurate EER can only be developed by testing a unit at the expected indoor and outdoor air temperatures.

SEER and utility rebate programs

SEER based utility program incentives including loans and rebates for central air conditioners and heat pumps can directly hurt a utility’s financial position by inadvertently ignoring peak demand impacts.  Because air conditioning is often the biggest component of a utility’s summer peak, it is important for utilities to consider the peak demand impacts of its demand side management programs.  If peak capacity is not an issue for the utility, SEER is a good measure for efficiency programs.  If demand reduction is important to the utility, using SEER can result in utility program investments that do not provide peak load reductions because SEER provides a reasonable measure of seasonal energy efficiency but does not reflect peak demand when load is driven by above average temperatures.  In fact, it is not uncommon that the units with high SEER ratings have lower efficiency at high outdoor temperature than units with lower SEER values.  Efficiency programs promote SEER because it is the basis of the Federal efficiency standard and the rating data is readily available.  These efficiency efforts were not developed to focus on the peak load issues that are becoming a critical issue for utility resource planners. 

EER and Utility Rebate Programs

If demand reduction is an important consideration for a utility’s Demand Side program, the utility must specify the equipment EER it requires at its peak load/outdoor air temperature condition to be eligible for loans, rebates, or other program incentives.  Manufacturers of air source equipment are often reluctant to provide this information.  While Manufacturers are not required to certify the EER values of their equipment, most do publish their standard EER values in their central air conditioner and heat pump catalogs.  Fortunately, the California Energy Commission also publishes a directory that lists both the SEER and EER for many, but not all, air source cooling equipment.

EER and Ground Source Heat Pumps 

Ground source heat pumps (GHPS), also called geothermal heat pumps or GeoExchange systems, are a unique heating, cooling and water heating technology that use the steady state ground temperature for their operation.  These systems combine the compressor and energy distribution components associated with air source heat pumps with a ground loop that dissipates the heat removed from a building into the earth (where it can later be used for winter heating). Their cooling efficiency is measured in EER at an established entering water temperature.  Because the ground is always cooler than the surrounding air during peak air conditioning loads, GSHPs will always provide a higher EER and lower peak demand per unit of cooling energy delivered vs. air source equipment.  This is one of the reasons GHPS are the most energy efficient, environmentally clean, and cost-effective space conditioning systems available, according to ENERGY STAR (a U.S. Department of Energy and Environmental Protection Agency initiative).  The heat captured from air conditioning using a GSHP can also be transferred into the domestic hot water system, further increasing the EER of the system.

Western Farmers Electric Cooperative as a Case Study

The Western Farmers Electric Cooperative (WF) has been operating for nearly 70 years as a generation and transmission cooperative that provides essential electric service to 19 member cooperatives in Oklahoma, 4 cooperatives in New Mexico and the Altus Air Force Base.  WF supplies the electrical needs of more than two-thirds of the geographical region of Oklahoma, part of New Mexico, as well as small portions of Texas and Kansas.

By the end of 2012, over 15 percent of WF’s total annual electricity production will come from power purchase agreements with wind farm generators in Oklahoma.  WF also has five natural gas and coal generating facilities with a total power capacity of more than 1,700 MW including some purchased hydropower. WF owns and maintains more than 3,600 miles of transmission line to more than 265 substations.

To balance its supply portfolio, WF established an aggressive goal of avoiding the construction of 30 MW of new generating capacity by 2017, through peak demand savings.  The G&T staff was provided a$1,000,000 annual budget to meet this goal.  While this budget is large by any measure, the 30 MW of new generation is expected to cost $1,850/kW, or $55,500,000.  This value does not include interest costs, O&M costs associated with the generation, and the capital costs of the related transmission and distribution needed to serve the additional load.    Because WF does not operate under mandates to meet reduced kWh “conservation” requirements, its efforts are focused on reducing peak capacity requirements and improve their overall system load factor and efficiency.

WF’s management was clear in establishing that they wanted a reasonable ROI that would take into account the net difference between reduced energy sales, capacity reduction and the value of numerous other factors including carbon offset, long term interest expense, and consumer and member cooperative value calculations.

Given these directions, WF established a rebate program for both air source and ground source equipment.  They looked at program development like sighting in a rifle. They would load it … start shooting … and zero in as they went.  Their initial rebate effort relied on EER for ground source and SEER for air source.  However it didn’t take them long after evaluating the results of their 2010 program to understand that they had to drastically modify their program if they hoped to achieve their peak reduction goal.  Their original savings projections per ton of equipment installed are shown below:

Original results projections                                       ASHP                        GSHP

Projected kW reduction per ton rebated               0.33 kW                  0.66 kW

2010 results kW reduction/ton rebated                0.16 kW                  0.65 kW

Their 2010 program results analysis also revealed the following:

  • Approximately 80% of rebates where on Air Source equipment and 20% were on Ground Source
  • 92% of rebates where on replacements (equipment failure) and new construction
  • 8% of rebates were on planned retrofits (pre-failure)
  • The original rebate program had an extremely long ROI on Air Source rebates compared to a relatively short ROI on Ground Source rebates. In several cases the ROI on air source installations exceeded the expected life expectancy of the air source equipment
  • In many cases the new (rebated) air source equipment had decreased energy sales without reducing peak capacity requirements

As WF probed to understand why their air source demand reductions fell so short of the expected results in 2010, it became apparent that the negative result was due to the difference between the equipment’s actual Energy Efficiency Ratio (EER) on peak load days when compared to the published Seasonal Energy Efficiency Ratio (SEER).  What really opened their eyes was that the EER on even the higher SEER systems was horrible compared to those on Ground Source systems, which met their expected EER on peak load days.  The WF analysis, based on a sample of measured data, showed that the high SEER rated equipment had a poor EER during the record breaking heat of the 2010 Oklahoma summer when temperatures were over 100 degrees for days on end and hit 110 degrees in the middle of August. This got them to adjusting their program design rifle scope!

For 2012 (and beyond)  WF thought about completely eliminating their Air Source rebates due to the low peak contribution obtained from this type of cooling equipment, but opted instead to abandon SEER as a program rebate metric and to increase the EER requirement of rebate eligible air source equipment.  While they would have preferred to have this EER based on 100 + degree (f) outside air to reflect peak load conditions, the inability to find this data forced them to continue to look at EER at 95 degrees.  They will reevaluate this decision based on 2012 unit performance under the new EER requirement.  WF also came to the conclusion that if were to achieve their 30 MW peak demand reduction goal, they would have to focus on flipping the 80/20 Air Source to Ground Source installation ratio experienced in 2010 to 80% Ground Source.  Their 2013 demand reduction Business plan will also focus on addressing the following hurdles that must be covered to achieve that ratio flip mentioned above.

  1. Ground Source System Retrofit Costs
  2. Commercial and Residential Member Education
  3. Addressing Urgency Issues (time needed to address system failures)
  4. Changing the Target Market for Ground Source by Making it a Common Retrofit Opportunity

In conclusion, Western Farmers Electric Cooperative has learned a few things over the last couple of years regarding HVAC efficiency ratings (SEER vs. EER).  Based on the wisdom acquired through the first two years of the program , they plan to continue to provide rebates and other member incentives for their Energy Efficiency Rebate Program (EERP) going into 2012 for all Distribution Cooperatives (Co-ops) in Oklahoma and New Mexico. This program was designed to promote efficient use of energy with the long-term goal of reducing approximately 30 megawatts (MW) of future capacity.  A few changes have been made for 2012, including a focus on peak day cooling equipment performance based on EER, an increased focus on increasing peak equipment performance awareness, and improved ways to educate their member Co-op’s consumers and promote energy efficiency.  Their initial focus, centered on heating, ventilation and air-conditioning (HVAC) equipment with rebates being offered for the installation of both Ground Source Heat Pumps (GSHP) and Air Source Heat Pumps (ASHP) that meet specified efficiency ratings will continue.  They also want to continue the support for education and incentive opportunities for the installation of proven technologies, such as the Ground Source Heat Pumps, that also provide “Green” environmental benefits.  Continuing this effort will help improve the heating and air conditioning energy efficiency of their Residential and Small Commercial rate classes, while reducing peak demand costs.  They will also work closely with each of their member Co-op’s to gather the data needed to justify and modify the program as it moves forward so that it will benefit the entire WFEC family.

Posted in Clean Energy Policu, Geothermal Heat Pumps | 3 Comments

How New England Can Eliminate Oil Use For Single Family Homes for Less Than We’re Spending on Solar PV

I first published this post in Renewable Energy World and it received a lot of comments, mostly getting into all the silly technical details of geothermal and not addressing how to implement policy to eliminate oil use. My hope is that any conversation on HeatSpring Magazine that comes from this can be about implementing policy. The article was also republished on Alternative Energy Stocks and Free Hot Water blog. My conclusion from this is simple, catchy headlines and being really specific about the argument in the meat of the article by using real numbers, backing those numbers up with logic and calculations is extremely powerful. The other lesson is that people really hate oil, and heat pumps along with biomass are the most proven technologies to eliminate a lot of oil use, nothing new needs to be invented, it’s just policy. 

Here’s the post

We can use simple, effective, and proven policies that have been used to supercharge the New England solar PV industry to incentivize renewable thermal technologies and eliminate oil use for single family homes. Here’s the best part, the policies will be cheaper than solar PV, they will create more local jobs per kW installed and displace more expensive fuel.

At Renewable Energy Vermont 2012, I delivered a presentation on how a production-based incentive for renewable thermal technologies, like the $29/MWh incentive in New Hampshire, would be cheaper than the current solar PV incentive in Vermont and could have a larger impact. The current incentive for solar PV in Vermont is $271/MWh for 25 years, but we could eliminate oil use for single family homes with a policy for renewable thermal technologies of $100/MWh guaranteed for five years. This policy would be much cheaper than the solar PV incentive and would drastically increase the adoption of biomass, air source heat pumps and ground source heat pumps. It would put a huge dent in oil consumption for single family homes, save money and create local jobs. If you’re new or curious about thermal incentives, Renewable Energy World has done some great reporting on it.

As I started to run the numbers when I was creating the presentation, I was blown away by how much energy renewable thermal technologies produced, and how valuable that energy is when displacing oil, propane and electricity. Many attendees at the talk had never seen the numbers broken out in a way that easily compares apples to apples. However, as any engineer knows, converting kWs to tons to BTUs is relatively simple. When we compare these technologies in the same terms, it starts to provide a very clear picture of the results that can be achieved by investing in proven renewable energy thermal technologies. These technologies include solar thermal systems, geothermal/ground source heat pumps, air source heat pumps, and biomass.

For the purpose of this article, I’m going to compare solar thermal and ground source heat pumps to a standard solar PV project in a baseline home. I’m using these technologies because I’m the most familiar with them. However, further analysis should absolutely include air source heat pumps and biomass technology.

Background: Why look at renewable thermal technologies?

We waste a lot of money on oil for space heating. Yes, oil industry, my goal is to put you out of business. But don’t worry, we’ll train you to install these new technologies. In addition to building and retrofitting buildings to have tighter shells, there are only three technologies, yes three, that can eliminate on-site fossil fuel use: biomass (pellets and cord wood), air source heat pumps, and ground source heat pumps. Here are a few pieces of data on why a focus on oil usage is so important for New England.

The EIA separates the US into five energy regions.

The Northeast uses the most oil for space heating, which also happens to be an extremely expensive fuel source. Six million homes use oil for heat, and the average home uses 800 gallons of oil per year, which equals roughly 4.8 billion gallons per year.

If we assume that the average residential price is $4 per gallon or slightly higher, home oil-heat spending is roughly $20 billion dollars per year.

These are huge industry trends, so let’s break the data down into something more tangible. U.S. census data reveals the number of single family homes in each specific state, this is the “total homes” column. I then broke down the heating fuel mix for each state, provided by the EIA, and found the number of single family homes in each state that use a high-cost fuel (oil, propane). You can see that the numbers are sizable. I then took the total number of homes and divided it by the number of homes using an expensive fuel source, which you can see on the far right. This means that nine out of 10 homes in Maine are using a very expensive fuel source. In Massachusetts, 54 percent, or five in 10 homes, use these sources.   However, Massachusetts-specific data reveals that some communities use natural gas (that’s green). However, there are a large number of communities where 60+ percent of single family homes use an expensive fuel source.

Solar PV is a great investment but doesn’t address oil use — how can we address this problem?

The goal of this post is to show how we can use policies and incentives that have already been successfully implemented in the solar PV industry to address fossil fuel use for space heating in New England. I’ll provide a basic comparison of how solar pv and renewable thermal technologies compare when looking at fuel savings for property owners, direct job creation, and the cost of the incentive.

With that said, let me be clear: solar PV is a great investment. The purpose of this post is to be a “yes…AND”conversation. Solar PV will do nothing to address direct fossil fuel use. Additionally, the solar PV industry is large enough to be a great comparison tool because many people are familiar with the economics of solar PV. Thus, using solar pv as a baseline will make it easier to communicate the value of other technologies.

I’m also looking to address a question I recieve often: If geothermal heat pumps are so great, why aren’t more people using them?

How do we look at renewable energy policies?

When trying to understand renewable thermal technologies and the impact of different policies, a small number of variables seem to be critical for policy makers.

  1. Reduction in utility bills for property owners and reduction in fossil fuel use that is imported
  2. Local job creation
  3. Amount that said incentive costs for the state or utility
  4. Water quality and air quality issues
I could be missing something here, so let me know if I am.

Let’s create a baseline home for comparison purposes.
This is the home we’ll be dealing with. If you’re not into the technical part of things, please feel free to skim over this, I just want to be extremely clear with my methodology and calculations. If anything is unclear, please let me know; I’ll be happy to address any questions.
  • 2,000 square feet
  • 180 degrees
  • 10 pitch roof (40 degrees) — enough space for a 5-kW system.
  • Requires 63MM BTU for heating (read average shell)
  • Existing heating system is oil furnace with AC that must be replaced within two years. Replacing the existing oil furnace and AC unit with the same technology will cost $10,000.
  • Electric rate is $.17kWh inflating at 3 percent per year
  • Oil prices are at $4.00/gallon inflating at 5 percent per year
Let’s create a baseline with diferent technologies based on current installed costs, incentives and energy costs for an average home.
1. Solar PV
  • $5.50 per watt times 5 kW = $27,500
  • For those of you who think this is high. Think again. Read more on residential prices in Massachusetts at The Open PV project and the MA CEC’s website. Also, I have no reason to make solar PV seem high, I love the technology am a huge supporter of it.
  • Produces 1,000 kWh per kW installed = 5,000 kWh or 5 MWh
  • Value of energy is $850
  • Local jobs created: 15 man hours per kW installed –> 75 man hours (does not include sales, support and supply chain jobs, just direct construction jobs)
  • Percent of year installed costs driven by rebates: 44 percent
  • Gross installed costs to value of energy: $32
  • Net installed cost to value of energy: $19
  • 20 Year IRR, not considering equipment lifetime or O+M: 9 percent

2. Solar Thermal

  • $110 per square foot gross installed costs
  • 80 square foot system (2 modules @ 40 square feet per module)
  • Gross installed costs = $8,800
  • Net energy production per year: 4,100 kWh (140 therms)
  • Value of energy production displacing #2 heating oil = $443 (140 therms is approximately 110 gallons of fuel oil)
  • Local Jobs Created: 20 man hours per module (this is based on anecdotalle experience not an industry study, because they don’t exist) = 40 man hours.
  • Incentives in Massachusetts: ITC, Personal Tax Credit, MA CEC Cash Rebate
  • Percent of year one installed costs driven by rebates: 62 percent
  • Gross Installed Costs to value of energy: $20
  • Net installed costs to value of energy: $7.50
  • 20 Year IRR: 12 percent

3. Geothermal

  • Oil and AC replacement costs = $10,000
  • Geothermal costs = $9,000 per ton X 4 tons = $36,000
  • 4 ton = 14-kW system
  • Geothermal premium = $26,000
  • Oil heating costs = $3,000
  • Geothermal heat costs = $1,000
  • Geothermal Fuel Savings = $2,000
  • Net geothermal energy production from the ground loop = 13,500 kWh
  • Incentives: 30 percent ITC from $36,000 = $10,800
  • 90 man hours per ton = 360 man hours for the job (25 percent of installed costs is labor: $36,000 X .25 = $9,000, and $1,000 is a week’s wage for 40 hours, so nine weeks work * 40 hours = 360 man hours / 4 tons)
  • Percent of year 1 installed costs driven by rebates: 41 percent
  • Gross installed costs / value of energy: $13
  • Net installed costs / value of energy: $7.6
  • 20 Year IRR: 14 percent

For those of you that love tables, I’ve put the data on a table as well.

Conclusions

There’s a lot of information in the above graph, so I made a few simple graphs that display and answer some specific questions.

Installed Cost per Watt

Geothermal costs roughly $2.57 per watt, while solar thermal costs $3.96 and solar PV is around $5.50. Yes, a lot of residential solar pv projects still cost $5.50 per watt. You may be able to reduce this to $4.00 per watt on new construction, but this trend is decreasing.

Energy Production per Installed kW

Solar PV generally produces 1,000 kWhs per year for every 1 kW installed. An average geothermal system, running at COP of 3.75 delivering 63MMBTU will produce 13,500 kWh net energy from the ground loop annually, backing out the electric use for the pumps and compressor. A 4-ton system is 14 kW, so it produces slightly less then 1 kWh of net energy for every 1 kW installed. The solar thermal system is only a 2.22-kW system, but will produce 4,100 kWh of energy in one year.

Gross Invested Cost per Dollar of Energy Output

This metric is simple. Without considering any incentives (using just gross installed costs), how many dollars need to be invested to get $1 in fuel savings? Geothermal and solar thermal are clearly the winner here when displacing fuel oil. If they were displacing propane or electric they would be higher.

Gross Installed Cost to Net Installed Cost: How much do incentives drive returns?

This metric looks at how much incentives decrease installed costs by taking the gross installed costs and dividing them by all available incentives. What we see is that in Massachusetts, solar thermal is the most heavily subsidized technology, followed by solar pv and geothermal.

Net Invested Cost per Dollar of Energy Output:

After incentives are considered, we can look at the net energy investment required to get $1 in energy savings. Solar thermal and geothermal become more equal at $7.60 and solar PV is around $19. This means that to replace oil with a geothermal project in Massachusetts, you need to invest $7 to get $1 in fuel savings in year one.

Total Man Hours Needed per Job

This is looking at the total direct construction jobs to install a project. This is not based on any reports (because they don’t exist for solar thermal and geothermal), but anecdotal evidence. A typical 4-ton geothermal system will require 360 direct man hours in construction, and a solar thermal system will take 40 hours, and a solar PV project takes around 75 hours.

Direct Jobs Created per kW Installed

When we look at direct man hours per kW installed, geothermal and solar thermal create the most jobs, followed by solar PV. The reason for this has to do with the type of equipment being used. For geothermal and solar thermal technology, commodity equipment is used and repackaged in a different way. Components for these technologies aren’t industry specific, except for the actual solar thermal modules and geothermal heat pump, but these are easy to manufacture and thus there are many manufacturers. For the solar PV industry, all main components are specialized: modules, inverters and racking. Thus, equipment costs tend to make up a larger percentage of the installed costs. However, this is declining as economies of scale are reached on the manufacturing side of the business.

20-Year IRR with Current Incentives and Assumptions

This graph shows what the 20-year IRR of these different projects is with our given assumptions. Yes, the IRR of solar PV is getting much lower as installed costs drop and property owners see it as low risk, but also because Massachusetts SREC prices are declining. Geothermal is around 13 percent and solar thermal is around 12 percent.

20-Year IRR of All Technologies Received SRECs

This graph is answering a question I frequently hear: If geothermal is so amazing how come more people aren’t doing it? My answer is simple: If geothermal received the same REC prices as solar PV, no one would be using oil, geothermal would just be cheaper. So, if we assume that geothermal and solar thermal get paid $200/MWh for 10 years based on their output, their IRRs skyrocket to 30 percent.

Lessons earned and what implication does this have for policy in New England?

There are a few lessons we can learn from this analysis.

First, renewable thermal technologies can provide as good or better returns than solar PV technologies for property owners.

Second, renewable thermal technologies need more policy support, but they do not need as much support as solar PV. As you can see, a 30 percent IRR is too high. This is good for policy makers because it means that the cost of deploying renewable thermal technology will be CHEAPER than deploying solar PV. Renewable thermal technologies are cheaper and produce more valuable energy per kW installed, so more of the returns can come from displacing fuel than from a subsidy.

Third, renewable thermal technologies create more construction jobs per kW installed than solar PV.

Fourth, if we’re serious about incentives for renewable thermal technologies, we must use production-based incentives. Production-based incentives maintain quality control throughout the entire process: manufacturing, design and installation. A huge lesson learned in the solar PV industry is that incentives based on installed costs have huge flaws (installing solar PV projects in the shade is one example). Those modules on the left in the photo below will still receive a rebate even though they won’t produce must power.

Fifth, if any policy makers reading this happen to live in New England, my message to you is simple:  If you’re bullish on the solar PV industry and believe that it’s a wise investment in terms of job creation, reducing emissions and saving property owners money, you should look into renewable thermal technologies as the next area of rapid growth. If you’re looking for the next technology that is going to create a huge number of jobs in your state and save a massive amount of money, you must look at renewable thermal technologies.

If you want to chat, I’d be happy to. Here’s my contact information: cwilliams@heatspring.com, 800-393-2044 ex. 33.


 

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Massachusetts = Large MW+ Solar Projects and Low SREC Prices In the Near Future

I enjoy getting policy and finance updates at conferences from people who spend all day thinking about policy and finance. The 2012 Renewable Energy Vermont conference was no different.

I also learned some great lessons about a community solar development in Vermont. 

Jason Gifford from Sustainable Energy Advantage gave a great presentation that focused on the impact that current and new policy is having on the renewable electric generation market in both pricing and project size, with a focus on wind and solar pv projects. He had some amazing graphics and numbers to show what’s  happening in the solar pv industry.

Here are a few highlights.

  • Jason is anecdotatally seeing long term SREC prices for $175/MWh in MA and PPA prices for between $60 and $100/MWh
  • CT solar < 250kW is getting prices at $148/MWh
  • Most recent winning bid in Rhode Island was $209/MWh for 1.5MW project
  • The development pipeline in Massachusetts is clearly way too large and unsustainable
  • I’d encourage you to go through his presentation below.

 

I followed up with Jason to get some more insights on a few points.

Can you comment more on the current “long term” SREC Prices in slide 6?

  •  $175 comes from daily broker quotes.
  • The market is not terribly liquid and we don’t know if that strip is based on 300 data points, or 3 points.

Are prices being driven by a large amount of projects with debt obligations that need to sell their RECs to meet those obligation or are there a large number of projects that are holding onto their RECs for the long term?

  • Debt is a factor, as projects must prioritize paying off debt obligations. However, I wonder if this is just a factor of the sample size that we’re seeing. Large projects could have more debt, so they need to sell, however large projects may also be less likely to be sell through brokers. The broker market is not an even sampling.
  • Sol Systems has offered a 10 year contract at $200/MWH, but it’s not bankable by their own admittance.
  • Developers financing on balance sheet or without leverage have a different profile.  They can sit on their RECs until the market is short and then sell them at a high price. Utility owned projects could hold SRECs for a long time as well. The cash flow implications are important, this is what forces people to sell because they can’t sit around and wait for the market to clear.

When will the market have more transparency and clear information?

  • As I see it right now, I’m not going to be able to quickly say we’re going to have more transparency in the near term, but we will have more experience. Specifically, how the auction responds when a lot of SRECs have been deposited. I think next year’s market will be educational, because the market will be long and supply will be much higher than demand.

Do you think the Massachusetts floor price is shot? Do people have any confidence in it anymore?

  • There may be another awakening next year, when other people realize that the floor is not really the floor. But I’m hopeful that a lot of participants have picked up on this by now.

Looking at slide 12, what will be the impact of huge projects dominating the pipeline be on the market? Was this the goal of policy or an unintended consequence?

  • I think the rate at which the interconnection requests have been growing is not sustainable. If you look at the interconnection queue, many MWs per month are added, sometimes 10MW per month. This is not sustainable over a multi-year period.
  • Regarding policy, because of the SREC program and changes in net-metering caps that allow 1MW+ project, unless something changes, this will likely be a continued trend and 1MW will continue to be a huge part of the mix in Massachusetts. The policy and the market are set up to encourage larger projects for quite some time.
  • Net metering 10 years ago was 50kW, the fact that Mass has gone to 2MW for net metering has played a significant role in driving the solar market. This has not yet been replicated around the country. There will be growing pains for sure, but the policy should be expected to drive big projects.
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State-by-State Comparison of Geothermal Heat Pump Legislation

I want to thank John Rhyner, Greg Mueller and LI Geo for putting together this report. If you’re new to legislation around renewable thermal technologies this article will provide you a great overview and direction for where you can get more information. Here are a few other articles to read to get up to date:

Enter John and Greg

The Long Island Geothermal Energy Organization (LI-GEO) is a newly-formed organization with the primary purpose of promoting and increasing the use of energy-efficient geothermal heat pump technology for building heating and cooling on Long Island, New York.  A core organizational priority of LI-GEO is to guide future legislative and advocacy efforts at the local and state level.  To that end, this document was prepared to establish the current status of geothermal heat pump (GHP) legislation in other states as well as at the federal level.

 INTRODUCTION

Most states have established a Renewable Portfolio Standard (RPS), which is a legislative requirement for utilities operating in the state to obtain a certain amount of the electricity they sell from eligible renewable sources.  For example, utilities in a participating state are required to obtain some percentage of their electricity from renewable energy sources in Year 1 with that percentage increasing annually until reaching some maximum percentage after a period of time.  The states are generally assigning one Renewable Energy Credit or Certificate (REC) for every 1,000 kWhs (1 MWh) of electric production from an eligible source.

Until recently, only traditional renewable technologies including solar PV, wind, “hot rock” geothermal, etc. were deemed eligible technologies under the states’ RPS programs.  GHPs were not considered to be an eligible technology since they do not produce electricity which can be metered.  There is an ongoing debate, often heated, over whether or not a GHP system can be considered a “renewable energy” system.  Some classify GHP technology solely as an energy efficiency measure since it requires electrical energy input.  The industry’s general position is that the technology leverages renewable solar-derived heat stored in the ground and converts it into a useable form, namely building heating, and thus has the same net as other renewable energy systems such as solar thermal.  Further, for cooling, heat is removed from a building and rejected back into the ground where it is stored and can be accessed again during the upcoming heating season.  The technology also offers significant demand reduction potential, particularly relative to electric resistive heating and other conventional cooling systems.

Circumventing the renewable debate, a growing number of states are recognizing the overall societal benefits of GHPs and have begun allowing utilities to meet their RPS requirements by awarding “Thermal RECs” for GHP systems.  A Thermal REC is the equivalent thermal energy associated with one MWh of electrical energy, or 3,412,000 BTUs of thermal energy.  Much of this trend has been the result of efforts by a strong advocacy movement led in part by national and regional-based geothermal advocacy groups including The Geothermal Exchange Organization (GEO), National Ground Water Association (Geothermal Heat Pump Interest Group), New England Geothermal Professionals Association (NEGPA), and others.  As a result, there is growing momentum amongst the states towards incentivizing the use of GHP systems to meet rising RPS mandates.

STATE LEGISLATION AND INITIATIVES

At the forefront of state GHP legislation are recently-enacted laws in Maryland and New Hampshire, which now allow utilities in these states to meet RPS requirements using Thermal RECs generated by GHP systems.  The Maryland and New Hampshire programs now categorize GHPs as “renewable” and include them in the same incentive category as solar PV, wind, etc.  Details on each bill are presented below along with summaries of some other states that have or are considering provisions for Thermal RECs or for provisions which would otherwise allow GHPs to contribute toward satisfying RPS requirements.

Maryland:  S.B. 652, H.B. 1186 – Enacted 5/22/12

In May of 2012 Maryland passed legislation allowing geothermal heating and cooling systems commissioned on or after January 1, 2013, that meet certain standards to qualify as a Tier I “Renewable Source” for the purposes of the state’s RPS mandate.  According to the legislation the owner of the geothermal system will receive RECs based on the number of annual Btu’s of thermal energy supplied by the system and converted into MWhs.  One REC will be awarded for each MWh produced.  Systems must be designed and installed in accordance with local regulations.  The Maryland legislation includes GHPs in the same Tier I Renewable Source designation as solar, wind, biomass and other traditional renewable technologies. 

New Hampshire:  S.B. 218 – Enacted 6/22/12

In June of 2012, New Hampshire enacted a law that classifies geothermal thermal energy, including thermal energy produced using a GHP system, as a “Class I – New Renewable Energy.”  This class previously included electricity produced by wind, methane, landfill and biomass gas, wave/ocean power and others but was extended by the bill to include thermal energy from GHP and solar thermal systems.  The bill defines “Useful Thermal Energy” as “renewable energy delivered from Class I sources that can be metered and for which fuel or electricity would otherwise be consumed.”  As in Maryland, one REC is credited for each MWhr of Useful Thermal Energy produced by the system.  The New Hampshire legislation requires that “a qualified producer of useful thermal energy shall provide for the metering of useful thermal energy produced in order to calculate the quantity of megawatt-hours for which renewable energy certificates are qualified, and to report to the public utilities commission…Monitoring, reporting, and calculating the useful thermal energy produced in each quarter shall be expressed in megawatt-hours, where each 3,412,000 BTUs of useful thermal energy is equivalent to one megawatt-hour.”  The bill sets a REC price of $55 for Class I sources.

Other State Initiatives Recognizing Thermal Energy/RECs 

Wisconsin – In May 2010, the Wisconsin RPS was amended to allow specified non-electric resources that produce a measurable and verifiable displacement of conventional electricity resources to also qualify as eligible resources for obtaining Renewable Resource Credits (RRCs, Wisconsin’s version of RECs).  GHPs, biomass, solar water heating and solar light pipes are listed as eligible technologies.  This means that, like New Hampshire and Maryland, non-electric thermal energy from a GHP system may contribute toward the RPS, but the RRCs awarded are calculated based on the amount of conventional electricity displaced (electricity from non-renewable resources) rather than the actual thermal energy produced.

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New 10 Year $.12kWh TVA Solar PV Feed in Tariff –> Requires NABCEP Solar PV Entry Level Certification

In September 2012, the TVA introduced a new solar PV feed-in-tariff. The TVA will for solar PV production at retail electric rates + a FIT rate for 10 years, and then just retail rates for the following 10 years.

A few important points.

  • The FIT is currently set at $.12kWh and will start on January 1, 2013.
  • Above is a map of TVA utility area, if you need to know if a site is in TVA jurisdiction, you find a list of all TVA utilities here.
  • In order to apply for the incentive, YOU MUST HAVE A SOLAR PV NABCEP ENTRY LEVEL CERTIFICATION. Here is the TVA Solar PV Installation requirement –>”This new requirement will help ensure that proper safety measures and protocol are taken into consideration when designing a generation system and interconnecting it into the electric grid. Green Power Providers solar and wind systems approved by TVA on or after January 1, 2013, must be installed by an individual with at least entry-level NABCEP certification. NABCEP stands for the North American Board of Certified Energy Practitioners, which is the industry standard for renewable energy certifications and is a common requirement for utility incentive programs like Green Power Providers. TVA is only requiring entry-level certification for applications approved by TVA beginning January 2013. Delaying this requirement until January 2013 gives the installer community a full three months to obtain the entry-level certification. For more information, please contact NABCEP directly or visit NABCEP.org.”
  • HeatSpring an ONLINE NABCEP Solar PV Entry Level Certification. You can read more about or sign up for the training here. We decided to create an online training because it allows contractors to get their certification without the needed for expensive travel, taking time off of work, and interrupting their lives.
  • Click below to read all the detailed FAQs about the TVAs new solar program.

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A Guaranteed 5 Year, $100/MWh FIT For Renewable Thermal Sources Could Eliminate Oil Use for Single Family Homes in Vermont

“A Simple Plan for Eliminating Oil Usage for Single Family Homes in Vermont” was the message of my talk at Renewable Energy Vermont 2012 last Monday.

If you’re working in the renewable energy industry in Vermont, you should join REV. For your viewing pleasure, here is my recorded presentation.

Just to give you some perspective about the “cost” of this incentive for Vermont; currently, the solar PV incentive in Vermont is $271/MWh for 25 years, this incentive is $100/MWh for 5 years. And it’s directly replacing oil use. However, people will still ask “how will you pay for it?”, so I go more into that subject below.

But first, production-based incentives solve a lot of issues at once.

  1. You don’t need to pick a specific technology. Since the goal is to eliminate oil usage and there are many different technologies, client needs, and buildings, etc, it makes sense to incentivize all technologies evenly. This way, the best technology can be used for the right site in the right application. This hits on the fundamental point that we’ll need all these technologies to eliminate oil usage.
  2. Quality Across the Supply Chain. By only paying for production and energy that is actually used, the program will maintain quality across the whole supply chain – manufacturing, design, installation – something that we’ve learned “installed costs incentives” are horrible at.
  3. Transparency reduces risk and increases trust. By being able to track the performance of a system, the property owner can make sure it’s running correctly and that they are saving money. Additionally, if anything goes wrong, it’s much easier to figure out what exactly is happening. Also, if the state publishes the data, it will be very clear the firms that are doing the best and worst work. This will allow property owners and the private industry to determine best projects, good projects and bad projects. The best firms will quickly rise to the top and win all the business, and the worst firms go out of business.

How would this look look across many technologies? A sample home is 2000 square foot home that requires 63MM BTU per year

The “production payment to the homeowner per year” is the line that describes the amount of the $100/MWh FIT inventive. Who could pay for this? On the heat pump side the argument for the electric utility could be made, on the biomass side, the argument could be made to the pellet suppliers. The argument is simple: they are acquiring a new customer for the next 20 years so it would make sense for them subsidize the initial investment to overcome the primary barrier for the consumer.

Here’s the lifetime value of a customer and how much it would cost to incentivize the fuel cost for 5 years.

I put together another small video to explain these numbers in more detail.

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A Call for Large and/or Innovative Geothermal Projects in Massachusetts for Press Event

3 weeks ago, I held a How to Make Money in Renewable Energy workshop at Munro Distributing Clean Energy Innovations Conference. Martin Orio from Water Energy Distributors attended. At lunch, Senator Marc Pacheco spoke about why we need to invest in clean energy. His logic is simple and powerful. Massachusetts spends $22.8 billion on energy every year and most of it leaves the state. Marc’s reasoning is, if we spend the money in state, we’ll create jobs and save money. The policy has worked. The state’s unemployment is at ~6.8% and it’s a leader in energy efficiency, green building, and solar pv.

At the end of the talk, Martin went up to speak with Marc and he asked him what he thought about geothermal. Marc responded “I hear they’re doing great things in Iceland!”. Martin laughed and said that they should talk.

This small conversation is ground zero of where the geothermal industry is loosing the battle and it’s what we need to start address. Massachusetts is leading the country in energy efficiency and renewable energy and the Senator who sponsors all of the legislation thinks geothermal happens in Iceland.

The good news is that we can do something about. From what I can tell, the state of Massachusetts has their ears wide open, we just need to be helpful. They’ve found huge wins in energy efficiency and solar pv, and are looking for the next technology that will create jobs, and save tons of money on energy costs.

Here’s the plan, there are 3 Senators that draft all of the energy information in Massachusetts, the geothermal industry needs to create relationships with them. Right now, they don’t know who we are and think geothermal comes from Iceland. We can’t blame them, it’s our responsibility to be proactive.

This strategy is part of a within Massachusetts our main obstacle is political representation. 

Here’s why creating a press opportunity from the commissioning of a large project is awesome:

  • It’s an easy invite to a Senator. It makes them look good and we’re not asking them for anything. Also, it will give us the opportunity to teach the Senator about the technology, to show them that it’s be used in their jurisdiction which is creating 100% local jobs and saving money.
  • Creating a press event makes the technology visible, something we’ve always struggled with.
  • It will lead to more sales for the contractor because you can use it to invite other prospects and you’ll get press.

Specific Areas Were Focusing On

We’re focusing on specific areas for political reason, but if you have a large project anywhere in the state, please get in touch.

i.     1st Plymouth and Bristol District – Marc Pacheco

ii.     Berkshire, Hampshire and Franklin District - Benjamin B. Downing

iii.     Middlesex and Worcester - James Eldrigde

If you’re working on a large or innovation project in Massachusetts, please let me know about it so I can work with you to make it a press invite and invite local legislaturs. Having a 6 week lead time will be best. I’ll need some time to call my journalist friends and find a good date. If you have a problem coming up, please fill out this simple form and I’ll call you!

Massachusetts Geothermal Commissioning Press Event

If you have a large of innovation geothermal project that will be coming online in Massachusetts, please let me know about it so I can invite legislatures and press.

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Inside Implementing the New Hampshire Thermal REC Program

This post is part of a series to do a state by state in-depth analysis of current research, policy and other legislation in New England that is impacting, or has the ability to impact the geothermal industry. An in-depth analysis of Massachusetts has already been published. Vermont, Connecticut and New York are soon to follow.

There has been a huge amount of buzz in the geothermal world about the NH REC that passed because it’s the first in the country of it’s kind. There is work that needs to be done, but what is exciting is that is we can focus on creating and implementing the program NH has the ability to be a hot bed and lead the country in geothermal heat pump industry and eliminating oil usage for residential space heating.

The current budget has the ability to fund 1500+ residential geothermal projects, which has the potential to save New Hampshire property owners $4.8 million dollars (in 2012 dollars) on fuel costs annually and would spur $48 million dollars in 100% local jobs to design and install the new equipment. To give you some perspective, the law only requires that $575,000 be spent on purchasing thermal RECs. Yes, $575,000 in public funds have the ability to spur $48 million dollars in private investment and save 1,500 homeowners around $2,000 per year on heating costs, totally $3 million in fuel savings per year. That is amazing.

Here’s a review of what happened, and what we’re working on.

NH Current State of Geothermal Policy and Lobbying Bill

SB 218 Key Bill Language

  • XV-a. “Useful thermal energy” means renewable energy delivered from class I sources that can be metered and that is delivered in New Hampshire to an end user in the form of direct heat, steam, hot water, or other thermal form that is used for heating, cooling, humidity control, process use, or other valid thermal end use energy requirements and for which fuel or electricity would otherwise be consumed.
  • 272:4 Electric Renewable Energy Classes. Amend the introductory paragraph of RSA 362-F:4, I to read as follows:
  • I. Class I (New) shall include the production of electricity or useful thermal energy from any of the following, provided the source began operation after January 1, 2006, except as noted below:
  • 272:5 Electric Renewable Energy Classes. Amend RSA 362-F:4, I(b) to read as follows: (b) Geothermal energy, if the geothermal energy output is in the form of useful thermal energy only if the unit began operation after January 1, 2013.
  • No new employees shall be hired by the commission due to the inclusion of useful thermal energy in class I production.
  • REC Prices:
  • (a) Class I—[$57.12,] $55, except for that portion of the class electric renewable portfolio standards to be met by qualifying renewable energy technologies producing useful thermal energy under RSA 362-F:3 which shall be $25 beginning January 1, 2013.
  • (b) Class II—[$150] $55.
  • (c) Class III—[$28] $31.50.
  • (d) Class IV—[$28] $26.50. 
Posted in Clean Energy Policu, Geothermal Heat Pumps | Tagged , , , , | 7 Comments