Whole-Building Pay for Performance Program Opportunity

This report is the result of the CARD program project Pay-For-Performance: A Tool to Incentivize Ongoing Building Performance.

Abstract

This study explores whether pay for performance programs would be a helpful tool in Minnesota for achieving deeper energy savings. It also sought to identify the barriers and benefits of such offerings. As a model that is seeing increasing uptake in other parts of the country, understanding the opportunity in Minnesota is important for helping utilities, commercial building owners, operators, and developers capture deeper energy savings.

Findings from this study include answers to initial research questions such as is there interest in pay for performance programs in Minnesota and which customers have the most interest and fewest barriers? And, what is the technical potential of this opportunity? However, in exploring questions about whole building pay for performance, more fundamental sub-questions arose. These questions relate to the broader value of whole-building programs versus measure-based efficiency programs and the value of meter-based savings versus the current system of deemed savings. As a result, study findings include both targeted findings about the barriers and opportunities with pay for performance as well as discussion of these broader, more philosophical sub-questions.

This project supported in part by a grant from the Minnesota Department of Commerce, Division of Energy Resources through the Conservation Applied Research and Development (CARD) program.