Best Practices for Program Implementation: Lessons from the Geothermal Heat Pump Experience

Harvesting Clean Energy Conference Billings, MT January 26, 2009

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Geothermal Heat Pumps (GHPS)

• Benefits – Energy Efficient – Green – Help Reduce Dependence on Foreign Oil • Challenges – High up-front costs – Technical challenges remain – Low Awareness 2 www.johnsonconsulting.com

Benefits to Society

• • Approximately 1 million ghps are installed in the US. Significant energy savings and reductions in carbon emissions: – – Elimination of more than 6.2 million metric tons of CO 2 annually Annual savings of more than 7 billion kWh – Annual savings of more than 36 trillion Btus of fossil fuels – Reduced electricity demand of 2.3 million kW 3 www.johnsonconsulting.com

Benefits to Customers

• • • • Substantial cost savings: Geothermal heat pump systems can save as much as 50% compared to air source heat pumps and up to 45% over fossil-fuel (gas, propane, or oil) furnaces.

Economical rates: Some utilities offer special, lower winter rates for geothermal heat pump customers, offering even more savings. Environmentally Friendly: Geothermal heat pump systems are a “renewable” energy source that encourages conservation of natural resources. Financing: Some utilities offer financing through either private financing or utility-sponsored loop leases. 4 www.johnsonconsulting.com

Benefits to Utilities

• Energy efficient technology that – Builds profitable off-peak load – Provides a competitive response to natural gas and propane – Offers customers a choice, and – Provides a potential opportunity to control air conditioning and water heating loads in the future.

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The Time is Right for GHPs

• • Renewed interest in ghp programs from: – Utilities – Manufacturers – Growing infrastructure of trained contractors Utilities of all sizes are promoting ghps through: – Innovative marketing practices – – Making a long-term commitment to the market “Putting their money” where it counts 6 www.johnsonconsulting.com

Best Practices in GHP Programs

• • • Features profiles of 12 utilities with innovative ghp programs: – Investor-owned – Municipal – Rural electric cooperatives Both small and large utilities Demonstrate that this technology has traction in the market, especially in residential new construction and 7

Summary of the Utility Best Practices

• Focus on developing well-defined programs that: – Demonstrate a long-term commitment to developing a ghp market • Willingness to rely on the “experts” • Takes patience to develop a trained infrastructure • Vision to see the benefits down the road 8 www.johnsonconsulting.com

Best Practices- Program Characteristics

Utility

Muscatine Power and Water Gulf Otter Tail Plumas- Sierra Delta-Montrose Northeast Utilities First Energy Yellowstone Valley TVA BPA Palmetto Electric Tallahassee

Contractor

1 1 1 1 1 1 1 1 1 1 1

Experience

1 1 1 1 1 1 1 1 1 1 9 www.johnsonconsulting.com

Patience

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Vision

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Common and Best Practices – Marketing Approaches

Strategies to reduce the first cost barrier – Loop leases, rebates, loans, “geo” rates • Nurture Contractor Development – Training, tools, partnerships, referrals • Create and Generate Enthusiasm – “Walk the Walk” – Create a “Geo Culture” – Showcase high profile installations 10 www.johnsonconsulting.com

Best Practices to Reduce First Cost

Strategies to Reduce First Cost

Muscatine Power & Water BPA TVA Gulf Palmetto Electric Yellowstone Valley Delta-Montrose First Energy Northeast Utilities Plumas- Sierra Tallahassee 0 1 2 3 4 Design Assistance Tax Credits Loop Leases/Financing Low Interest Loans Rebates Special Geo Rates Pay for Loop 11 www.johnsonconsulting.com

Otter Tail Gulf BPA Palmetto Electric Northeast Utilities Delta-Montrose TVA Muscatine Power & Water First Energy Tallahassee 0

Best Practices To Nurture Contractor Development Strategies to Nuture Contractors

1 2 3 4 Offer Training Invest in New Tools Contractor Referrals Develop Partnerships 12 www.johnsonconsulting.com

Best Practices to Creating Enthusiasm

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For More Information

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Industry Links

        DOE Geothermal Technologies Program Geo-Heat Center Geothermal Heat Pump Consortium International Ground Source Heat Pump Association (IGHSHPA) U.S. Department of Energy –

Energy Efficiency and Renewable Energy, How To Buy and Efficient Ground Source Heat Pump

ENERGY STAR®,

Geothermal Heat Pump Systems

American Society of Heating, Refrigeration and Air-conditioning Engineers (ASHRAE) Air-conditioning and Refrigeration Institute 14 www.johnsonconsulting.com

Geo Heat Pumps : Leading Energy Utility Marketing Programs, Third Edition

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APPA and GeoPowering the West were partners in bringing the Geothermal Heat Pump Report to Western customers and other utilities. The report, available on CD, covers basic information about the equipment and costs and examines successful utility heat pump marketing programs. The CD also includes two Excel-based spreadsheet calculators. One helps utilities calculate the effects of residential geothermal heat pump installations in their territory. The other helps residential customers compare geothermal heat pumps to a variety of alternative heating and cooling systems. "To obtain a copy of Geothermal Heat Pump Report, contact your

Energy Services Representative

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www.johnsonconsulting.com

Questions?

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Katherine Johnson, Johnson Consulting Group

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Email: [email protected]

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Phone: 301 461 4865

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www.johnsonconsults.com

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