Wednesday, October 6, 2010

Built Environment Panel at Fountain Blue

On Monday night, I attended a Fountain Blue CleanTech event. Fountain Blue is a networking forum run by my neighbor, Linda, for Silicon Valley entrepreneurs, funders (VCs and angels), and wanna-bes like myself. People with an idea get together with people who have money and, sometimes, interesting things happen. I hadn't been to an event for about a year mainly because I have been busy with my new job. This event was about the Built Environment and featured a panel including a collection of entrepreneurs, a builder, a VC, and a guy from  HP who was obviously their home networking "visionary". Since we are right in the middle of a system remodel  to improve the energy efficiency of our house, I thought I would check out what the latest technology is.

Much of the discussion was overhung by the projection that the housing market won't recover in the US until 2014. The panel talked about this projection  at the beginning, not uniformly gloomy but making the realistic assumption that any CleanTech built environment improvement must show some kind of ROI (more on this later). They then went on to discuss their particular startup  or involvement in CleanTech for the built environment. One guy was looking for early stage funding for a company that was in the process of designing roofing shingles made from PET plastic, the plastic disposable water bottles are made of. He accurately described asphalt roofing shingles, which dominate the market in the US, as a problem because they are made from oil and when the oil runs out, no more shingles. But he forgot to note that PET is made from plastic too. When the recycled PET bottles run out,  his company is going to have to buy virgin PET on the market and it is as vulnerable as asphalt shingles to oil depletion.

The topic of home energy monitoring came up, and the usual assertions that "consumers just need more data about how they are using energy to make smart decisions about saving". I turned to my friend Paul and whispered: "People don't care about that. All they want is to be comfortable". A couple minutes later, the VC, Kevin Kopczynski, from RockPort Capital, spoke up and said that they had been approached many times with proposals for companies working on home energy monitoring software and had declined to fund them for exactly this reason. Recently, they funded a company that uses weather report data and data about the house to adjust thermostats automatically so that the temperature stays comfortable. Proprietary algorithms are used to do this. I know we could use this in our home. Our hydronic radiant system has a lot of latency, it takes 2-4 hours to heat the house up to 68 F from 58 F or so where it drops to at night.  So we need to  have the heat come on at 2 AM if we want it comfortable for the two hours before we go to work (and when the temperature goes down  into the 30's, the temperature doesn't make it to 68). But if the nighttime temperature goes up, then the house heats up faster, and it is heated while we are still in bed, wasting energy.

Matt Golden, of Recurve (formerly Sustainable Spaces) was also there. I tried Sustainable Spaces home performance monitoring 3 years ago, and paid $600 for essentially nothing. They did a blower door test and some superficial inspection of my house, got the insulation wrong, then redid the report when I told them about the problem. The report essentially said: "there isn't much you can do for this house, it is pretty well insulated". A year later, I had a thermal imaging test done for $200 by a small company that no longer exists, and it was much more valuable. I could see where the insulation was sagging or had been improperly installed (or didn't exist), and with a blower door test and thermal imaging, it was very clear where there were holes through which air was entering. These guys didn't recommend I do anything either, saying my house was reasonably well insulated, but then they see much worse, and also I guess they knew that fixing the problems and really making our house thermally tight would be difficult.

Matt is really into "low hanging fruit" and he has published on about how much energy could be saved by insulating houses that are uninsulated. Problem is, most of the houses in this country were built from the 60s through the last few years, and they are insulated, though not well sealed at all, especially the houses like ours that were built in the 60s and 70s. A house that is already insulated can't be insulated better without tearing off the walls, either from the outside or inside, or bulking out the walls by installing essentially a second wall and ceiling. So most of the houses in the US aren't "low hanging fruit", they are hanging pretty high (to the tune of $100K+ in California). Recurve is now into using the home performance data it mines from its customers to come up with data driven home models that it can sell to contractors wanting to do home performance improvement. This is, I suppose, a worthwhile goal, but my experience is most contractors have absolutely no clue about how to properly seal a house, or do any other green performance improvement. Until that problem is solved, most green remodeling will be improperly done and so a waste of money. This is the primary reason why we decided to work with an architect having green building experience in our system remodel. 

Greg Howes, of IDEAbuilder, spoke about his company, which designs and builds "prefab" houses. The designs are cut out of wood or steel by automated CAM machines in a factory and fit together at the home site. He mentioned a building in Oregon that went from design to finished product in 2 weeks! Considering we've been sitting here in a torn apart house for 3 months with little progress to show, I was completely shocked. Greg mentioned something about "Passivhaus", a German technology for building a house that uses no energy for heating or cooling, except for the energy generated by the appliances. Active ventilation, like the HRV system we are having installed, is required to keep the air fresh. I spoke with Greg about this afterward, in particular, that the Passivhaus technology was developed for cold, humid climates (Germany, Austria, Switzerland) while in our Mediterranean climate, we have hot dry summers and cool humid winters. This requires a completely different technology. The traditional building materials and architectures for such climates involve walls with lots of thermal mass (adobe) and various tricks of architecture to keep the sun out in winter and let it in in summer. Wood isn't a particularly good material for such a climate.

The other panelists - the builder, a guy from Serious Materials, and the guy from HP - didn't have much interesting to say.

During the summary at the end of the panel session, Kevin Kopczynski had the best summary. He said that people were looking for technologies that didn't require them to make any changes in their lifestyle and required the minimum amount of effort on their part to use. Additionally, the technologies and products had to essentially show payback in 2-3 years that people usually occupy their houses. Products and technologies directed at the commercial market could have a somewhat longer payback time, maybe 7-8 years. Everybody agreed on the panel that if the home upgrades were perceived as essentially free, they would be easy to sell. "Free" in this case means the homeowner doesn't need to invest anything up front, and that the cost of the upgrade went along with the house when the owner moved. The PACE program was the best hope for that, but unfortunately the Feds decided that having the cost of the upgrade be senior debt wasn't acceptable (because it would get paid off first in a repossession). Since the Feds are doing essentially 100% of the home loan financing after the private securitization market collapsed in 2008, their opinion rules.

The event left me vaguely depressed and confirmed the other reason why I stopped going to these CleanTech events. If people aren't expected to change their lifestyle, and want clean tech for free, what hope is there that the problem of global warming is going to be solved by business? People are willing to pay lots of bucks for cell phones, tablet computers, plasma displays, songs on iTunes, and other entertainment and communication technology and content, but they refuse to shell out any money for products and technologies that will reduce carbon emissions. Nobody is committed enough to go through the grief and financial load that we've been going through with our system remodel. The Congress and President have failed in political leadership, in enacting policy that will make carbon-based energy expensive or otherwise encourage people to make decisions that involve less carbon intensive purchases and activities. The Feds even managed to sideline a program like PACE, which wouldn't cost any level of government anything.

The constraints on solving the problem are just too tight.

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