Measure Selection Guidelines

1. Measure Selection Guidelines WEATHERIZATION ENERGY AUDITOR SINGLE FAMILY WEATHERIZATION ASSISTANCE PROGRAM STANDARDIZED CURRICULUM – December 2012

2. Learning Objectives Measure Selection Guidelines By attending this session, participants will be able to: • Describe selection criteria for weatherization measures. • Identify Appendix A of the DOE WAP Rule 10 CFR, Part 440. • Explain the concepts of present value and fuel escalation rate as they relate to SIR. • Practice SIR calculations.

3. Measure Selection Guidelines Measure Selection Guidelines • Appendix A • SIR ≥ 1 • Based on DOE-approved audit • Present value of money • Fuel escalation rate

4. Appendix A Measure Selection Guidelines • Can only install measures listed in Appendix A • Materials must meet standards for conformance based on Appendix A • Example: And must have SIR ≥ 1.

5. SIR Data Needs Measure Selection Guidelines • Energy consumption of existing item • Energy consumption of replacement item • Total cost of replacement: • Price and installation costs of new unit • Cost of removal and decommissioning of old unit • Local utility rates • Discount rate • Fuel escalation rate • Present value

6. Fuel Escalation Rate Measure Selection Guidelines Annual escalation rate of fuel prices based on the annual energy price forecasts of the DOE Energy Information Administration.

7. Discount Rate Measure Selection Guidelines • The interest rate at which expected future cash flows can be discounted. • In WAP, includes fuel escalation rate. • Like interest rate paid on a loan, in reverse. Saving $100 15 years from now is worth less than saving $100 today. The discount rate accounts for the time value of money.

8. SIR Calculations Measure Selection Guidelines Alternately: • Use DOE-approved audits with built in SIR • Use spreadsheet PV function

9. Using “PV” Function for SIR Measure Selection Guidelines SIR equation = Where: • %= DOE provided discount rate. • n= Lifetime of measure, in years. • Savings/year is based on local utility data. • Cost= Total cost of installation. - PV (% , n , Savings/Year) ÷ Cost

10. Client Acceptance Measure Selection Guidelines • Appendix A • SIR ≥ 1 • Client acceptance If the client does not want certain measures installed, then you have two choices: • Continue with weatherization, minus the unwanted measures. • Defer weatherization services.

11. Summary Measure Selection Guidelines Measure Selection Guidelines: • Measures must be listed and conform to Appendix A standards. • Measures must have an SIR ≥ 1 based on local costs and savings, with savings discounted to the present value of money. • You cannot force a client to accept measures. • The auditor has the right to defer services.