THE WATTZON BLOG

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Archive for October, 2011

Fuel Poverty in Britain – Even the Queen

Fuel poverty is an emerging political crisis in Britain. A household that spends 10% or more of its disposable income on fuel lives in “fuel poverty”. This week, the Financial Times reported that the Queen’s energy bills for her four residences have soared by 20%. Payments to the Queen by the Government have been frozen due to the financial crisis, so her household is getting close to hitting the fuel poverty line.

 

While this might seem like a lightweight bit of news, the Queen’s fiscal challenge is a dilemma faced by many households. And the details of her story are also very common:

 

• The Queen has had smart meters installed, which dropped energy use by 12%. But the gains have been more than erased by higher energy costs. (Of course, one could argue that without the smart meters the situation would be worse, but the point is that the utility bills don’t reveal a clear, quick payback on the investment.)

 

• If historical price trends continue, the average British household will be in fuel poverty by 2015; no income level is safe. Fuel poverty is not just a low-income issue, and rising energy costs will be a key political issue in the next election.

 

• The rising costs are driven by infrastructure expense and rising natural gas prices. Although Britain continues to pursue a green investment agenda, it is easy to envision a scenario in which infrastructure spending—a key to using energy more efficiently—is deferred.

 

• The Queen herself is deferring investment: postponing upgrades to the palace heating systems and buildings due to lack of funds. Apparently, the palace staff plans to do the upgrade in the “next 15 years”, and meanwhile is trying to buy power at wholesale rates to lower costs.

 

The article reports that the Queen patrols the palace to turn off lights—and we applaud her efforts—but frankly, she needs a home performance contractor with a financing package! She could get the improvements done and pay for them out of energy savings!

 

Remember HomeStar, a proposed U.S. program to heavily subsidize home upgrades, creating thousands of domestic jobs? This is the perfect antidote to rising energy costs. Did we just say jobs? Fuel poverty may actually be a winning political issue. Long Live the Queen!

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Rebates: The Hidden Jewels

 

October is Energy Awareness Month, which is leading to all sorts of interesting news stories. One of the most quoted is a recent survey by Harris Interactive, reporting that 61% of Americans do not know about utility rebates. Clearly, they have not seen the rebate center at WattzOn. And the survey found (yet again!) that information does not always lead to action: one-fourth of consumers who knew there was a rebate available did not use it.

 

But as one reporter noted, consumers don’t buy the best cell phone plan either. They are often unaware of the incentives available, and they are unclear about the benefits of change. (To everyone working in the field of energy efficiency, this must sound very familiar!)

 

As the survey results show, it’s clear that consumers need help in navigating confusing choices surrounding energy savings. It is up to companies like WattzOn to present information in a clear and actionable way.

 

Here’s an example: The mighty city of Hercules, California (population 19,500) offers a very generous rebate for PV solar systems: $2.42 per watt, up to a maximum of $10,000. For a typical system (3 kw), this means a $7,500 rebate is available, bringing the net system cost down to $8,000. In nearby Pinole, where there is no city rebate, the net cost of a PV system is over $15,000.

 

Telling a consumer these numbers is mind-numbing. But showing consumers these numbers, in a personalized estimate of net solar costs, can tip decisions. “Oh, it only costs that much?!?” is a statement that leads to change. Check out our personalized solar calculator to see our point.

 

So, while the Harris poll is sobering—years of utility marketing dollars have not had much impact—it is also a very good illustration of a real problem. In many industries, consumers need to have the data pulled together to answer a single question—“What does it mean to me?” Why should the business of energy savings be any different?

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Welcome!

This marks the launch of WattzOn’s new blog, where we’ll be looking at what the energy market means for consumers. WattzOn is focused on helping homeowners and renters save energy and make their homes green.

 

But too often we are surrounded by confusing and conflicting information—it is not easy to get started saving energy. This blog uses the hard logic of economics and technology to cut through the noise. Hopefully we’ll be entertaining too!

 

Here at WattzOn our mission is simple: We help people understand how they use energy in their homes and in their everyday lives. We do this by providing free, easy-to-use online tools and free phone consultations with home energy and solar experts. Our experience is that it takes a blend of energy efficiency, financing and consumer engagement to catalyze people into saving energy.

 

And about consumer engagement… Most often, energy savings advice is promoted by utilities or green advocates. Although very different parties, both hope to change your decisions. But… there is a lot of research showing that consumers don’t change their decisions based on information and awareness. Consumers need to be engaged before they’ll act. So a thread running throughout the blog posts is the real-world lessons we’ve gained at WattzOn.

 

We’ve been in business for over four years, and we’ve learned that there is a reason why the typical utility program gets only 1–2% energy savings, or that fewer than one-half of one percent of residents actually get an energy audit. Time for a modern and fresh look at consumer engagement!

 

Welcome to the WattzOn blog. Look for blog posts, coming soon, that describe our work with the PBS series EARTH: The Operator’s Manual, our Green Energy Match demonstration project with the City of San José, and the insights we are gaining from our user community.

 

Stay tuned!

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