WBEZ | energy efficiency

Chicago startup sees big energy savings in big data

Wed, 27 Mar 2013 05:00:00 -0500

In the age of big data, it pays — or, in this case, saves — to put your nerdiest foot forward.

Matthew Gee co-founded Chicago startup Effortless Energy, where his business card reads “Chief Nerd.”

“I swim in this stuff,” he says, mocking up a probability distribution on a whiteboard in the company’s offices in Merchandise Mart tech incubator 1871. Gee, a third-year PhD student studying computational public policy at the University of Chicago, started the business in 2012 with a fellow University of Chicago student, Claire Tramm.

They want to be a one-stop shop for residential energy efficiency retrofits. Simple upgrades like air sealing can save American homeowners energy and money — sometimes as much as 50 percent on their energy bills. For low-income residents, who typically pay between one quarter and one third of their income in energy costs, the savings can be powerful. Cumulatively these retrofits could make a serious dent in our carbon footprint; the U.S. residential sector is nearly as large a source of carbon emissions as transportation.

Gee and Tramm think they have an answer for the question that dogs every energy saver who sings the praises of efficiency: If it’s so good, why isn’t everyone doing it?

For many families, it can be difficult to finance an effective retrofit. And in a highly technical market, good information tends to be in even shorter supply. Like Illinois’ own stimulus-funded energy efficiency program, Effortless Energy fills in that gap.

Their product is called a Home Energy Efficiency Service Agreement, and it works like this: The company pays for its customers’ energy audits and certain retrofits, sharing in the energy savings until the investment pays for itself. The customer pays less, even after its monthly installments to Effortless Energy. If Illinois were to adopt an on-bill repayment policy like the one California has, it could streamline this process by combining the two bills.

The default rate for utility bills is under 2 percent, lower than for credit cards or mortgages. Gee said the company estimates 8-9 out of 10 customers will pay back the loans in full.

CEO Claire Tramm conceded their business model might also benefit from a region with higher energy prices, such as California. “But if it can work here,” she joked, “it can work anywhere.”

And they are careful about which homes they target. Roughly 60 percent of Chicago’s housing stock is bungalows. A partnership with DNR Construction, which is well-versed in bungalow renovation, could help them tap into a $230 billion U.S. market, Gee said.

Their proprietary algorithm shares DNA with the code that powers investment banking, but Gee likens it more to retirement savings — they’re in it for the long haul, he says. It works by quantifying the variance in a slew of home energy efficiency metrics, such as a building’s insulation value and draftiness, and optimizes for the best returns. That means they know with what level of certainty any given improvement, such as installing a new heating and ventilation system, will return a certain amount of savings each year.

“We’re viewing each home as part of an investment portfolio,” Gee said. Their system works best in homes with smart meters, thanks to those digital device’s more robust data. Typically energy audits result in a hard-line recommendation: Install a new heating system and save $1,000 per year, for example. But for many customers, Gee said, that implied certainty is hard to believe. Instead Effortless Energy projects a range of savings.

“No one is building uncertainty into energy models, but we need that uncertainty,” Gee said. “When we’re making an investment decision, we’re not just looking at the mean, but the spread.”

Gee’s PhD research uses computational modeling to analyze energy use and consumer behavior, anticipating a day when an integrated smart grid would use big data to optimize energy efficiency nationwide.

Wells Fargo no longer offers its energy efficient mortgages, and "Property Assessed Clean Energy" loans have met the same fate. With traditional catalysts for energy efficiency retrofits on the outs, Effortless Energy hopes to gain a foothold in a massive, still largely untapped market.

They have done 7 or 8 home tests validating their model, and will soon begin a pilot program on 20 homes in Oak Park, opting for the West Side suburb because of its renewable power bonafides. Oak Park became the first municipality in the state to pursue an "all-green" power program that favors wind and solar power, and purchases credits to offset any nonrenewable sources.

Gee may bill himself as Chief Nerd, but he knows it isn’t numbers that ultimately close deals. Energy efficiency, he says, has an emotional appeal: it could save money and energy, but when it saves you from reaching for a winter blanket, the investment has paid off.

Manufacturing comeback could drive infill and energy efficiency

Tue, 26 Feb 2013 05:00:00 -0600

Manufacturing is a defining part of the Chicago region’s past, but a report from the Chicago Metropolitan Agency for Planning says it could guide regional development in the future, too.

WBEZ's Niala Boodhoo has a rundown of the report's main points, but here’s what it says for land use and energy — two key factors for the kind of manufacturing resurgence the report envisions. It's the kind of advanced manufacturing renaissance recently touted by President Barack Obama. (Read the full report and a summary here.)

Development and transportation

CMAP looked at the seven-county region of northeastern Illinois. That encompasses 580,000 manufacturing jobs, a "cluster" of jobs second only to Los Angeles, but also the region’s suburban and exurban sprawl. The report recommends incentives for infill growth and investment in transportation infrastructure. That would be transit-oriented development, oriented around pockets (or “nodes”) of density near the suburban hotbeds of the region’s manufacturing sector.

Transportation infrastructure is already underfunded, with regional transit agencies eyeing about $31 billion for infrastructure improvements and other capital investments over the next 10 years. The job growth projected in CMAP’s report could potentially goad some additional investment, but the transportation system’s looming budget gap is a serious challenge to the kind of transit-friendly development called for in the report calls.

To encourage density, the report recommends infill development — redevelopment on existing vacant properties. There are more than 100,000 acres of land available for infill development, CMAP said, but taking advantage of under-used land can be difficult. Industrial land could be environmentally contaminated, and much of the land that once hosted large facilities has been divided up by individual land buyers over the years, fragmenting the land available for new manufacturers. Still, there is massive potential, as seen in the map below.

Energy

Manufacturing is the largest domestic consumer of energy, making up about one third of total energy use nationwide. Ultimately CMAP’s projections for a revitalized manufacturing base in northeastern Illinois don’t hinge on energy issues; only a few industries account for 70 percent of all the energy use by manufacturers in Illinois, and those same industries account for just 25 percent of manufacturing employment. Nonetheless energy remains a major factor for manufacturing operations.

Illinois has a slightly higher cost for energy delivered to industry than other states in the midwest, the report notes. The cost of coal in Illinois is 16 percent lower than the national average, but with natural gas prices plummeting, that is unlikely to be a major advantage. And manufacturers use more natural gas than any other end user.

The report also says industrial firms in Illinois could make better use of combined heat and power (CHP) systems that recover waste heat for reuse and electricity generation, citing a World Resources Institute study that found CHP potential in Illinois was the largest in the Midwest, totaling four times the currently installed capacity. They point to an East Chicago steel manufacturer, ArcelorMittal, that recovers more energy from its blast furnace, the world’s largest, than the power from all the existing wind turbines in Illinois and Indiana combined.

CHP would be more attractive, the report says, if firms could more easily sell excess energy back to the grid. That practice is currently limited by regulation. The state recently won a grant to improve energy efficiency in manufacturing, which could potentially speed up efforts to install CHP systems. To fund those installations, the report suggests that utilities provide upfront investments to be repaid through future energy savings.

Manufacturing growth could encourage renewable energy deployment, too, as manufacturers get a relatively high percentage (5 percent) of their energy from renewable sources compared to the residential (2.3 percent), transportation (1 percent) and commercial (0.8 percent) sectors.

And the regional employment outlook could also benefit from an increased demand for renewable energy. Wind turbine manufacturing is growing in northeastern Illinois — German turbine giant Nordex and Chinese company Xianjiang Goldwind located their North American headquarters in Chicago. With only a few hundred regional employees, wind turbine manufacturing is not yet a major employer. It is, however, a rapidly growing market.

Energy storage is another likely beneficiary of the kind of manufacturing comeback CMAP recommends. The Department of Energy recently named Argonne National Laboratory a national hub for battery research.

But the report also notes that the region's investments in research and development have plummeted in the last ten years. The authors recommend the state match federal Small Business Innovation Research (SBIR) grants to build on regional expertise. Renewable energy made up 13 of 82 SBIR awards in the region in 2011, more than any other specified research category.

Chris Bentley writes about environmental issues. Follow him on Twitter at @Cementley.

Stimulus dollars insulate Chicago homes

Tue, 29 Jan 2013 05:00:00 -0600

The Avondale home of artists Marvin Tate and Lucy Mueller has a certain kind of warmth — the couple’s art fills their brightly painted rooms, which are replete with found objects, sculptures and photographs. A look through an infrared scanner, however, shows the building’s coziness belies its abysmal energy efficiency rating.

Tate and Mueller weren’t alone when contractors told them Saturday that their home leaked 69 percent more air than recommended. The two had gathered a small group of friends and neighbors for an energy efficiency “house party,” agreeing to host a short presentation by Energy Impact Illinois representative Rob Geltner in exchange for a free energy efficiency assessment.

Energy Impact Illinois is a partnership between non-profits, utilities, the state of Illinois and the federal government that promotes energy efficiency retrofits. Since last fall the program has offered instant rebates to homeowners who undertake substantial retrofits using approved contractors. That money comes from the American Recovery and Reinvestment Act.

“We’re trying to get some of the stimulus money back in the hands of the homeowners,” Geltner said. The average cost of air sealing and reinsulating a leaky home, he told the group gathered Saturday, is $2500, but Energy Impact Illinois offers rebates up $1750. Retrofitted homes typically save $500 each year on their utility bills, offsetting the out-of-pocket expense in less than two years. And the home becomes more comfortable immediately.

Part of the program’s strategy is to target only the most cost-effective solutions. That’s where the certified contractors come in. Replacing a home’s leaky windows, for example, can cost tens of thousands of dollars and yield a relatively minor improvement if the building isn’t first properly insulated. If retrofitting a home is like a series of visits to the doctor, the initial assessment performed Saturday includes a physical and a possible prescription. Contractors will do a check-up after the homeowner goes through with any retrofit work.

Anthony Stonis, president of Building Energy Experts, pointed to an infrared image of Tate and Mueller’s bathroom wall — blue, green and yellow splotches clustered around the window like bruises, revealing where the house was losing heat. The workers who built the home’s addition, which houses the kitchen and bathroom, did not properly seal the building. It’s a common mistake, Stonis said, to assume that insulation alone is enough to retain heat. If the building isn’t sealed, however, air will find a way out.

“Think of it as going out on a cold day with your puffy jacket on but not zipped up,” Stonis said, making his way down to the basement. “We want to zip it up and then put another jacket on over it.”

Part of the city’s Retrofit Chicago initiative, Energy Impact Illinois has begun to make headway in reducing energy waste among the region’s aging building stock. Stonis said about a quarter of his customers come through the program. Approaching a kind of fiscal cliff when the Recovery Act grant money tapers off this spring, however, Energy Impact Illinois and similar initiatives around the country face an uncertain future.

Until then, Geltner said, they will focus on expanding the program’s reach. They have tried traditional advertising, but “house parties” like Tate and Mueller’s have been much more effective. Word of mouth is poweful, but so is the scope of the problem they hope to address; the nation's single-family homes contribute nearly as much as transportation to our collective carbon footprint.

Incentives for energy efficiency

Thu, 13 Jan 2011 15:14:00 -0600

The old plastic and tape approach isn’t the only way to bring down energy costs. Over the last few years government agencies have been providing incentives to consumers willing to do energy upgrades on their homes. Tax credits and rebates were available to homeowners for a whole host of energy savers – insulation, appliances, windows, heating and cooling systems.

To talk about whether this push resulted in energy savings – and more pennies in people’s piggy banks -"Eight Forty-Eight" spoke to its business guru, David Greising. Greising is a reporter for the Chicago News Cooperative and he regularly joins "Eight Forty-Eight" for chats about money matters.

Music Button: The Books, "Tokyo", from the CD Lemon of Pink, (Tomlab)