California HVAC Program Strategy

1. California HVAC Program Strategy 2009-2011 IOU Program Overview CPUC HVAC Workshop June 24, 2009

2. AB 2021 “A revitalized HVAC industry will contribute to increased energy efficiency and reduced peak electricity use. California’s consumers will recognize and demand quality installations and maintenance services of cooling and heating systems that result in lower peak energy use, better comfort, higher reliability, and better indoor air quality…”

3. The Strategic Plan Section 6: Heating, Ventilation and Air Conditioning “The residential and small commercial HVAC industry will be transformed to ensure that technology, equipment, installation, and maintenance are of the highest quality to promote energy efficiency and peak load reduction in California’s climate.”

4. Strategic Planning Goals Goal Goal Results • Consistent and effective compliance, enforcement and verification of HVAC-related building and appliance standards. • Quality installation and maintenance becomes the industry and market norm. • Whole building design and construction practices fully integrate building performance objectives to reduce cooling and heating loads. • New climate-appropriate HVAC technologies (equipment and controls, including system diagnostics) are developed with accelerated market penetration. HVAC-related permits are obtained for 50 percent of installations by 2015 and 90+ percent by 2020. By 2020, 100 percent of systems are installed to quality standards and optimally maintained throughout their useful life. Integrated design and construction practices are standard practice by 2020. At least 15 percent of equipment shipments are optimized for California’s climate by 2015 and 70 percent by 2020.

5. 2009-2011 Statewide HVAC Program • Comprehensive statewide set of downstream, midstream and upstream strategies designed to ensure that: • HVAC technology, equipment, installation, and maintenance are of the highest quality; • Quality installation and maintenance practices are easily recognized and requested by customers; • The HVAC value chain is educated and understands their involvement with energy efficiency and peak load reduction; and • The above changes lead to sustained profitability for HVAC trade allies as the business model for installing and maintaining heating and cooling systems changes from a commodity-based to a value-added service business

6. 2009-2011 Statewide HVAC Program • Consists of seven parts: • Core (over arching program description and implementation plan) • Technologies & Diagnostics Advocacy • HVAC Workforce Education & Training • Energy Star Residential QI • Commercial QI • Residential QM & Commercial QM Development • Upstream Equipment

7. Core An innovative, collaborative, coordinated effort to transform utility-administered HVAC efficiency programs: • Establishes “HVAC Program Management Team.” • Establishes “Joint Program Management Team” consisting of IOU Program Managers from HVAC, Codes & Standards and Emerging Technologies. • Establishes the “HVAC Industry Leadership Task Force.”

8. California HVAC Program Strategy IOU Joint Program Management Team (Coordination of program activities) Provide insight, guidance and prioritization of statewide HVAC efforts HVAC Industry Leadership Task Force HVAC Program Management Codes & Standards Program Management Emerging Technologies Program Management Provide management and oversight of all HVAC program activities Ensure consistent HVAC standards are implemented across 3P programs Third-Party Programs Statewide Residential and Commercial HVAC Program Statewide Codes & Standards Program Statewide Emerging Technologies Program Facilitate and act as a resource for implementation of Task Force activities ENERGY STAR Residential Quality Installation EPA ENERGY STAR Western Cooling Efficiency Center Provide program guidance and participation requirements Commercial Quality Installation Manage program activities under direction from IOUs Upstream HVAC Equipment Incentives Technology and Systems Diagnostics Advocacy Residential and Commercial Quality Maintenance Coordination and sharing of information/best practices Statewide Workforce Education & Training HVAC Workforce Education & Training

9. Technologies & Diagnostics Advocacy Comprehensive technical and policy-based action that addresses HVAC’s critical role in achieving California’s “Zero Net Energy” goals

10. Key Activities Establish partnership with Western Cooling Efficiency Center Benchmark/prioritize in field diagnostics and maintenance approaches Accelerate the market introduction of a range of advanced evaporative-based cooling technologies Increase, optimize and maintain the energy and peak efficiency performance of vapor-compression–based cooling equipment Stimulate market-based solutions to widespread adoption of FDD Technologies & Diagnostics Advocacy Comprehensive technical and policy-based action that addresses HVAC’s critical role in achieving California’s “Zero Net Energy” goals New climate-appropriate HVAC technologies (equipment and controls, including system diagnostics) are developed with accelerated market penetration.

11. HVAC Workforce Education & Training Dedicated effort that offers education and training opportunities targeted at all levels of the HVAC value chain

12. Key Activities Deliver consistent training on ANSI accredited Quality Installation (QI) and Quality Maintenance (QM) through industry training channels Create profitable pathways for HVAC industry practitioners who wish to migrate from HVAC-only to “house as a system” services Develop university level curriculum on whole-building design Establish advanced HVAC training centers, building on a combination of IOU-managed centers, existing HVAC training infrastructure and the education community HVAC Workforce Education & Training Dedicated effort that offers education and training opportunities targeted at all levels of the HVAC value chain Quality installation and maintenance becomes the industry and market norm Whole building design and construction practices fully integrate building performance objectives to reduce cooling and heating loads

13. Commercial Quality Installation Promote the design and installation of commercial systems per the appropriate industry standards (e.g. ACCA, SMACNA and ASHRAE)

14. Key Activities Highlight importance of using minimum standards and encourage their use to size, select, install and commission new and replacement equipment Raise the quality level of middle-tier contractors by setting minimum performance standards Demonstrate the value to consumers of a properly designed and installed system Demonstrate the value to contractors of a sustainable business model based on quality Commercial Quality Installation Promote the design and installation of commercial systems per the appropriate industry standards (e.g. ACCA, SMACNA and ASHRAE) Quality installation and maintenance becomes the industry and market norm Consistent and effective compliance, enforcement and verification of HVAC-related building and appliance standards.

15. ENERGY STAR® Residential Quality Installation Financial incentives to homeowners who have a system installed in accordance with ANSI/ACCA 5 QI-2007: HVAC Quality Installation Specification

16. Key Activities Highlight importance of using minimum standards and encourage their use to size, select, install and commission new and replacement equipment Raise the quality level of middle-tier contractors by setting minimum performance standards Demonstrate the value to consumers of a properly designed and installed system Demonstrate the value to contractors of a sustainable business model based on quality ENERGY STAR® Residential Quality Installation Financial incentives to homeowners who have a system installed in accordance with ANSI/ACCA 5 QI-2007: HVAC Quality Installation Specification Quality installation and maintenance becomes the industry and market norm Consistent and effective compliance, enforcement and verification of HVAC-related building and appliance standards.

17. Residential QM and Commercial QM In partnership with the HVAC industry, deploy two comprehensive O&M programs that improve system performance, capture savings and provide a high ROI to the end-user

18. Key Activities Quantify energy savings benefits of “quality” and “premium” residential and commercial maintenance services Evaluate feasibility of measures that improve system performance (i.e. TXV retrofits, economizers, DCV, portable FDD, ECM motors, etc.) Demonstrate the value to consumers of a) properly maintained systems (per industry standards) and of b) new, but proven “premium” maintenance practice Demonstrate the value to contractors of a sustainable business model based on quality and premium maintenance Residential QM and Commercial QM In partnership with the HVAC industry, deploy two comprehensive O&M programs that improve system performance, capture savings and provide a high ROI to the end-user Quality installation and maintenance becomes the industry and market norm

19. Upstream Equipment Influence distributor and manufacturer stocking and sales practices to increase the market share of energy efficient equipment

20. Key Activities Influence contractor equipment specification choices by increasing the available stocking of high efficiency HVAC equipment Create a regional coalition of utilities that adopt a consistent delivery approach for residential and commercial equipment incentives Use program to influence manufacturer development and contractor stocking of equipment that performs optimally in California’s climate Upstream Equipment Influence distributor and manufacturer stocking and sales practices to increase the market share of energy efficient equipment New climate-appropriate HVAC technologies (equipment and controls, including system diagnostics) are developed with accelerated market penetration

21. Upstream Incentives