How Sealed fixes home efficiency (1/3)

In the last post (http://tmblr.co/ZLbA7tdXu7I2) we talked about what is wrong with the current home efficiency process. In short, home efficiency is an uncertain, confusing and complicated process.

So in order to increase the number of efficient homes, Sealed aims to make home efficiency certain, simple and easy. It’s not rocket science, but can be pretty hard in practice.

Sealed is focusing first and foremost on making home efficiency a more certain prospect, which what the rest of this post will focus on (we’ll talk about the rest in future posts).

“Cost” is by far the top reason people choose not to upgrade the efficiency of their home. This is usually code for not believing that the promised energy savings will actually pay for the costs over time.

We’ve heard from countless homeowners who say they can’t afford efficiency upgrades. And those that do improve the efficiency of their home do not feel certain of the savings benefits, with quotes like this:

“We try to wash when we can do a full load, it’s supposed to be more energy efficient, I hope it is. We generally just do the normal wash cycle, delicate for delicate items. That’s about it. Dryer’s also the same model. Front loading’s more efficient so, I guess they are [energy efficient].“

"We used to have a metal door which was from 1978. It is an oversized door (96 inches wide) and I’m not completely sure if this is the reason but my electric bill went down by around $35 last month compared to last year at this time.”

“At least it has the little Energy Star that makes me feel better about it. The little logos on the appliance means I’m trying to be good.” 

The main reason people don’t feel certain about the benefits is because efficiency is not a “thing”, easily measured. By definition, efficiency is the lack of something, which is much harder to determine. In contrast, it’s relatively easy to measure solar energy, which is producing actual kilowatts of electricity. Efficiency, on the other hand, produces invisible, though just as valuable, “negawatts”. 

The traditional approach to calculating these negawatts is through a process called “Measurement and Verification”, or just M&V for short. M&V usually relies on engineering assumptions based on lab tests and/or standards. At best, M&V can tell you how much a home with particular characteristics will save on average. But for anyone who has seen their actual miles per gallon compared to what was advertised, you know that “actual” results are probably not what is claimed.

 “When people started looking into what they’re actually getting for their gas mileage, they’ve said that their car doesn’t even come close to [the sticker]. Now they’ve redone it and you’ve seen the labels on new cars drop dramatically. If you take out a new car, you can even get a rental car, that new car in the show room, we’re still about 15-20% off that revised sticker, so we don’t really know who’s conducting the test and what their variables are on the test.” 

Very rarely does M&V incorporate actual data, and sometimes the claims can be literally criminal. At Sealed, we have a radical belief the efficiency claims should be based on what actually happens. And we’ve built our business around putting our money where our mouth is. 

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Instead of homeowners taking the savings risk for home efficiency, Sealed takes the risk and splits the savings. We do this by actually paying the post-efficiency energy bills as well as the ongoing financing costs of the upgrades. And then we send a single Consolidated Energy Bill each month based on your past (actual) energy usage plus your guaranteed savings. Here’s a simple graphic of how it works for a home with a $3,000 annual energy bill:

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To keep the compact fluorescent lights on here at Sealed and keep investors happy, we take a portion of the savings and give you the rest. 

And while the process for calculating what your bill “would have been” can be complicated, Sealed is literally able to show how our approach would have calculated your past year’s bill, so you can judge for yourself if we’re accurate or not

With Sealed, you can therefore be confident that savings promised will be savings delivered. We can’t promise the energy use will actually drop as projected, but if we’re wrong, we lose money, not you.

We don’t think we have all the answers yet, of course, but we feel strongly that it is time for someone to step up and be accountable for actual energy savings. So if you want honest, transparent and real savings, look us up.

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