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.