BARRIERS TO ENERGY EFFICIENCY

Presentation by Abhilash Kantamneni

IN COMMERCIAL ANDSMALL INDUSTRIAL BUSINESSES IN THE UPPER PENINSULA

Challenges - Diversity in rates, policy & zoning

Active BusinessesJobs

Industrial ParksUtility service territories

76

701,715

Generating Economic Development

Active BusinessesJobs

Industrial ParksUtility service territories

76

701,715

Generating Economic Development

1)Analyze the cost and feasibility of implementing

• Solar, Wind, Natural Gas, Retrofitting/Energy

Efficiency, Industrial Waste Recapture, Geothermal,

and Biomass.

2)Recommend policy changes and public investments

3)Suggest improvements to development procedures

4)Determine environmental impacts of implementation

• floodplains, wetlands, endangered species,

sensitive habitats, environmental contamination.

Scope of Work

Renewable Energy Standard

(RES)

10% of all retail electric sales for all

utilities in MI to come from renewable

sources

Energy Optimization Program (EO)

Authorizes EO surcharge on monthly

bills to finance customer Energy

Efficiency upgrades

Net Metering Program

On site renewable electric generation

with credits for monthly excess

generation

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Challenges - Dynamic legislative landscape

1)Analyze the cost and feasibility of implementing

• Solar, Wind, Natural Gas, Retrofitting/Energy

Efficiency, Industrial Waste Recapture, Geothermal,

and Biomass.

2)Recommend policy changes and public investments

3)Suggest improvements to development procedures

4)Determine environmental impacts of implementation

• floodplains, wetlands, endangered species,

sensitive habitats, environmental contamination.

Scope of Work

1) Snapshot of the energy infrastructure, rates, needs,

challenges and opportunities.

2) Create a business case for energy savings

3) Make policy agnostic recommendations for industrial

park managers, EDC and LUGs

New Scope of Work

Barriers to Energy Efficiency in SME

• Imperfect information• Transaction costs• Risk & Uncertainty• Access to capital• Bounded rationality• Split incentives

Drivers for Energy Efficiency in SME

• Targeted intervention• Access to experts• Management culture• Internal competency

Additional Findings

• Benefits of Municipal Utilities

• Not all EDOs are created equal• Not all EO programs are created equal

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Recommendations

• Monitor the policy & technical landscape, align regional objectives with state and federal goals

• Help SME understand their energy bills & costs• Create coalitions to leverage economies of scale for ESCO services

• Work with LUG to create funding tools like PACE• Assist businesses secure representation on boards of utilities that lack regulatory oversight

Abhilash (Abhi) Kantamneni

akantamn@mtu.edu

www.Abhilash.me

@akantamn

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References

• Cagno, E., & Trianni, A. (2013). Applied Energy• Schleich, J., & Gruber, E. (2008). Energy Economics

• Nagesha, N., and Patil Balachandra (2006) Energy

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1. High demand, low energy

2. High demand, high energy

3. Low demand, low energy

4. Low demand, high energy

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