Here is a very detailed example of misuse of public funds in an energy efficiency program. Lack of accountability and misaligned incentives are largely behind this problem, and that will be very clear in this example.
Larry Janesky of Dr. Energy Saver in Connecticut, a leading Home Performance contractor, recently organized a sting operation of sorts for a job from Connecticut’s Home Energy Solutions Program.
What he found is what we here at One Knob recognize as misaligned incentives and lack of accountability, you can watch the video here, but here is the summary:
- Fudging Building Air Standard (BAS), or how tight the home is allowed to be sealed to without requiring mechanical ventilation, was fudged to allow room for air sealing, the basement was deleted from the cubic footage inside the house, which is a primary number in the calculation. If this number hadn’t been fudged, the crew would have had to go home for the day without getting paid.
- Fudging air leakage reduced to get paid almost $500 more. Air leakage is measured with a blower door, and the companies get paid $1/cfm50 (the blower door leakage unit). Larry tested in the house and tested out the house before and after the work, and found a difference of 220 cfm, a very modest reduction from the 2620 it started at. Test in was documented at 2934 cfm50 and tested out at 2223 cfm50, a $711 pay day on a $220 job. This is a $491 overpayment. (The initial verbal result stated 612 cfm 50 savings, but the written report had the 711 number.)
- The pull down attic hatch was poorly sealed.
- An interior basement closet door was weatherstripped (it should be an exterior one.)
- Lightbulbs put in seldom used fixtures.
- Missed caulking spots on windows (which are not a major leak anyway.)
- Poorly sealed plumbing in an upstairs bathroom.
- Major missed air leaks in the attic – plumbing stack and bath fan, which are both easy to find and seal – and often large contributors to high energy use and comfort problems.
- Attic ducts and attic air handler not sealed (likely the most important leaks in the house.)
- Pipe insulation stated installed, but not done.
- Very high predicted savings, $428 annually. From Energy Smart Home Performance’s experience, savings that high require substantial investment and work, very little of those savings are likely to occur.
Sadly, this kind of program abuse is very common in our experience. Homeowners get this work done ‘for free’ or with a nice rebate acting as a discount, but little actually happens.
Lack of accountability underpins this story, which in time is likely to bit efficiency programs that are mandated to use public funds cost effectively and reduce actual energy usage. Here are a few of those accountability pieces:
- No verification of blower door numbers. Some test out numbers may be checked, but the test in number can never be verified after work is done, so it can be made up and no one can prove it easily. If energy savings were tracked, this would become obvious when promised energy savings failed to show up.
- You gotta make a living. This crew found out the that house was ‘too tight’ to begin with, but given the choice between feeding their families and lying, they took the second option and fudged the Building Air Standard. This is an impossible situation to put people into.
- Things were sealed that shouldn’t have been (the closet door) and not sealed that should have been (attic air leaks and leaky duct work) because they were on the approved measure list and they got paid for doing it, whether or not it actually delivered any kind of result – comfort, energy savings, indoor air quality, or otherwise.
- About $1200 of ratepayer funds were used on this project, which was ‘free’ to the homeowner. This is an example of split incentives – the homeowner doesn’t care because it’s free, the utility gets to claim deemed savings towards mandates, and the contractor makes a bit of a living. Since there is no accountability for results anywhere, this can happen, but those funds are being spent very poorly.
This is a great example of a broken system.
Thank you to Larry Janesky for pointing this example out and taking the time to make this video.
There Is a Better Way
The One Knob program design seeks to deliver the accountability to all parties that would prevent abuses such as this one. It also aligns the incentives of all parties – homeowners get problems solved, contractors make a living, utilities get the real energy savings they are mandated to get, and Public Utility Commissions get to claim a real win, not a deemed one.
Larry bravely soldiers on without programs, seeking to truly solve homeowner problems at their root, not give panaceas. We challenge him to begin to publish his own predicted client results so that the same accusations of inflated savings predictions cannot be made against him (as we challenge ourselves, Energy Smart needs to start publishing predictions on projects.)
A House Divided Cannot Stand
One thing we urge Larry to consider, along with other program fighters like him out there, is to stop fighting the system, and instead advocate for one that keeps contractors and efficiency programs from fighting each other. Home Performance and Energy Efficiency is hard enough without having so much conflicting information and advice out there.
Energy Efficiency Programs, regardless of their form, are not going away. It’s time to align ourselves and become allies. It’s time for One Knob.