In Business Since 2001 We accept Paypal
Home Article Directory
More from Bill Platt
"Bill Platt for Book Authors" Youtube Channel
Training for Book Authors
Other Resources for Book Authors & Publishers (350+ Plots & counting)
Please Support Our Advertisers

D9 Hosting

The Fastest Way To Reducing Residential Energy Demand

Copyright (c) 2010-2023

How do you get a consumer to take action? Of course, you make it in their overwhelming interest to act, and you enable them with guidance and a few tools. Clearly, if you have an outcome in mind, it is critical to understand what is actually in the consumer's best interest, and to arrange motivators to deliver the desired action.

Such thinking - seeing things from the consumer's viewpoint - needs to be applied to the way policy-makers are approaching the California residential energy market, where much effort is going into initiatives that curtail energy demand from utilities like PG&E and SoCalEd. While good progress has been made in the quest to unlock wide-scale residential energy demand reductions, California is still a few of steps short of its goals. The game-plan for these last steps can be borrowed from the private sector, where they have been tested in countless markets.

Get To Know What Will Drive Action In Each Customer Group

Of course, electricity and gas price increases over the last 6 years has received the attention of many consumers, particularly the heaviest energy consuming ones, with bills doubling in many cases since 2004. However, others have seen little change, and to get the most of our consumption reduction investments and efforts we need to distinguish between consumers.

( Related Image #1: )

First, it is key to recognize that the top 20% of residential energy consumers (in Sonoma county, these folks have monthly bills exceeding $300) consume about 40% of all energy and, conversely, the lowest 50% of energy consumers (with monthly bills under $100 in Sonoma) consume barely 30% of energy; see the chart to the right. This presents an amazing opportunity; pursuing relatively few consumers is likely to deliver disproportionate results. A prioritized return-on-effort approach is warranted. The good news is that it's actually easier to get heavy energy consumers to undertake demand reduction measures:

i. Efficiency matters more to heavy energy consumers - as they use a lot of fuel. If one spends $1,000 on home heating fuel annually, a 30% efficiency improvement is worth $300 per year. A $3,000 replacement high-efficiency heater will be paid-off over its 20 year life. But, if you spend only $100 in heating annually, $30 in savings will not support any efficiency investment.

ii. Heavy energy consumers pay much higher energy prices (especially for electricity, where the marginal price is four times that for low energy consumers; $0.40/kWh versus $0.11/kWh). The result is even mid-energy consumers are thrust into the high bill amounts of (i.) above.

iii. Heavy energy consumers have a clear economic motivation to undertake efficiency investments, as they are usually homeowners. Low energy consumers tend to be renters, and rely on landlords to upgrade energy system efficiencies (alas, landlords rarely pay utility bills).

Money Is What Really Motivates Action

Nothing motivates consumers as much as their pocketbooks. Most citizens want to operate environmentally responsibly, but if action requires a net cash outflow there is always hesitation - almost always resulting in inaction (especially true when investment needs are in thousands of dollars; the case for most non-trivial demand reduction measures).

( Related Image #2: )

The chart to the left summarizes a study of nearly 200 households in Sonoma County. It shows the average 20-year benefit of undertaking only economically positive measures for the three segments of households; low consumers with monthly bills under $100, mid consumers paying between $100 and $300, and heavy consumers paying over $300. An economically positive demand reduction measure is any retrofit, behavior change or energy generation that will pay for itself after all costs (equipment, installation and 7% financing, and assuming fuel prices increase at historic rates). This detailed study has a clear message; low energy consumers have little to gain investing to reduce demand, while heavy energy consumers have much to gain; more than enough to drive action - enough to pay for a college education!

So, what magnitude of reductions in energy demand is associated with such enormous economic benefits? The potential is staggering. With the proper guidance, using combinations of efficiency retrofits, minor behavioral changes and solar generation, heavy consumers would profitably reduce electricity consumption over 60%, and gas nearly 30% (see discussion below).

On the other hand, the opportunity to profitably reduce demand among the low energy consumers is very limited, owing to the lower prices enjoyed today by this customer segment, and their lower fuel throughput.

( Related Graph #1: )

So what does California have to gain by embarking on a program to get consumers to act in their own economic interest? Again, the opportunity is staggering. Projecting this study's Sonoma County figures to the rest of the state (notably, Sonoma's potential is likely lower than other counties in California, owing to its mild coastal climate), the back-of-the-envelope calculations in the table above shows 35 billion kWhs are at stake, along with 1.5 billion therms, every year!

Want Success? Attack Each Customer Type Differently - Use What Works!

The nature of the demand reduction opportunity is very different between consumer segments, as illustrated in the charts below for typical electricity and gas customers in each segment.

( Related Image #3: )

( Related Image #4: )

The huge differences in the nature of these opportunities demand a different approach, tailored to the needs of each customer segment:

( Related Graph #2: )

Low / mid energy consumers: The economic viability of demand reduction investments by low / mid energy customers is limited. Professionally installed solar electricity generation is never worthwhile, and much the same is true for most other measures. The majority of the opportunity in electricity demand is, by far, only achievable by light bulb replacement and a few behavior changes. With this in mind, the most efficient approach for the state to drive demand reduction in this segment is, unquestionably, a broad-based educational media campaign focused on 3 or 4 simple messages; the positive economics of light bulb replacement and behavioral tips.

Heavy energy consumers: These 2.8 million California households offer an opportunity to reduce the state's utility-supplied energy by 23 billion kWh and 720 million therms annually -and each will receive a huge economic gain in the process. The state just needs to tip the cart slightly and allow self-interest to take over.

The Sonoma county study found that homeowners rarely take action because they have no idea what investments will pay-off, and are most afraid of losing money in erroneous investments.

They need help figuring out what to do, but cannot find anyone able give them an action plan that is assured to reduce their energy-related spending. The only potential source of help is the energy audit industry, but they are currently going down a path focused on calculating HERS scores for homes - not in delivering optimized plans for homeowner action. Moreover, even if they started to come up with such plans, homeowners would still not take action as they are so risk-averse they refuse to spend anything on energy audits in the first place.

There Is An Ultra-Low Cost Solution...

The solution is quite simple, and was successfully used in the Sonoma county study. There are two parts to it: First, software is needed to automate the highly complex energy-economics optimization calculations needed for each unique home; only with such automation can several person-months of analysis be whittled down to a millisecond. Second, California's energy-audit system, currently oriented around giving structures a "HERS" energy score (a number seemingly dreamed up by engineers), needs to be re-focused on the consumer's viewpoint of home energy-economics1, and simplified to actions that drive down spending.

Both the software and structure energy-economics diagnostic were developed and used in the Sonoma county study (see, such that after 1 person-hour of effort, each home in the study received a custom action-plan that delivered up gains for the homeowners concerned up to $650,000 in 20-year savings (again, net of all costs, including capital/financing costs)!

If all the heavy energy consuming households in California undertook such a diagnostic, paid for by the state to ensure widespread coverage, the cost to the state would be $250 million. Now, if only 50% of those households undertook the prescribed action plans, the savings would be 11.5 billion kWh and 360 million therms each year. That's 2 cents per kWh saved and 80 cents per therm saved annually - a cost far lower than any initiative the State of California is currently paying for, and one that is likely to deliver wide-scale results very quickly, since consumers act in their own interest.

About The Author: Shop Amazon - Top Gift Ideas
New Energy Investment Partners is on the web at:

V Rory Jones: Partner, New Energy Investment Partners LLC

Rory has operated as an advisor to leaders in large- and mid-cap businesses for over 20 years, and has helped create billions in cash flow and business value. Rory was Partner at PricewaterhouseCoopers Strategy Consulting, where he led the US Shareholder Value advisory practice. Rory co-founded Business Value Associates; consultants specializing in value growth, and has served leaders in today's most successful businesses; Diageo, Encyclopedia Britannica, HP, Liberty, IBM and others. Rory earned his MBA from the University of Chicago, and his BSc from London's City University. He is widely published and speaks regularly, and is quoted regularly in the media. Rory also sits on several boards, including the Association for Strategic Planning. His book, Boosting Cash Flow and Shareholder Value is published by John Wiley and Sons.

Steve Malloy: Partner, New Energy Investment Partners LLC

Steve's 20 year career spans strategy consulting and leadership at technology companies. Immediately prior to NEIP Steve was a serial entrepreneur, founding and leading several technology-driven ventures (including Cachet Solutions, a Financial Services software play, and several renewable energy investments). Steve was a Principal in PricewaterhouseCoopers Strategy Consulting, where he advised leaders at Ameritech, Motorola, Samsung and elsewhere. Steve earned his MBA from the University of Chicago, and his BA from Carleton College. Steve serves on several boards, and speaks and writes on renewable energy market issues.

Needs Work >> 0 - 1 - 2 - 3 - 4 - 5 << Excellent Article

Tell our authors what you think about their article.

Top-Level Category: Business Offline Articles || Related Categories: World Events Articles and Society Articles

10 Most Recent Articles Written by V Rory Jones and Stephen Malloy

All of Author's Articles on this site:

Most Recent "Business Offline" Articles

How To Build a Strong and Powerful Business During a Recession
Written by: Trey McMartin | Distributed: 2011-11-10 | Word Count: 987 | Page Views: 6610 | Votes: 6 | Rating: 0.83
During a recession, most business owners pull the reins on advertising budgets, fearful of what tomorrow might bring... Those who remain fearful have forgotten what made them the success they are today... They have forgotten that they have a God-given talent to overcome the incredible obstacles in their paths.

SEO Lessons from Local Businesses
Written by: Trey McMartin | Distributed: 2011-11-09 | Word Count: 945 | Page Views: 6698 | Votes: 5 | Rating: 0.40
More than once in the six years that I have been providing SEO services for websites, I have had the opportunity to discuss with individual business owners their search engine optimization needs. Now and again, I run across an individual business owner who is quick to say that SEO is absolutely worthless. When confronted with such an absolute statement, I like to press for details. It has been my experience that people who speak in negative absolutes will have a horror story to share.

Where Will FDA Target Next? What IVD Manufacturers Should Know Before Their Next FDA Audit
Written by: Norm Howe | Distributed: 2011-09-12 | Word Count: 706 | Page Views: 537
Medical device manufacturers are always interested in knowing what FDA's next area of focus will be. Well, if you're an In Vitro Diagnostic manufacturer you might review your measurement systems.

Online Fax - 10 Reasons To Get An Online Fax Service
Written by: Titus Hoskins | Distributed: 2011-09-12 | Word Count: 560 | Page Views: 542
Online faxing is the new more modern way to fax. If you or your company is not using an online fax service, here are 10 good reasons why you should get it.

Best Effort Essential for the Job Interview
Written by: Barbara Wulf MS, ACC, CPCC | Distributed: 2011-07-30 | Word Count: 676 | Page Views: 632
Interviewing will determine if you are the right person for the job. These tips will help you make the job interview a success.

Go Green With Your Career Search
Written by: Barbara Wulf MS, ACC, CPCC | Distributed: 2011-07-28 | Word Count: 636 | Page Views: 5463 | Votes: 4 | Rating: 0.50
Many of the qualities of green living, like recycling and sustainability, can apply to a career search, even if the career is not directly associated with green industries.

ReCareer in the Second-half of Life
Written by: Barbara Wulf MS, ACC, CPCC | Distributed: 2011-07-26 | Word Count: 525 | Page Views: 5462 | Votes: 5 | Rating: 1.20
Many of us worked the first half of our life to "fit" the job description. ReCareering is about finding the right fit, being selective, being creative, being fulfilled and being intentional about how you spend your time.

Up in the Air
Written by: Barbara Wulf MS, ACC, CPCC | Distributed: 2011-07-24 | Word Count: 678 | Page Views: 598
When looking for work or changing careers, go beyond researching on the internet and reading articles. Find out how you can learn from the art of listening and having a conversation.

Salon and Spa Owners: Which Monk Are You?
Written by: Dan Lok | Distributed: 2011-07-05 | Word Count: 477 | Page Views: 6244 | Votes: 7 | Rating: 1.00
Too many salon and spa owners are carrying around a lot hurts, regrets, guilt, past failures and fears about the future. But no one is forcing you to carry these emotional rocks, so put that sack down!

The Single Most Profitable Day You Spend on Your Spa or Salon!
Written by: Dan Lok | Distributed: 2011-06-30 | Word Count: 470 | Page Views: 6571 | Votes: 5 | Rating: 0.20
Salon and spa owners need to combine their marketing plan with marketing systems. A marketing calendar plans out strategies for a year, and is instrumental to the success of your spa or salon.

Most Viewed "Business Offline" Articles

How To Write A 300 Page Book In Four Months
Written by: Mark Silver | Distributed: 2008-07-15 | Word Count: 821 | Page Views: 40106 | Votes: 8 | Rating: 1.38
There's a lot of hoopla about becoming an author of your very own business book. The promise of fame and fortune is very alluring. Yet your book remains perpetually 'about to be' written. Meanwhile your business has ground to a halt. Hmmm... might there be a better way to get a book written?

The Best Marketing Book I've Ever Read (You'll Be Surprised)
Written by: Judy Murdoch | Distributed: 2007-05-09 | Word Count: 1522 | Page Views: 37234 | Votes: 17 | Rating: 3.18
From time to time someone asks me to recommend marketing books. Here's one of my favorite marketing books that always surprises people. Curious? Read on.

The Bizarre History Of The HOLLYWOOD Sign
Written by: Morris Timlen | Distributed: 2008-11-05 | Word Count: 1211 | Page Views: 34809 | Votes: 30 | Rating: 2.70
The most famous sign in the history of mankind is the one that graces the side of the hill above Hollywood, California. As famous a landmark as the Christ the Redeemer statue in Rio De Janeiro, the Eiffel Tower in Paris France, the Great Pyramid of Giza in Egypt, The Church of the Savior on Blood in Saint Petersburg Russia, and the Statue Of Liberty in New York City, the Hollywood sign is known around the world as the symbol of the American movie industry.

What Does It Take To Be A Successful Salesman?
Written by: Casey Moher | Distributed: 2008-08-05 | Word Count: 930 | Page Views: 27446 | Votes: 84 | Rating: 3.17
In the course of my average workweek, I meet people who tell me that they have no sales experience, and very literally, many will tell me that they could not sell if their lives depended on it. Do you fit into this mold? Do you seriously believe that you can sell me on the idea that you cannot sell things?

The Future of the Office Photocopier Industry
Written by: Jennifer Robinson | Distributed: 2010-07-29 | Word Count: 635 | Page Views: 15831 | Votes: 39 | Rating: 2.00
Since Xerox first invented and sold the first commercial photocopy machine companies and organisations have paid for use of the machine on a cost per copy basis. This has traditionally included full maintainance and toner supplied under a service agreement. In-fact the office photocopier is unique in the fact its one of the only pieces of equipment that comes without a warranty from new. But photocopier expert Online Connect UK claim all that is about to change.

Never Write A 'Thank You' Letter Again
Written by: Perry Maisin | Distributed: 2008-08-12 | Word Count: 971 | Page Views: 14882 | Votes: 22 | Rating: 2.09
When I was in graduate school, I had a friend who interviewed at fortune 500 companies and succeeded at landing a great job. One day, I saw him sitting in the student union with a stack of cards. The cards said 'thank you'. He opened each card and signed his name. The inside of the card was blank. I asked him what he was doing and he told me that it was important to send a 'thank you' to every person you interviewed with. He believed that that was the difference between getting the job and being passed over.

Selecting Between a 401(k) And 403(b) For a Nonprofit
Written by: Daniel Lamaute | Distributed: 2007-10-11 | Word Count: 333 | Page Views: 14546 | Votes: 22 | Rating: 2.27
Newly released IRS regulations impose several new requirements and fiduciary responsibilities on employers with 403(b) plans. While the regulations generally don't take effect until January 1, 2009, there are some provisions that apply sooner.

Conducting Effective Career Aspiration Discussions with Employees
Written by: Andria L. Corso | Distributed: 2010-03-10 | Word Count: 690 | Page Views: 13566 | Votes: 12 | Rating: 1.33
Enhance your talent management and development programs through conducting career aspiration discussions with your employees. Find out where they want to grow their career to determine if it matches your business needs. This will enable you to differentiate your employee development to grow the future leaders of your company.

Top Ten Personal Habits
Written by: Laurel Vespi | Distributed: 2009-09-08 | Word Count: 427 | Page Views: 13266 | Votes: 12 | Rating: 2.08
Successful people have a regular routine of daily or weekly habits that reinforce the things that are most important to them. By practicing a set of personal success habits, they maintain a positive outlook, keep focused on their priorities, have more energy, and a greater sense of satisfaction with life.

Pitch A No-Hitter With Baseball-Themed Flower Gifts
Written by: Wesley Berry, AAF | Distributed: 2007-12-25 | Word Count: 413 | Page Views: 11782 | Votes: 27 | Rating: 1.74
Want to send a gift to the baseball fan in your life that's sure to knock one out of the park? Send flowers with a baseball theme! Everyone loves flowers and when you personalize them to include the recipient's favorite hobbies, like baseball, they're sure to make an even greater impression.

Highest Ranked "Business Offline" Articles

Equal Opportunity Pizza Ordering
Written by: Rudy Vener | Distributed: 2007-10-19 | Word Count: 629 | Page Views: 5325 | Votes: 10 | Rating: 3.60
With online ordering, your menu and restaurant suddenly become accessible to both the deaf and blind customers in your community.

Lone Wolf --- Lead Wolf: The Evolution of Leadership
Written by: Rick Johnson | Distributed: 2006-07-20 | Word Count: 1826 | Page Views: 4402 | Votes: 19 | Rating: 3.47
Family owned organizations, both small and large, with succession issues, family preparation and second and third generation leadership issues have been subjected to the evolution of leadership. These organizations are often founded by an aggressive, highly talented entrepreneur. Many of the principles of leadership that helped build the success that the organization enjoyed in the past is not the type of leadership that will maintain that success through generations of ownership.

Get the Balance Right
Written by: Rich Thawley | Distributed: 2009-01-28 | Word Count: 638 | Page Views: 3938 | Votes: 15 | Rating: 3.33
Do you build your business around your family or your family around your business? The choice is yours.

Delegate Or Die: 6 Steps For Business Growth
Written by: Rick Sloboda | Distributed: 2007-05-08 | Word Count: 366 | Page Views: 3662 | Votes: 24 | Rating: 3.29
To achieve business growth, you need to focus on your strengths and hire others to take care of the rest. Unfortunately, entrepreneurs often fail to employ this fundamental business growth strategy. Here are six steps to help you delegate successfully.

Whose Restaurant Can You Find Online?
Written by: Rudy Vener | Distributed: 2007-07-09 | Word Count: 640 | Page Views: 5034 | Votes: 7 | Rating: 3.29
What is so significant about Pizza Hut's latest TV commercial?

Why Businesses Need Receivable Factoring In Cash Flow Management
Written by: Toby Seibert | Distributed: 2007-08-08 | Word Count: 866 | Page Views: 7305 | Votes: 7 | Rating: 3.29
In today's business environment, many businesses need to fine-tune the process of getting paid on invoices, in order to improve their cash on hand. Improving cash flow can be an ongoing challenge for businesses of all sizes, and it is an issue that must be addressed to ensure the long-term viability of the business.

Boost Retention And Referrals In Your Insurance Agency
Written by: Stephanie Cunningham | Distributed: 2007-10-23 | Word Count: 707 | Page Views: 2620 | Votes: 7 | Rating: 3.29
If you have ever stayed at a nice hotel, then you have probably seen the hotel's Concierge. The role of the Concierge is to assist guests with information and service to enhance their stay. What would happen if you took the idea of the Concierge and applied it to the way you service your agency clients?

Business School for Non-Business Minds: Got a NAICS Number?
Written by: Melissa Mashtonio | Distributed: 2008-04-15 | Word Count: 423 | Page Views: 5149 | Votes: 7 | Rating: 3.29
I’m a journalist. I spent a lot of my career in the news business. As my career has progressed, I’ve spent time at small and large companies, and I have sat through dozens of business meetings wondering what the heck the “money” people are talking about. They used acronyms as if they were a foreign language.

The Problem With Swiping Sales Copy
Written by: Scott Bywater | Distributed: 2009-12-03 | Word Count: 480 | Page Views: 5101 | Votes: 7 | Rating: 3.29
This is what people miss when they try to simply "swipe" sales copy from another advertisement.

Why 'Closing' Is Not The Most Important Part Of Making A Sale
Written by: Scott Bywater | Distributed: 2006-08-29 | Word Count: 553 | Page Views: 6327 | Votes: 31 | Rating: 3.26
If you ever thought that 'closing' was the single most important key to sales success, then pay close attention, because what I'm about to share may surprise you. Let me explain:

Download an eBook today
Directory Navigation
Locate By Category:

ALL Categories
Arts & Crafts
Arts & Entertainment
Business - Offline
Business - Online
Food & Drink
Health & Wellness
Home & Garden
Nature & Pets
Real Estate
Self Improvement
Sports & Recreation
Travel & Leisure
World Events
Writing & Speaking

Change Number of Results:
50 - 100 - 200 - 500
Article Reprint Rights
Creative Commons License

This work is
licensed under a
Creative Commons

You are not required to show the creative commons license notice when you reprint this work.
Article Statistics
Word Count: 1437

Total Views: 4540

Article Rating: 1.67 of 5
Votes Cast: 6

More Articles By Author:

Last Distribution Date:
2010-08-03 14:00:00

Internal ID: #7562

All Articles are Copyright © 2001-2023 of the Defined Authors.

All other material and images on this site are:
Copyright © 2001-2023,