Texas Heat Spurs Surge in Sales of Energy-Efficiency Upgrades

Efficiency firms in Austin in particular say they're experiencing a boom in business as residents try to keep cool for less electricity and money

City of Austin Power Plant
City of Austin Power Plant/Credit: Jim Nix

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As heat-swamped Texans crank up the A.C. to fend off triple-digit temperatures, many more residents are turning to energy-efficiency firms to help them rein in soaring electricity bills and reduce their use of the state’s nearly maxed-out power supply.

For residents of Austin, a citywide habit of energy conservation means plenty of companies are already there to meet the demand.

WellHome, a Daytona Beach, Fla.-based energy management consultant, says the extreme weather has driven up sales for home efficiency audits at its offices in Austin, Dallas and Houston since late May, when the heat wave first hit the Lone Star State.

“Record heat is very uncomfortable for folks … and their utility bills skyrocket” when they run the air conditioning all day, said Jeff Caveney, the company’s senior manager of sales and marketing.

“Extreme temperatures, more than anything else, make it smart to open up an energy-efficiency office [in Texas],” he told SolveClimate News.

WellHome offers efficiency evaluations and installs energy-saving insulation, heating and cooling systems, windows and lighting while tightening air leaks around the house. In addition to its Texas branches, the company has 17 offices in 14 other states and Washington D.C.

Compared with figures from January to April, customer inquiries for WellHome’s services in Austin alone jumped 172 percent from May to July. The number of in-home assessments ticked up by 66 percent, and sales from energy audits were up by 86 percent in that same period.

Central Texas typically undergoes a week or two of 100 degree-plus temperatures during the summer, but not for the 40- and 60-day stretches being felt this year in Dallas and Austin, respectively.

Summer power consumption, as a result, has eclipsed last year’s record of 65,766 megawatts on eight different occasions in August so far, setting a new record on Aug. 3 of 68,294 megawatts, according to the Electric Reliability Council of Texas (ERCOT), which controls and monitors the operation of the state’s electrical power system.

The operator this week signed short-term contracts with NRG Energy and Garland Power and Light to activate two “mothballed” natural-gas units apiece through October. They will provide up to 400 megawatts of backup power should an outage occur during the heat wave.

The accompanying drought hitting Texas is the state’s second-worst single-year dry spell since rainfall record-keeping began in 1895, the driest year being 1918, according to climatologists at the National Weather Service.

Phones ‘Ringing Off the Hook’

With the threat of rolling blackouts and mandatory power and water cutbacks constantly looming, “our phones are ringing off the hook right now,” said Lloyd Lee, president of Austin-based Hill Country Ecopower.

The four-year-old firm installs rooftop solar and small wind systems, plus solar water heaters and geothermal heat pumps. It also partners with local energy auditors to ensure the clean energy isn’t wasted in inefficient homes.

“[The heat] is certainly helping the industry that we’re in right now,” Lee said. “When you’re paying a higher electric bill, that’s when you start to look at” renewable energy and efficiency options.

Ed Clark, spokesperson for city-owned utility Austin Energy, said that air conditioning costs in hot weather account for 80 percent of the average residential bill. The utility estimates it will rake in $4.5 million in additional revenues from elevated energy use in July.

WellHome’s Caveney said its Austin branch conducts the most energy audits among all its Southern offices, thanks largely to an efficiency-minded culture spurred by the state capital’s utility.

History of Efficiency, Green Building

Austin Energy, whose board of directors is also the city council, launched one of first utility-led energy-efficiency programs in the nation in 1982. It now spends between $16 million and $18 million annually for rebates on Energy Star-qualified appliances, weatherization and home improvement projects for around 5,000 customers, Clark said.

In 1991, the utility launched the country’s first green-building program for new construction and remodeling. The program to date has saved nearly 54 million kilowatt-hours of electricity —  equivalent to the amount of energy used to power 5,000 homes every year — and around 66 million gallons of water in the roughly 10,000 homes certified by rating system.

By 2015, all new single-family homes in Austin must be “net-zero” capable, meaning that they have to be able to produce as much energy as they use via solar panels, other renewables systems or efficiency measures.

And, as ERCOT grapples with providing power during a season of record-setting demand, Austin Energy says it still expects to conserve the equivalent of an 800-megawatt power plant by 2020.

The utility already offset the need for a 700-megawatt plant from 1982 to 2006 through its efficiency and green-building programs, Clark said, after it decided not to invest in a $500 million coal-fired power plant nearly 30 years ago.

“Energy efficiency is a key component for our strategic outlook on providing enough power” during the heat wave and into the future, he told SolveClimate News.

For the power it does produce, Austin Energy wants 35 percent of it to come from clean resources like wind, solar and geothermal energy by 2020. It is on track to get 15 percent from renewables — mainly from wind farms in West Texas — by the end of 2011.

Clean Power Strategy for Drought

An increase in clean energy production could boost the utility’s resilience during extended droughts like this year’s, said Jose Beceiro, director of clean energy for the Greater Austin Chamber of Commerce, which aims to create new clean technology jobs and industries in the five-county metropolitan area.

“Around 30 percent of fresh water resources go toward [traditional] power production,” he said. “That’s not sustainable when you’re in drought conditions.”

Austin Energy spends around $4 million annually on rebates to homeowners and businesses for rooftop solar installations to help it meet the 200-megawatt solar carve-out in its renewable portfolio standard. Beceiro said the program had helped grow the number of area solar installers from four to nearly 30 businesses in the past decade.

The utility’s GreenChoice program, which allows ratepayers to pay for a fixed-cost green power premium in lieu of a standard monthly fuel charge, ranks No. 1 in clean energy sales among the 850 utility-sponsored renewables programs nationwide, according to an annual assessment by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL). Austin has held the top spot for nearly a decade.

About 9,500 residential and 450 commercial customers — out of Austin Energy’s 417,000 total customers — purchased nearly 755 million kilowatt-hours of renewable energy in 2010. San Antonio’s city-owned CPS Energy, by comparison, sold 187 million kilowatt-hours of renewable energy and serves more than 700,000 customers.

Austin, San Antonio Go Head-to-Head

However, clean energy advocates say San Antonio is expected to edge out Austin as the top green utility in Texas over the next couple of years with ambitious clean energy goals of its own.

CPS Energy’s Save for Tomorrow Energy Plan aims to cut electricity demand by 771 megawatts — or nearly 11 percent of current generation — by 2020 and is giving out millions of dollars in rebates and incentives for home improvements and energy efficiency.

In July, the utility quadrupled its solar energy goals to 400 megawatts, part of its target of getting 20 percent, or 1,500 megawatts, of its electricity from renewables in the next ten years. It currently gets nearly 14 percent of its power from five wind farms, making it the largest municipal purchaser of wind energy in the country.

Its New Energy Economy plan includes a six-year, 100 percent tax abatement for a 30-megawatt solar farm from SunEdison, plus the corporate relocations of smart grid firm Consent, LED lighting maker Green Star and electric truck manufacturer ColdCar USA.

“These two utilities — Austin Energy and CPS — are doing what the rest of the state has not really been able to do,” said Dave Cortez, a coordinator for the nonprofit Texas Apollo Alliance, which represents labor unions, environmental groups and trade associations.

Deregulated investor-owned utilities, which make up the bulk of Texas’s electricity system, often hesitate to launch aggressive clean energy efforts that could drive up electricity rates and make the utilities less competitive, he said.

“While energy efficiency is appealing to all the different utilities out there, it is difficult for them to really invest it.”