Ithaca company awarded $1M for energy-efficiency pilot

THACA — Performance Systems Development, an Ithaca–based firm that develops tools and provides services to improve energy efficiency in residential and commercial buildings, was awarded $1 million by the U.S. Department of Energy on May 5 to pilot a new program called the OpenEfficiency Initiative.

The initiative seeks to improve the energy efficiency of commercial and multi-family buildings across the country by helping standardize the different programs — offered by utility companies, state agencies, counties, and cities — that incentivize building owners to invest in using higher-efficiency building models. That’s according to Gregory Thomas, founder and CEO of Performance Systems Development (PSD), which employs nearly 50 people.

The effort includes standardizing these programs’ use of different tools the Department of Energy (DOE) has invested in and helped develop, says Thomas. Of particular importance are the tools that look at whole-building energy use. In other words, the tools that would help improve an entire building’s energy efficiency, rather than just one component, like light bulbs. But the DOE has never been able to put those tools together into an enterprise-level framework for administering the programs, according to Thomas.

“That’s what we’re doing. We’re putting those tools together, and we’re hoping to drop the cost — to significantly drop the cost — of helping buildings achieve on deep-energy retrofits” and in making new buildings more efficient, Thomas says.

Efficiency tools

One example of a tool the DOE helped develop is OpenStudio, a collection of predictive energy–modeling software that run physics models of buildings in order to determine their energy usage, says Thomas.

The software factors the types of walls, windows, heating systems, and cooling systems into a model, as well as the weather in the area the structure is, or will be. Within the model, the user can change the type of window, for example, to determine how that would affect the building’s energy usage, according to Thomas.

Despite the DOE having worked on a number of such tools, says Thomas, much of it has been largely experimental, or used on a smaller scale. The DOE is providing PSD, Thomas’ company, with funding to “commercialize these tools so that people are not research projects, but that people are actually using them,” he says.

PSD is in an ideal position to accomplish this because of its existing relationships with several DOE-funded labs that help develop its building-efficiency tools, such as the Colorado–based National Renewable Energy Laboratory, the Lawrence Berkeley National Laboratory in California, and the Pacific Northwest National Laboratory in Washington state, according to Thomas.

Efficiency programs

In order to entice uninterested or hesitant building owners into making their buildings energy efficient, the government and utilities offer programs that provide up-front funding in return for such an investment.

“Fundamentally, it’s hard to give away money,” says Thomas, explaining that it’s often public money, so there are a lot of rules associated with administrating those funds, rules he describes as being burdensome and difficult.

“We’re trying to break through that,” he says.

One significant problem facing PSD is the sheer quantity of these programs, says Thomas. Programs like these are offered by utility companies, state agencies, and county and city governments — what Thomas calls “program administrators.” In order to improve the functionality of these programs, and to integrate the DOE tools so they can be commercialized, Thomas says the OpenEfficiency Initiative will also help create templates for program designs, so there is less variance among the programs.

The initiative

Tackling all of these layers — commercializing the DOE tools, applying them to the many existing programs, standardizing those programs — is intended to reduce the cost of delivering the programs, says Thomas, in turn prompting more building owners to make their buildings energy efficient.

A news release issued by the DOE announcing the award money states that last year, 20 percent of the country’s energy usage was by commercial buildings, leaving room for billions of potential savings annually by making them more efficient.

The first real step for the initiative is to have collaborative meetings with administrators, says Thomas. There are a whole bunch of puzzle pieces that his company needs to make fit together, he says. And PSD also needs to work with the individual administrators to help them deploy the software to support their programs. After that, it will begin training people — architects and engineers — to use the tools.

A concrete goal that PSD is working toward right now is getting commitments from program administrators in at least three states to run the pilot of the OpenEfficiency Initiative. Thomas says he has commitments from the Los Angeles County Office of Sustainability in California, and from the utility provider Xcel in Colorado and Minnesota.

PSD is also in talks with program administrators in New York and Pennsylvania, but has not yet received commitments, according to Thomas, declining to name the administrators.

Xcel has already utilized some of the tools that the initiative will be marketing, says Thomas, so it’s looking to further extend its use of the tools. They began implementing them a little over one year ago, and he says Xcel is estimating that it is saving about $500,000 per year as a direct result.

PSD also has two partners in the initiative. Cadmus, a Massachusetts–based evaluation consulting firm, is helping the utilities with regulatory issues related to the calculation of savings, says Thomas, and helping to make those calculations.

Its other partner is the DOE’s National Renewable Energy Laboratory in Colorado. It developed some of the tools being used in the initiative, and has been funded to add new features, says Thomas.

DOE funding

The OpenEfficiency Initiative will provide 300 buildings with at least 20 percent in energy savings, two requirements for receiving the grant money. The initiative is expected to easily overshoot the 300 building minimum, says Thomas.

Seven other companies received awards (PSD is the only New York–based company) from the DOE as part of a larger effort to improve the energy efficiency of buildings across the country, according to the DOE news release. None of the other awards was larger than $1 million.

Thomas say PSD submitted the application for funding to the DOE this past January. Without the grant, he says it would have been very difficult to develop a business model for the initiative.

“We were very excited to win it,” he says. “There was a lot of footwork that went into it, a lot of preparation.” Part of that footwork was securing $1 million in funding from other sources to match the DOE award, says Thomas, another requirement. PSD secured the funding from its partners, particularly Xcel and the L.A. County Office of Sustainability, according to Thomas.

The total cost of the OpenEfficiency Initiative pilot will be more than $2 million. Thomas says being more precise than that is difficult because it depends on what is counted. He says if incentives that will be provided by program administrators are included, the cost of the program increases significantly.

The DOE would like to see the initiative become huge, says Thomas. It expects PSD to recruit more program administrators, in part, with the grant money, but Thomas says his company’s focus right now is on getting the initiative up and running. Additional recruiting will come after. He expects a lot of administrators that don’t want to commit to the initiative right now will warm to the idea once successful implementation of tools and programs has been achieved.

The company

Thomas, the majority owner of Performance Systems Development, founded the company in Ithaca in 1998 as a solo venture. Since then, it has added three more offices — all in Pennsylvania — in Philadelphia, Pittsburgh, and Meadville. PSD leases space at 124 Brindley St. in Ithaca for its headquarters office, which has about 20 employees. The company has 47 employees in total, nearly all of whom are full-time, says Thomas.

The business plans to hire two more employees in the engineering and programming fields as a result of the DOE grant, says Thomas, adding that it will hire more as participating program administrators need additional support.

The company’s biggest years for growth came following the 2008 financial crisis, when significant money was being invested in energy-efficiency companies and technologies, according to Thomas. He declined to disclose PSD’s revenue history.

Thomas lived in Syracuse for 10 years before moving to Ithaca to start PSD. While there, he says he worked for a now-defunct consulting firm, called Synertech, developing new energy-efficiency technologies for low–income programs in the state. He was able to apply those years later after he took over an energy service nonprofit called Syresco (Syracuse Energy Service Company).        

THACA — Performance Systems Development, an Ithaca–based firm that develops tools and provides services to improve energy efficiency in residential and commercial buildings, was awarded $1 million by the U.S. Department of Energy on May 5 to pilot a new program called the OpenEfficiency Initiative.

The initiative seeks to improve the energy efficiency of commercial and multi-family buildings across the country by helping standardize the different programs — offered by utility companies, state agencies, counties, and cities — that incentivize building owners to invest in using higher-efficiency building models. That’s according to Gregory Thomas, founder and CEO of Performance Systems Development (PSD), which employs nearly 50 people.

The effort includes standardizing these programs’ use of different tools the Department of Energy (DOE) has invested in and helped develop, says Thomas. Of particular importance are the tools that look at whole-building energy use. In other words, the tools that would help improve an entire building’s energy efficiency, rather than just one component, like light bulbs. But the DOE has never been able to put those tools together into an enterprise-level framework for administering the programs, according to Thomas.

“That’s what we’re doing. We’re putting those tools together, and we’re hoping to drop the cost — to significantly drop the cost — of helping buildings achieve on deep-energy retrofits” and in making new buildings more efficient, Thomas says.

Efficiency tools

One example of a tool the DOE helped develop is OpenStudio, a collection of predictive energy–modeling software that run physics models of buildings in order to determine their energy usage, says Thomas.

The software factors the types of walls, windows, heating systems, and cooling systems into a model, as well as the weather in the area the structure is, or will be. Within the model, the user can change the type of window, for example, to determine how that would affect the building’s energy usage, according to Thomas.

Despite the DOE having worked on a number of such tools, says Thomas, much of it has been largely experimental, or used on a smaller scale. The DOE is providing PSD, Thomas’ company, with funding to “commercialize these tools so that people are not research projects, but that people are actually using them,” he says.

PSD is in an ideal position to accomplish this because of its existing relationships with several DOE-funded labs that help develop its building-efficiency tools, such as the Colorado–based National Renewable Energy Laboratory, the Lawrence Berkeley National Laboratory in California, and the Pacific Northwest National Laboratory in Washington state, according to Thomas.

Efficiency programs

In order to entice uninterested or hesitant building owners into making their buildings energy efficient, the government and utilities offer programs that provide up-front funding in return for such an investment.

“Fundamentally, it’s hard to give away money,” says Thomas, explaining that it’s often public money, so there are a lot of rules associated with administrating those funds, rules he describes as being burdensome and difficult.

“We’re trying to break through that,” he says.

One significant problem facing PSD is the sheer quantity of these programs, says Thomas. Programs like these are offered by utility companies, state agencies, and county and city governments — what Thomas calls “program administrators.” In order to improve the functionality of these programs, and to integrate the DOE tools so they can be commercialized, Thomas says the OpenEfficiency Initiative will also help create templates for program designs, so there is less variance among the programs.

The initiative

Tackling all of these layers — commercializing the DOE tools, applying them to the many existing programs, standardizing those programs — is intended to reduce the cost of delivering the programs, says Thomas, in turn prompting more building owners to make their buildings energy efficient.

A news release issued by the DOE announcing the award money states that last year, 20 percent of the country’s energy usage was by commercial buildings, leaving room for billions of potential savings annually by making them more efficient.

The first real step for the initiative is to have collaborative meetings with administrators, says Thomas. There are a whole bunch of puzzle pieces that his company needs to make fit together, he says. And PSD also needs to work with the individual administrators to help them deploy the software to support their programs. After that, it will begin training people — architects and engineers — to use the tools.

A concrete goal that PSD is working toward right now is getting commitments from program administrators in at least three states to run the pilot of the OpenEfficiency Initiative. Thomas says he has commitments from the Los Angeles County Office of Sustainability in California, and from the utility provider Xcel in Colorado and Minnesota.

PSD is also in talks with program administrators in New York and Pennsylvania, but has not yet received commitments, according to Thomas, declining to name the administrators.

Xcel has already utilized some of the tools that the initiative will be marketing, says Thomas, so it’s looking to further extend its use of the tools. They began implementing them a little over one year ago, and he says Xcel is estimating that it is saving about $500,000 per year as a direct result.

PSD also has two partners in the initiative. Cadmus, a Massachusetts–based evaluation consulting firm, is helping the utilities with regulatory issues related to the calculation of savings, says Thomas, and helping to make those calculations.

Its other partner is the DOE’s National Renewable Energy Laboratory in Colorado. It developed some of the tools being used in the initiative, and has been funded to add new features, says Thomas.

DOE funding

The OpenEfficiency Initiative will provide 300 buildings with at least 20 percent in energy savings, two requirements for receiving the grant money. The initiative is expected to easily overshoot the 300 building minimum, says Thomas.

Seven other companies received awards (PSD is the only New York–based company) from the DOE as part of a larger effort to improve the energy efficiency of buildings across the country, according to the DOE news release. None of the other awards was larger than $1 million.

Thomas say PSD submitted the application for funding to the DOE this past January. Without the grant, he says it would have been very difficult to develop a business model for the initiative.

“We were very excited to win it,” he says. “There was a lot of footwork that went into it, a lot of preparation.” Part of that footwork was securing $1 million in funding from other sources to match the DOE award, says Thomas, another requirement. PSD secured the funding from its partners, particularly Xcel and the L.A. County Office of Sustainability, according to Thomas.

The total cost of the OpenEfficiency Initiative pilot will be more than $2 million. Thomas says being more precise than that is difficult because it depends on what is counted. He says if incentives that will be provided by program administrators are included, the cost of the program increases significantly.

The DOE would like to see the initiative become huge, says Thomas. It expects PSD to recruit more program administrators, in part, with the grant money, but Thomas says his company’s focus right now is on getting the initiative up and running. Additional recruiting will come after. He expects a lot of administrators that don’t want to commit to the initiative right now will warm to the idea once successful implementation of tools and programs has been achieved.

The company

Thomas, the majority owner of Performance Systems Development, founded the company in Ithaca in 1998 as a solo venture. Since then, it has added three more offices — all in Pennsylvania — in Philadelphia, Pittsburgh, and Meadville. PSD leases space at 124 Brindley St. in Ithaca for its headquarters office, which has about 20 employees. The company has 47 employees in total, nearly all of whom are full-time, says Thomas.

The business plans to hire two more employees in the engineering and programming fields as a result of the DOE grant, says Thomas, adding that it will hire more as participating program administrators need additional support.

The company’s biggest years for growth came following the 2008 financial crisis, when significant money was being invested in energy-efficiency companies and technologies, according to Thomas. He declined to disclose PSD’s revenue history.

Thomas lived in Syracuse for 10 years before moving to Ithaca to start PSD. While there, he says he worked for a now-defunct consulting firm, called Synertech, developing new energy-efficiency technologies for low–income programs in the state. He was able to apply those years later after he took over an energy service nonprofit called Syresco (Syracuse Energy Service Company).