ENERGY STAR OVERVIEW November 2004

Overview What is ENERGY STAR? History Accomplishments Key Strategies –Labeling –Superior Energy Management Building Performance Next Steps

The Main Point Reduce ghg emissions through large win-win-win opportunities with today’s energy efficient technologies/ practices –30% savings in many buildings / homes / facilities Provide credible information to buyers to –reduce transaction (research) costs –reduce perceptions of risk –enhance investment in efficient technologies and practices Work with the market place to capitalize on motivations of individual actors

Overcome Barriers Market imperfections have hindered investments in available products and services examples -- lack of clear information about products -- split incentives (builder/buyer, owner/tenant) I want my home/building to be efficient BUT... What does efficient mean? How do you ask for it? Who do you ask? How do you know you got it?

Broad Strategies Residential Commercial / Industrial Labeled Products Corporate energy management % more efficient -- benchmarking, goals, upgrades Labeled New Homes (management, systems more than widgets) -- 30% more efficient -- whole building labeling for Home Improvement excellence Services -- beyond products Labeled Products -- for plug loads -- not system components

History EPA announces ENERGY STAR –First product is computers –ENERGY STAR is US EPA registered mark EPA announces –ENERGY STAR for new homes –ENERGY STAR commercial buildings program EPA/DOE MOU on Energy Efficiency in Buildings –one government label on energy efficient products EPA announces –ENERGY STAR label for whole commercial buildings Broad energy efficiency platform

ENERGY STAR is Broad Platform Residential –label on 40+ products appliances home electronics heating and cooling lighting –label on new homes –broaden to home improvement ducts / home sealing whole house retrofit Commercial/Industrial –Corporate energy management office buildings schools grocery stores hospitals hotels/motels –small business initiative –label on 10+ products –partner with/ train services industry public awareness of ENERGY STAR at 56% 1,400 participating product manufacturers 2,000 home builders 550 retail partnerships / 10,000 stores utilities and state energy groups spending $1 billion or more

Large Environmental Benefit Source: LBNL Analysis, EPA Goals

Accomplishments billion kWh avoided GW avoided -- $8 billion in energy bill savings million vehicles worth of GHG emissions -- 1 billion products sold -- More than 1,400 buildings earning the ENERGY STAR -- demonstrating 40% savings ,000 new homes in the ground

Labeling

Deployment of Existing Technology R&D Building Codes and Standards Increasing Energy Efficiency (Metrics) Number of Unit Sales ENERGY STAR Market Transformation

Success Requires Finding/Building Upon Intersection of Interests Consumer Preferences Environmental Protection Manufacturer/Retailer Interests Utility Program Sponsor Interests Consumer is Key

Building Performance

Normalized EUI varies widely 30 kbtu/ft2 to 340 kBtu/ft2 significant energy cost impacts Age and equipment not significant drivers of EUI New EPA energy performance measurement system –Can’t manage what you don’t measure! –Based on energy bills -- real energy use energy use/square foot adjusted for climate, occ 1 is low, 100 is high 75 + means excellence available for 60% of US floor space by 2004 Commercial Buildings 1 Worst Performers Best Performers Number of Buildings EPA Rating & Energy Intensity (kBtu/ft 2 -year)

Codes not Driving High Performance Source: NBI, California Board for Energy Efficiency, EPA California Office Buildings Buildings 20% better than code can have an energy performance score ranging from Not sending clear market signal.

Focus on Performance Delivers Savings 1400 buildings have earned ENERGY STAR –wide variety in design and size Based survey and on-site audits: –40% less energy and cost than average Offices average $1.20/sq. ft in operation –No single path, but common approach: Good lighting Technologies that control usage and capacity to deliver service when needed Management of control technologies Attention to operations and performance

Next Five Year Program Goals Residential Make ENERGY STAR nationally relevant –ensure products attractive to typical consumer –build meaning as government-backed trustmark –engage consumers on emotional AND rational benefits –continue to engage retailers nationally (SEARS, Home Depot, Lowes) Protect integrity of label / market position Add / promote solutions where significant savings –residential lighting –external power supplies

Residential Continue momentum with new home builders –200,000 labeled homes in the ground –10 to 50% market share in key markets –Over 30% of the top 100 builders actively participate –Address indoor air issues Develop/refine whole home retrofit program –Address savings opportunities beyond products –Home professional training and certification –Promote important home services duct sealing home sealing Next Five Year Program Goals

Commercial /Industrial Promote superior corporate energy management to business sectors with large potential for ghg reductions –commercial real estate, schools, public buildings, retail, healthcare Expand national rating system to new building types 60% of US square footage by end of 2004) Bring new corporate energy management tools to industrial sector expand industrial energy performance indicators Ensure Green Buildings promote superior energy performance Ensure Sustainability efforts promote superior energy performance