First published in Frozen & Refrigerated Buyer Magazine August 2015
The Environmental Protection Agency announced two final rules on July 2, finally putting to rest the angst and uncertainty of equipment manufacturers who have been so vocal about their hardships during the past year. Supermarkets now have a clearer roadmap to guide their refrigerant choice, and equipment manufacturers have enough time to make the necessary changes to their equipment to meet the regulatory deadlines set by the EPA’s Significant New Alternatives Policy (SNAP) Program. At least now the market has certainty. For most, that’s good enough.
The two new EPA rules set a time limit for the use of certain potent global warming refrigerants in new equipment. At the same time, the agency added several lower global warming refrigerants to the list of choices available to industry.
There are some clear winners and losers built into these new rules. The winners are the equipment manufacturers who chose to put their heads in the sand over the past five years. They opted to do nothing to prepare for the future that was pretty clear to anyone who pondered it. The losers are the companies that led the charge to deliver the environmentally beneficial low-global-warming potential (GWP) refrigerants that end-users demanded, in hopes that their leadership and early action would eventually give them a competitive advantage.
The EPA rule that postponed the move to low-GWP refrigerants in self-contained equipment for several years caters to the lowest common denominator in the market, instead of rewarding the pioneers who invested early in research and development.
But the equipment manufacturers in the United States who think they have won a victory may find their relief to be short-lived. For in persuading the EPA to delay environmental progress, they have put themselves in a worse position to meet today’s end-users’ demands — demands that foreign competitors are quite able to meet. So instead of the EPA acting as an impetus to motivate American companies to catch up with the rest of the world, they have buckled under to the demands of the very people who don’t yet know they are celebrating their own demise.
Supermarkets in our country are ready to move to low GWP refrigerants, in their refrigeration systems and in their self-contained equipment. The problem they face is that they can’t find enough domestic equipment manufacturers to meet that demand. Will allowing American manufacturers another three years to catch up to today’s needs put manufacturers in a better competitive position? Of course not. The demand for better products doesn’t stop just because domestic manufacturers aren’t ready to meet it.
There are plenty of manufacturers in Europe and Japan who are able to deliver quality, low-GWP equipment — now. We’ll see a flood of companies from overseas enter the U.S. market over the next three years. And while U.S. manufacturers are catching up, their competition won’t be sitting back and standing still. Three years from now, in 2019, when U.S. manufacturers can’t avoid the environmental progress that end-users want, European and Japanese manufacturers will be several steps ahead of us again. There was a time when U.S. industry was at the forefront of innovation and design. Those days ended when our country decided that environmental progress was something to be feared and denigrated as an unnecessary cost and an unwelcome governmental intrusion, rather than an opportunity to gain a competitive advantage in the market.
PLEASE DON’T SUE!
No one is extraordinarily happy with the state of things after these two new rules were announced. Perhaps that’s the best sign that the EPA found a good compromise within the realm of the competing demands and criticisms leveled against the agency as it tried to nudge industry in the right direction. In this day and age, it seems that the most the EPA is willing to strive for is to hope that no one is unhappy enough with their decisions to sue them.
First published in Fresh Thinking July 2015
The difference between mediocre communication and compelling communication lies in your message’s credibility, appeal, relevance, and distinctiveness. However, just like in refrigeration, when you fail to look at the whole picture, you wind up changing certain elements only to bring others out of whack. You lower your head pressure to save energy, but in doing so you lose heat reclaim capacity, which uses more energy, which brings you right back to square one. Similarly, in communication, overdoing it on one element, like distinctiveness, makes it harder to achieve another element, like credibility. In other words you can’t look at the pieces in isolation.
In the first three installments in this series, I addressed the challenges involved in communicating with supermarket customers about refrigeration and the environment, and I offered some simple DOs and DON’Ts for success. This article covers the factors that make some messages more compelling than others and gives some examples from the refrigeration world that can help to strengthen your communication.
I feel I have to insert a codicil here about some of the made-up marketing terms I am going to use, like believability (the extent to which people find your message to be credible) and likeability (the extent to which your message makes your brand or company more appealing to customers). Before you are tempted to make fun of me, I ask you to ponder the words “product shrinkage.” It too is a strange phrase that makes it easier to discuss a wordy concept, develop strategies to prevent it, and then measure our success. It means something very different to regular people. If you don’t make fun of me when I use the word likability, I (probably) won’t make fun of you when you talk about shrinkage.
Perhaps the most critical factor when communicating about sustainability is believability. This is where the vast majority of claims about sustainability fail. Believability doesn’t just encompass the concept of a truthful message; it also encompasses the idea of understandability and the concept of “buy in” or acceptance of your message.
There are so many “green” claims out there from every type of company that people have become cynical and distrustful of tales of environmental good deeds. We expect companies to say good things about themselves, because they are trying to sell you something.
There is a solution that cuts to the chase of this problem: Let someone else do the talking for you. The organization lauding your environmental good deeds should be seen as the ultimate independent expert in environmental issues, with no reason to exaggerate claims. In other words, it needs to be clear that the organization has no financial stake in your business. The organization must be trusted to tell the truth about your record and performance on the issues. Can you think of an organization that meets all of these criteria? That’s right: the EPA, specifically GreenChill.
The distinctiveness of your message is what grabs attention and makes an impression — it should make them say, “Wow, that’s really special.” The most common method used to make a message seem distinctive is to use words like innovative, new and improved, ultra, or version 2.0. Not only are these terms overused, they also don’t tell your consumers anything that is really useful. Just because something is innovative doesn’t mean it is better. Version 2.0 is not inherently better than the first version.
Counterintuitively, the lack of information and communication about refrigerants may actually make your job easier. Because most customers haven’t heard a lot about the subject, a message about refrigerants is going to make you stand out. And it’s fairly easy to impress people with environmental progress in this field. A good refrigeration system can have the same positive effect on climate as if the store shut off its power for the entire year. You don’t hear a claim like that everyday.
Awards are great for distinctiveness, as long as the award is from a respected and well-known organization and the award is real, important, and impressive. For instance, an environmental award from the EPA for the best refrigeration system in the nation has distinctiveness built right into it. By definition, you are the only one who can make that claim. This is another area where the GreenChill Store Certification Program and the GreenChill Partnership can be very helpful.
Awards also help with the likeability factor. But let’s face it; you don’t really have to try that hard to make sure that your environmental message increases your appeal to customers. The only way a message about environmental progress could hurt your appeal is if it inadvertently leads people to believe that it’s going to make prices go up. You’d think that this is easily avoided by telling people that your environmental achievement also saves money, but in my experience, stores never want to claim that because they imagine all their customers asking them when they are going to lower their prices.
The last factor that is crucial to a compelling message is relevance. This is a tough one because supermarket customers don’t think much about refrigeration, and supermarkets are usually happy about that. Supermarkets want customers to focus on the products they are selling. But the bottom line is that people want to do business with companies that share their values. They want to feel good about where they shop, and it makes them feel good to know that their grocery store is addressing climate change, the most pressing environmental issue of our time.
It is essential that all communication with customers be compelling. The purpose of a supermarket is to sell groceries for a profit. Everything a supermarket does needs to further that goal, including communication. Communication with customers is only worthwhile if it helps persuade supermarket customers that they should shop at your store, rather than someone else’s. You are trying to affect customers’ decisions, so your message better be compelling. If your communication is not compelling, you are wasting your money. It’s that simple. In fact, that’s probably the only thing that is really simple about compelling communication.
First published in Fresh Thinking July 2015
In Parts I and II of the series on sustainability and refrigerants, I listed some of the reasons why it can be difficult to communicate with grocery shoppers about sustainable refrigeration. This third installment provides tactics for clear, simple, and compelling communication — as well as tips to avoid common mistakes.
First, I need to address readers who expect a fill-in-the blank communication template that works for everyone and every topic. Stop reading now. You are going to be disappointed. The truth of the matter is, there is no universal formula for communication. If there were, and I knew it, I’d sell it for a lot of money, buy my own island, and leave the whole refrigeration world far behind. You’d never see me again.
I’m still here. Enough said.
While I can’t give you a formula, I can offer suggestions for making things easier and tips on what to avoid that are based on my own trial and error. And believe me, I’ve tried, and erred, and tried again. Slowly but surely, I learned what works with supermarket customers and what doesn’t.
Let’s start with a discussion of common mistakes that I see over and over again, because it’s always easier to hone in on what not to do.
Keep it simple
One of the most common communication mistakes I see over and over again in our industry is that we make our messages too complicated. Complexity is the enemy of successful communication. Complexity means that your audience has to work to understand you, believe you, and be persuaded by you. There are few people who have nothing better to do with their time than work to understand what you are trying to tell them.
Avoid words that the vast majority of your audience (the general public) does not understand. That sounds obvious, right? Well, if your press release or speech to grocery shoppers uses words or phrases like ozone-depleting substances, metric tons of CO2 equivalent, transcritical, refrigerant emissions, HFCs, HCFCs, R-22 (or the combination of the letter R and any other number), carbon footprint, cascade, distributed, rack, compressor (or the name of any other component), advanced technology, TEWI, or charge size, hit delete and start over.
Ask yourself after each sentence whether there is a simpler way to express your thought. This can increase your word count, but what good is a short press release if it is off putting? Instead of refrigerant charge, use the term “the amount of refrigerant used.” Instead of emissions, use the word “leak.” Instead of ozone-depleting substances, use the phrase “chemicals that harm our ozone layer.”
If your press release is meant for the trade media, then you are not targeting regular grocery shoppers. That doesn’t mean it is okay to use complex messages, but it does mean that your audience will be familiar with some of the before-mentioned words and phrases.
Ditch the jargon
Don’t use jargon, especially jargon about sustainability. For instance, don’t even use the word sustainability. Jargon about sustainability makes you sound like the type of person who spends too much time talking about sustainability and not enough time doing something to achieve it. Jargon in general makes you sound pretentious. Do you like listening to pretentious people? Does anyone?
Though this isn’t an absolute no-no, I would avoid getting into details about climate change, global warming, and ozone depletion. Why? Because most people who use those words don’t really understand what they mean. Try the following exercise on your own: explain global warming. Don’t just think about it for two seconds and reassure yourself that you could do it; get out a piece of paper. Try to write a paragraph explaining it, or use your cell phone to record yourself while you explain it.
The reason I suggest you try this on your own is that you’ll likely be embarrassed if you try it in front of others. We all think we know a lot about refrigerants and the environment, right? There is a good chance that every single one of you has referred to global warming. Most regular shoppers haven’t spent the amount of time on this issue that we all have. They don’t have a reason or desire to understand our issues at our level. So if we don’t really know what we are talking about, why would we expect shoppers to understand what we are talking about?
Stay “on message”
The good news is that shoppers don’t have to understand the complexities of global warming, climate change, and ozone layer depletion to understand that you are doing something good for the environment. And in the end, isn’t that all you want to get across: that your store or your company did something really good for the environment? If you pinpointed the one message that a store wants shoppers to understand after reading a press release or listening to your speech, wouldn’t you be happy if they walked away with that idea embedded in their brains?
Of course, every person and every entity in existence nowadays is claiming to do something good for the environment. So how do you separate yourself from them? By doing it better than everyone else does. I get frustrated when I hear people say that you shouldn’t communicate about the good things your store is doing for the environment because everyone else is making the same claims. Imagine if every company that sells laundry detergent in your store stopped saying that it gets your wash clean, because their competitors also claimed to get wash clean. Those laundry detergent companies don’t say, “oh well, that’s that.” They work harder, and they do it better than the competition.
Very simply stated, a compelling message consists of three parts:
- Some kind of insight that tells the reader or listener why he or she should pay attention to you
- A benefit, i.e. the answer to the question “what’s in it for me?”
- Some kind of proof or reason the listener or reader should believe you
What turns a good message into a compelling message is the subject of part IV of this series on communicating with customers about sustainability and refrigeration. Yes, that’s right, I’ve added a fourth installment to what was originally a three-part series. It will go into the specifics of making your message relevant, believable, appealing, and distinctive. Until next time!
First published in Frozen & Refrigerated Buyer Magazine July 2015
How much R-22 is really in your racks? It may be a lot less than you’re claiming, and that could spell big trouble.
The relationship between the Environmental Protection Agency and the Section 608 regulated community is normally anything but agreeable. Yet in one respect, the EPA regulators and regulated supermarkets are of the same mind: when it comes to charge size, don’t ask, don’t tell.
35% TRIGGER RATE
The much-feared 35% trigger rate calculation in Section 608 depends on a rack’s charge size. Unfortunately, that charge size is often wrong. By a lot. But you won’t find anyone in the industry openly discussing the problem. There is tacit agreement on all sides that the less said, the better.
This issue came to my attention while I headed up the EPA’s GreenChill Partnership. A partner discovered that the amount of R-22 that service technicians were claiming to have pulled out of racks during retrofits didn’t match the “official” charge size in the company’s Section 608 refrigerant records. The discrepancy in the charge numbers was as much as 30-35%. This would not be a compliance problem if the calculated amount of R-22 in the records were 30-35% lower than the amount that was pulled out of the system. But it wasn’t. They were pulling significantly less R-22 out of their systems than they had on the books.
So, was someone skimming R-22 out of the systems that were up for retrofit? Was a lot of R-22 being vented during the retrofit process? Those two potential causes were easily eliminated by close supervision of the next retrofits. There truly was significantly less R-22 in the racks than the company had thought, and these artificially high charge sizes had been the basis for the company’s trigger leak rate calculations for decades. Upon further investigation, we found that this company wasn’t alone.
A lot of missing R-22 is a financial problem, but why is it a Section 608 problem? Leak rates are a factor of the amount of refrigerant leaked and the amount of refrigerant in a rack. A 300-pound leak from a rack that has 1,000 pounds in it is a 30% leak rate. If that rack really has only 800 pounds in it, then the leak rate is actually more than 37%, which exceeds the Section 608 trigger rate.
The Section 608 trigger rate of 35% is what “triggers” additional compliance obligations. Supermarkets are supposed to repair all known leaks in their systems, and they must calculate a leak rate every time refrigerant is added. If a rack leaks more than 35% of its charge in a 365-day period, EPA regulations require certain actions within specific time frames. If a store is unable to document the proper actions, heavy fines can follow. That’s HEAVY in all caps. Up to $37,500 per violation per day. One violation, if not addressed for a month, can lead to a fine of $1,125,000.
A company’s chances of tripping the 35% leak rate trigger are lower if the rack’s charge size is listed as being higher than it really is. In most cases, I suspect that the initial charge of older racks was not deliberately misstated. Companies simply had no idea how much refrigerant was in their older racks, so the EPA allowed companies to estimate the charge size if there were no records of the initial charge. There are several suggested methods for calculating charge size in Section 608, but the EPA also allows a company to develop its own methodology. Many estimates, regardless of methodology, are leading to charge size inflation.
There would not be a problem if there were a way to ensure that the calculations are somewhat correct. But the EPA is unlikely to demand that all the refrigerant be pulled from a rack to validate the accuracy of charge estimates. Nor is it likely to point out that the foundation of the most feared part of 608 is questionable. It seems it is easier for the EPA to accept the status quo than to find a solution to the problem. And the regulated community is unlikely to mention to an inspector that they really don’t know how much refrigerant is in each rack. Thus, we have tacit agreement among all parties to just pretend this isn’t an issue.
I’ll continue tackling the issues around charge sizes in the next issue.
First published in Fresh Thinking June 2015
This is the second article in a three-part series on sustainability and refrigerants.
In part I of my series on communicating about sustainability in refrigeration with consumers, I discussed why it is difficult to make refrigeration relevant to stores’ consumers. Notice I said difficult – not impossible. Just because something is difficult doesn’t mean we shouldn’t try. If it were easy, it wouldn’t be a challenge. And if there is anything we all love in this industry, it’s a challenge.
I received my first lesson in the relevance of supermarket refrigeration to consumers at my very first GreenChill store certification event. I was giving out a gold-level award to a glycol secondary loop store. I was proud. The supermarket company was proud. The store employees were proud. The equipment manufacturer was proud. The people standing in the parking lot listening to the speeches were…bored out of their minds. They just wanted to get into the store to buy their milk.
I was lucky that the equipment manufacturer representative gave his speech before I gave mine. He spoke about all the things that I found fascinating in my new career: reduced charge sizes, low leak rates, glycol on the sales floor instead of thousands of pounds of refrigerant, and easy identification of leaks in the machine room. Babies in carts cried. Mothers became irritated and said, “They’ll be done soon. Knock it off.”
Having had a successful first career in marketing strategy, I used my significant and hard-earned marketing expertise to look around and realize, “This is going to be a lot harder than selling deodorant to people who smell.”
I did my best to change my speech on the fly and spoke about the ozone layer and how important it was that this store had invested in technology that was good for the environment. A few people clapped, probably because I was so overly excited and enthusiastic that they felt sorry for me. The fact that I used every inch of my vocal cords to speak over the traffic on the highway next to us won me an A for effort, I’m sure.
As I drove home I pondered whether there was a way to make consumers care about the harm that refrigerants cause to the environment, and even if there was a way, was it worth the effort?
Though I didn’t convince myself during that trip that the answer to both of those questions was “yes,” I did eventually recognize that, not only was it worth it, it was vitally important that we get this right as an industry.
I have come full circle and now think that we are actually lucky to have sustainable refrigeration as a communication topic. Many other environmental issues require consumers to change their behavior. How many times do you realize at the supermarket cash register that you forgot all your cloth bags in the car again? Or the solution to the problem costs the consumer extra money. How much thought do you put into whether you really want to pay extra for the paper towels that are made from sustainable forests? Or the issue is just downright uncomfortable to speak about in public. Can you imagine trying to talk to consumers about solid waste? If there was ever an environmental issue with an image problem, it’s got to be solid waste. Or the environmental issue has had its heyday and nobody cares anymore. Does anyone ask their car dealer anymore if a new car has a catalytic converter?
Our issue doesn’t require shoppers to change their behavior. It doesn’t cost them extra money, and they get to feel good about doing something about what is touted as the most important environmental issue of today: climate change. Better yet, we actually have solutions to prevent the harmful effects of refrigerants on the environment. This is an issue we can DO something about, as opposed to standing around and talking about it.
So the answer to the question of whether we should communicate with consumers about sustainable refrigeration is a resounding affirmative. The answer to the question of whether we should communicate the same way as we do about plastic bags and sustainable seafood is a hearty no, but that’s the topic of part III of the series.
Given these facts, and given the enormous progress that many supermarket companies have made in reducing the environmental impact of their refrigeration systems, it’s logical to ask why more companies aren’t communicating with their customers about refrigeration.
First published in Frozen & Refrigerated Buyer Magazine June 2015
But which new refrigerant, and when? Competing goals lead to indecision.
Now that the Environmental Protection Agency has finalized the country’s R-22 phaseout plan, supermarket refrigeration teams are trying to come to some conclusions about when and how to get out of R-22. The decision has gotten more complicated in terms of both replacement refrigerants and timing.
Many years ago, companies wanting to get a head start on R-22 retrofits only had to choose between R-404A and R-507A. Both were good for the ozone layer, but disastrous for the climate. Both more than doubled a system’s direct greenhouse gas impact. Of course, the broad majority of the population didn’t care much about climate change back then, and those who cared didn’t have any other alternative anyway. The refrigerant choice wasn’t good, but it was clear. In terms of timing, it was also clear that retrofits needed to be carried out before R-22 became scarce and expensive, so carrying out retrofits at a steady pace was key.
With the advent of the 407 series of refrigerants at the beginning of this decade, companies that cared about global warming had better refrigerant options in R-407A and R-407F. They were good for the ozone layer, and they had similar global warming potentials to the R-22 they were replacing. With the public’s interest in climate change on the rise, and pilot studies of the 407 series refrigerants indicating energy parity and an easier retrofit process, the choice was again clear: All retrofits should be carried out with one of the 407 series refrigerants. Supermarket companies retrofitted their leaky R-22 stores as they came up for remodel.Many years ago, companies wanting to get a head start on R-22 retrofits only had to choose between R-404A and R-507A. Both were good for the ozone layer, but disastrous for the climate. Both more than doubled a system’s direct greenhouse gas impact. Of course, the broad majority of the population didn’t care much about climate change back then, and those who cared didn’t have any other alternative anyway. The refrigerant choice wasn’t good, but it was clear. In terms of timing, it was also clear that retrofits needed to be carried out before R-22 became scarce and expensive, so carrying out retrofits at a steady pace was key.
Nowadays, companies have refrigerant choices galore, and while that is a good thing generally, it sure doesn’t make the decision process easy. The EPA has proposed to disallow the use of R-404A and R-507A for retrofits as of the beginning of next year. There are plenty of better choices. In addition to the 407 series of refrigerants, the chemical manufacturers are bringing HFO blends onto the market that are suitable for use as R-22 replacement refrigerants.
These blends have less of an impact on climate than the 407s, but they still aren’t exactly what one would call “low GWP.” Many supermarket companies are piloting the HFO blends now, so the industry should have good data available on the ease of the retrofit process with these refrigerants, as well as the verdict on their energy efficiency.
The difficult decision lies in the fact that the chemical manufacturers are already hinting at the future availability of HFO refrigerants that have little or no impact on global warming. That means that refrigeration teams face the decision of whether to retrofit into 407 or an HFO blend now, or if they should wait to retrofit when the really good choices for climate are available.
I’ve even heard suggestions that the best thing the EPA could do for the environment is to postpone the R-22 phaseout for a year or two. That way, supermarkets will be able to retrofit right into the best refrigerants for climate, as opposed to having to settle for a short-term solution that might, in and of itself, be on the EPA’s hit list of high GWP refrigerants later.
The suggestion reflects a lack of understanding of how the EPA rule-making process works, and there is zero chance that the EPA will postpone its phaseout plan. But supermarkets still must choose whether to postpone their retrofit plans based on the later availability of better alternatives. It’s hard to know the best course of action.
If it’s any consolation to those who face these complicated choices, there are plenty of supermarket companies not even thinking about R-22 retrofits yet. Before anyone refers in envy to the cliche that ignorance is bliss, consider the problems these companies are going to have in the future. Sticking one’s head in the sand is often temporarily easier than facing the problems at hand. Yes, the decision-making process is simpler for those people, but that is often because short-term indecision results in the lack of choices later. And the worst choice is always no choice.
First published in Fresh Thinking June 2015
People ask me all the time if the EPA is ever going to get off their backs about the refrigerant they use. My answer is always the same: The only way that will happen is if the industry stops using refrigerants that harm the environment.
For the first time since the EPA started regulating refrigerants in supermarkets, it is possible for a supermarket to operate using 100% natural refrigerants. With the use of CO2, we have a refrigerant that is safe for the ozone layer and for our climate.
The EPA’s refrigerant regulations for supermarkets were originally intended to reduce the harm that these refrigerants did to the earth’s ozone layer. More recently, the regulations have been used to minimize the global warming impact of refrigerants used in supermarkets. However, refrigerants that help the ozone layer are very potent greenhouse gases, so many grocers fear they are just substituting one environmental problem for another. And more importantly for some, this means that they are doomed to an endless cycle of EPA-mandated refrigerant phase-outs in the future.
There is only one way to be sure that you won’t ever have to go through another refrigerant phaseout: Use natural refrigerants in your store. The natural option that most people are turning to is CO2. Why? Because it’s a good option.
Besides the advantages that have been documented in hundreds of stores throughout the world, as well as the low cost of the CO2 refrigerant, the refrigerant has other pluses. What is the financial value of future-proofing your business against yet another refrigerant phaseout? How much is it worth to not have to worry about Section 608 compliance in a store that uses CO2?
Though it’s hard to say what an average phase-out and the resulting retrofits cost a company, it’s safe to say that it is usually in the millions. If you have enough stores, it can easily be in the hundreds of millions.
The value of not having to worry about Section 608 inspections in your store is more a question of peace of mind, rather than an actual quantifiable monetary savings. Let’s face it, you’ll probably continue to keep refrigerant leak records on your CO2 stores because that is a part of good financial management. But don’t underestimate the value of peace of mind. It’s hard to even imagine what it’s like to not worry about EPA compliance. Regulations have been in place for decades, so a good percentage of people in the refrigeration industry today have never experienced a world free of worries about Section 608.
We can’t retrofit our way out of the world’s refrigerant problem. The only way to solve the problem is by building stores that use refrigerants that don’t cause these environmental problems.
Yes, it’s true that if we rely on new store construction to solve the problem, it will take several decades for existing stores that use harmful refrigerants to reach the end of their lifespan. But we can’t continue to use the same harmful refrigerants forever. And in the grand scheme of EPA phaseouts, 20-30 years is not a long time.
First published in Accelerate America Magazine June 2015
Here’s some advice for supermarkets on how to go about seeking incentive funding from utilities for natural-refrigerant projects.
Accelerate America: Do you expect that utilities around the U.S. will provide incentives for various supermarket systems that employ natural refrigerants?
Keilly Witman: Yes, we’ll see this happen over the next five years. Different regions will jump on the energy savings opportunity at different times. Once the early movers develop methodologies for these types of incentives, other utilities will then roll out their own programs. You’ll start to see incentives on the West Coast, then they’ll spread to the Northeast, and (hopefully) eventually spread to the Southeast. The savings opportunities for utilities are too great for them to ignore.
Having said that, I think you’ll see prescriptive incentive programs for self-contained cases that use natural refrigerants before you’ll see widespread custom incentives for refrigeration systems.
AA: What are the biggest hurdles supermarkets have to overcome to get these incentives?
KW: The biggest hurdle for supermarkets is the amount of time and effort it takes to work with utilities on custom incentive projects.
AA: Do supermarkets need third-party companies or equipment vendors to get the incentives?
KW: That depends on what you mean by third-party companies. If you are talking about companies that specialize in being the middleman in these types of projects, usually in exchange for a percentage of the incentive, then I don’t think supermarkets need them. Supermarkets can certainly manage these projects on their own. It’s just a question of having the people and the time.
Though they don’t need them, it probably does make sense from a business perspective for many supermarkets to use these middlemen. Its a cost/benefit question. These companies cost money, but they save you time, effort, and frustration. Whether you use a third party or not depends on where your priorities lie.
If you are talking about commercial refrigeration engineering firms as third-party companies, I think it’s wise to include their help on incentive projects in their scope of work. They know the ins and outs of the systems, so they can help with a lot of the back-and-forth questions that come from the utility about the various features of the systems. That can save a lot of time for the technical people at the supermarkets who would otherwise have to answer those questions.
I don’t think a supermarket needs an equipment manufacturer to help get incentives, but if I were an equipment manufacturer, I’d offer this service to my customers. These incentives help with supermarkets’ ROI calculations, which help sell systems.
AA: How much lead time should supermarkets give themselves in securing incentives?
KW: That really depends on the type of incentive, which utility you are dealing with, and the amount and type of resources you have available. The only thing that is certain in terms of utilities and lead time is that you always wind up thinking that you should have started the project sooner.
AA: Will utilities eventually take into account the fact that leaks from natural refrigerant systems have minimal or no effect on global warming?
KW: I think that some utilities will take this into account, especially in California where they regulate greenhouse gases. Municipal-owned utilities in California should look closely at the greenhouse gas savings that can be accomplished with the win-win of zero GWP refrigerants and improved energy efficiency. In areas of the country where there is no requirement to reduce greenhouse gases, most utilities aren’t interested in the slightest in the direct greenhouse gas emissions from refrigerant leaks.
AA: Whats the biggest change youd like to see in the way utilities award incentives for environmentally friendly refrigeration systems?
KW: There are a lot of things that I’d like to see change in the way that utilities award incentives. The biggest change I’d like to see is for utilities to get out of their own way on some of these projects. The overall impression that I get from utilities is that they tend to overcomplicate things to the point where projects take so much time and effort that supermarkets just can’t participate in the programs.
I’d also like to see utilities shift their focus from pre-construction modeling of energy savings as the basis for incentives to incentives being based on the validation of real energy savings post-construction. I get the impression that utilities have never met a model they don’t like. But I’ve never met a model that I trust more than real data. A system where utilities take more chances on projects up front and speed up the pre-construction incentive process, with the vast majority of the incentive coming over a period of time upon validation of the energy savings, seems like a better way to do things
This type of change would embed more accountability into the entire industry. Supermarkets would make sure that they can measure the actual energy savings, and they’d evaluate those savings vs. the energy savings claims that equipment manufacturers make in their sales pitches. You’d have more case study write-ups on the projects that worked and which ones didn’t, which would motivate supermarkets and utilities to pursue the technologies that have been proven successful.
First published in Frozen & Refrigerated Buyer Magazine May 2015
Store level programs can hide huge dollar losses from refrigeration leaks.
People often ask me to name the single most effective way to cut supermarket refrigeration leaks, based on my time heading up the EPA’s GreenChill Partnership.
My response usually surprises them: Your first priority should be to switch from an individual-store-based refrigerant management strategy to one that is centralized at headquarters. This switch produced a 10% reduction in corporatewide leaks in one GreenChill partner’s first few months in the Partnership. This partner had more than a thousand stores and this 10% reduction equaled at least 150,000 pounds of refrigerant. Multiply that by about $5.00 a pound way back then, and you get a cool $750,000 cost saving off the bottom line.
What do I mean when I recommend shifting to headquarters refrigerant management? Well, refrigerant management has historically been the responsibility of the individual store. In fact, Section 608 refrigerant regulations place the responsibility for record keeping and repair of leaks at the individual store level. That is the single biggest flaw in Section 608 and the reason it has largely been a failure in reducing and preventing harmful refrigerant leaks.
Headquarters management shifts the responsibility for refrigerant tracking, management, and strategy to a central person who has the responsibility for all stores. Just to be clear: this does not do away with individual store responsibility under Section 608. I would never encourage anyone to flout the law, even one that has as its only accomplishment the killing of trees in the name of superior record-keeping.
If headquarters begins managing refrigerants centrally, there has to be a system in place for individual stores to produce all records required under Section 608, should an EPA inspector ask for them. Centrally managing all required information on leaks greatly increases the likelihood that a store will be able to produce those records. If left to their own devices, individual stores rarely produce adequate leak repair records. The most likely response from a store manager when asked for refrigerant records by an EPA inspector is something like “I don’t have anything to do with that stuff.”
So how did a shift to headquarters management lead to such a huge reduction in leaks in such a short period of time in the example cited above? First of all, calculating a corporatewide leak rate for the first time usually opens the eyes of the top brass to the enormous amount of money a company wastes on replacement refrigerant. And that’s the key: the realization that the best financial path is to solve this corporatewide problem.
An individual store manager looks at refrigerant leaks as a cost of doing business. He or she is often unaware that something can be done about the problem, or if aware, doesn’t have the time to become a refrigeration expert to figure out how to solve it. The store manager’s job is to sell groceries. A person at headquarters who has been hired to tackle this problem would have the knowledge and the time that individual store managers lack.
Centralized refrigerant management leads to quick wins by focusing attention on the horrendous leak rates at some stores. From the perspective of the individual stores, these leak rates are probably considered normal. But a person who has the records for all stores sees that a small number of outliers make up a large percentage of the leaks. He or she can target those stores as the first priority. Sometimes sending out contractors to investigate the problem leads to the simple solution: finding and repairing the leaks instead of just topping off the refrigerant every month. If the problems are more complex, headquarters can allocate funds to tackle them in other ways, including investing in a new system if that saves money in the long-term.
$30,000 FINES PER DAY Centralized refrigeration management often alerts corporate officials to the potential legal liability from non-compliance with refrigerant regulations. At $30,000 per violation, per day, fines can be much more expensive than investing in better refrigerant management.
There are other examples of the benefits in switching to centralized refrigeration management, but they all boil down to the same premise: better companywide refrigeration management results in better companywide financial management. The environmental benefits are a pleasant side effect.