Spring 2021: Pumping Out the Word on Energy Savings

    • By working through distributors, Energy Solutions helps utilities promote energy-efficient pumps. 

      Utility companies want their customers to become more energy efficient, but sometimes it takes a specialist to move the needle. 

      That’s where implementers come in. With their intimate knowledge of the supply chain, they help create and manage incentive programs to reach business and residential consumers. Increasingly, these programs include incentives for energy-efficient pumps.  

      In this interview, Howard Merson, senior manager of trade ally strategy and management, and Kyle Coumas, senior trade ally manager, at Energy Solutions, an employee-owned, mission-driven implementer. The two discuss how incentive programs work and how they could change the way we sell high-efficiency pumps.

      Why the big emphasis on energy savings?

      Kyle Coumas. Utilities are regulated monopolies, and the governments that oversee them have given them energy savings goals they must reach. Utilities that do this can avoid investing in new power plants and gas pipelines, and that saves customers money on their utility bill.

      Why do utilities need implementers? 

      Howard Merson. There are many reasons. Utilities may not have deep market relationships with people who sell or specify pumps or other equipment. This is especially true of small utilities, who find it tough to get the attention of large distributors and manufacturers. Energy Solutions runs 22 energy efficiency programs around the country, so they trust our experience to increase participation in their programs.

      Do those programs include pumps?

      Coumas. Utility incentive programs started by replacing incandescent lights with energy-saving LEDs. These programs were highly successful, so now utilities are paying attention to other types of equipment, including water heaters, HVAC, food service equipment, refrigeration, and pumps. Pumps are in every home, building, and factory, and have a huge energy savings potential. 

      Is there a large demand for pumps?

      Merson. Bigger than you might think. I can give you an example from an early program I helped implement. Manufacturers’ reps were telling us about all the innovation and advanced technology in pumps, but high-efficiency pumps were not penetrating the U.S. market like they were in Europe. 

      So, we started educating utilities about the opportunities, and in 2013, I helped start a program in Vermont. We thought we would sell about 50 pumps per year. Instead, we discovered the potential was 10,000 pumps—and that is in a state with just 625,000 residents. That’s because homes in Vermont, like the rest of the Northeast, often use hydronic, or hot water, heating. A big house with lots of radiators could have five pumps just to move water to different zones. It was eye-opening.

      So, how do you promote high-efficiency pumps? 

      Merson. In the past, most programs provided rebates, but this is not compelling for end-users. No one likes to complete forms, and only 15 percent of them are ever submitted. The model we are best known for, mid-stream marketing, pulls those forms off the table. It streamlines the process by working with people in the middle of the supply chain, like distributors, manufacturers’ reps, specifiers, and installers.

      We do direct-to-consumer programs as well. Both work and sometimes the utility wants its customers to know they got the rebate from the utility. But you might need a different strategy to reach a specifying engineer or a supermarket replacing a pump in a refrigeration unit buying a larger pump.

      Coumas. It is easier to create relationships with the five or 10 distributors that are responsible for those sales than with every potential buyer.

      How do mid-stream incentive work?

      Coumas. The most important thing we do is provide incentives for distributors to stock high-efficiency pumps. About 80 percent of pump sales occur when a pump fails, and no one wants to wait three days for a replacement. So, having efficient pumps on the shelf and ready to go is really important.

      We also want to be sure the salespeople understand how to promote energy-efficient pumps and have incentives to go out and talk about them with installers and specifying engineers. 

      What kind of incentives do they receive for doing this?

      Coumas. They are usually several hundred dollars per pump directly from the utility. The amount varies from state to state and within service territories. The mid-stream market can use that money however it wants. They can use it to lower pump prices to make efficient pumps more competitive, customer outreach, installer training, or inventory. It’s their choice because they know their markets best. 

      Merson. We typically reimburse distributors for the incentive amount within two weeks of application approval. Some utilities have a reputation as slow payers, partially because of the amount of data they collect. We optimize the amount of information utilities require at the distributor level and make it easier to collect by providing an online software platform that is easy to understand and use. 

      What are some of the challenges in implementing incentive programs? 

      Coumas. The hardest part is getting a program going in a market that is not used to incentives. We often work with accountants, who are not used to issuing a credit ahead of time and then submitting a claim to get reimbursed. We need to explain where and when sales qualify for a rebate, especially for utilities with small, fragmented territories. 

      Merson. We also need to reassure the mid-stream that these programs are here to stay, so they can invest their resources confidently. We work with utilities to ensure they fund their commitment fully. 

      So, how are these programs working? 

      Coumas. Energy Solutions has focused on midstream programs for more than 20 years. On average, they increase participation in utility programs by 900 percent. 

      The Hydraulic Institute has developed a database with a Pump Energy Index for 9,400 energy-efficient pumps. Does that make it easier to implement a program?

      Merson. It’s a game changer. It puts us on a common platform as far as messaging about pump performance. In the past, getting a rebate might involve metering the old pump, installing and metering the new pump, and distributing the incentive based on metered savings. The Energy Rating Database and its Pump Energy Index allows us to offer up-front incentives that are tied to a pump’s rating. 

      How do you think pump incentives will change in the future?

      Coumas. The Pump Energy Index will focus more attention on pumps. With climate change on the agenda and governments imposing higher energy efficiency goals, we will see more incentive programs. If utilities are not looking at pumps now, they ought to be. And we think they will.

      Merson. We’re also looking towards incorporating the Hydraulic Institute’s Circulator Energy Index for smaller pumps. This will give us the opportunity to transition from baseline pumps to a high-efficiency pumps across all pump sizes.

      To learn more about Hydraulic Institute’s Pump Energy Index and to sign up for weekly updates of new, energy-efficient pumps in the Energy Rating Database, go to https://pumps.org/EnergyEfficiency.aspx. To find out about how Energy Solutions promotes a greener future in the marketplace, go to energy-solution.com.

      Subscribe to the Pump Systems Matter Newsletter through out Contact Us form. 

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