BPI-2400 in the context of the HOMES Rebate Program

Snugg Pro is a home energy auditing tool that is capable of generating utility bill calibrated BPI-2400 compliant energy models. Snugg Pro also has the ability to generate two types of uncalibrated energy models (including the Home Energy Score) when the BPI-2400 standard cannot be applied to a home. This article explains the BPI-2400 standard and its relevance to the HOMES Rebates Program (HOMES) in the Inflation Reduction Act of 2022 (IRA).

The HOMES Rebate Program in a Nutshell

The acronym HOMES stands for “Home Owner Managing Energy Savings” (Rebate Program). HOMES is a whole-house energy efficiency rebate program that was signed into the federal budget as part of the Inflation Reduction Act of 2022 (IRA).  You can try our HOMES Rebate calculator here, which demonstrates the applicable rebate amounts as they appear in the bill. You can read our overview of the HOMES Rebate Program in this blog post.

Introduction to BPI-2400

BPI-2400 defines a standardized process to calibrate pre-retrofit energy models to historical utility bills. In whole-house energy efficiency programs, utility bill calibration à la BPI-2400 is one of the (if not the) most important predictors of modeling accuracy. We’ll explain the standard in greater detail in the latter part of this article. For now, let’s understand why BPI-2400 is getting so much attention at the moment…

IRA, HOMES and BPI-2400

HOMES is to be rolled out by state energy offices and comes with a whopping $4.3 billion dollars in federal funding over the next decade. IRA names the BPI-2400 standard as a core component of the HOMES Rebate Program. Going straight to the source, here is the relevant language in the bill that thrust the standard into the spotlight:

“(b) A State energy office seeking a grant under this section shall submit to the Secretary an application that includes a plan to implement a HOMES rebate program,  including a plan--

to use procedures, as approved by the Secretary, for determining the reductions in home energy use resulting from the implementation of a home energy efficiency retrofit that are calibrated to historical energy usage for a home consistent with BPI 2400, for purposes of modeled performance home rebates;”

Link: https://www.congress.gov/bill/117th-congress/house-bill/5376/text

IRA was pushed through Congress through a parliamentary procedure known as budget reconciliation, which focuses exclusively on spending, revenue, and the federal debt limit. This means that many of the finer details in the initial bill were removed during the budget reconciliation exercise.

Further guidance and implementation details for HOMES will be provided by the US Dept. of Energy (DOE). As BPI-2400 is stated as a requirement in the HOMES Act, it is reasonable to assume that the standard will be a requirement in the DOE guidance.

A Closer Look at the BPI-2400 Standard

The full ANSI/BPI-2400-S-2015 standard can be accessed here.

Why The Standard Exists

BPI-2400 serves to define a standardized process and set of requirements in order to calculate energy savings for whole-house energy retrofits. This standard can be applied to single-family detached dwellings and some small multi-family dwellings as defined by the standard. BPI-2400 provides a way to generate both operational savings models and asset-based savings models. An operational model predicts savings taking occupant behavior into consideration. In contrast, an asset-based model predicts savings based on standard operating conditions.

How It works

BPI-2400 outlines a process to build a pre-retrofit energy model that is calibrated to historical energy use. A post-retrofit energy model is then built by modifying the calibrated pre-retrofit model with the proposed energy conservation measures. The difference in energy usage between pre and post-retrofit models represents the energy savings.

BPI-2400 utility bill calibration ensures accuracy by building a pre-retrofit operational energy model with these three elements:

1. Historical utility bills,
2. High certainty observations by the auditor in the home,
3. Low certainty observations or default data that can be trued up by the auditor or the software to improve the overall accuracy of the model when combined with high certainty observations and the historical utility bills.

The infographic below offers an overview of the process of calibrating an energy model to utility bills according to the BPI-2400 standard. For the sake of simplicity, this infographic glosses over some nuances involved in building an asset-based model vs. an operational one. For the complete and authoritative description of the standard please refer to the ANSI/BPI-2400-S-2015 linked above.

In an ideal scenario, the BPI-2400 standard is used by the energy modeling software while the energy auditor is still in the home since they know better than anyone the certainty of each of their observations. Instant utility bill calibration can also help the energy auditor catch and correct potential mistakes in their obserations. You could apply the BPI-2400 standard to an entire set of projects after the fact but this approach would miss out on the value and context that an onsite auditor can provide. Perhaps more importantly: downstream in-bulk calibration happens too late to ensure that accurate energy savings predictions are presented to the program participant during the decision-making process.

Does the standard translate into more accurate savings predictions?

The short answer is yes. In traditional energy efficiency programs, performance is measured by comparing the predicted savings to actual ‘realized’ savings, this is called the realization rate. In a study commissioned by NYSERDA, Performance Systems Development examined 2,000 homes that were retrofitted as part of NYSERDA’s Home Performance with ENERGY STAR program. In one set of projects, the study found that BPI-2400 energy bill calibrated models boosted realization rates from 61% to 91%. In more concrete terms, without BPI-2400, energy models predicted 100 MBTU in savings but only 61 MBTU were actually saved. After applying the BPI-2400 standard, for every 100 MBTU of predicted savings, 91 Mbtus were actually saved. In the final report of the study, the authors explain:

“The study also evaluated a wide range of other factors that could be contributing to reductions in project-level energy savings realization rates. The study found that:

The most significant variable contributing to the relative accuracy of the savings predictions was the degree to which the baseline simulation model was calibrated to match the actual energy bills in the home.

Programmatic application of the ANSI/BPI-2400 baseline energy model calibration standard will likely dramatically increase project-level realization rates (energy savings prediction accuracy).

The medians of the contractor-reported percentage savings and the actual percentage savings were closely aligned, with the realization rate error being driven by a shortfall in the absolute value of the savings prediction resulting from the over-estimated baseline simulation models.”

Gagliano, Jerone, and Greg Thomas. “NYSERDA Home Performance with Energy Star Realization Rate Attribution Study.” Accessed November 17, 2022. https://psdconsulting.com/wp-content/uploads/2015/04/NYSERDA-HPwES-RR-Study-Rev1-012115.pdf.

The study goes on to make a number of recommendations including:

“The most important recommendation is to implement model calibration following the ANSI/BPI-2400 standard. In order to do this, the verification of the criteria in this standard needs to be part of the model submission process.”

Overview of Energy Modeling Approaches

The table below describes residential energy modeling approaches in relation to time-effectiveness (how much effort is required of the auditor/modeler) and the accuracy of total energy savings (TES) predictions.

Snugg Pro is capable of modeling approaches 1, 2, 4 and 5 where approach 2 is the optimal combination of high accuracy and time-effectiveness. Modeling approach #2, which is consistent with BPI-2400 utility bill calibration, is what we recommend for the HOMES Rebate Program. The DOE’s Home Energy Score (HES) falls between 4 and 5. RESNET’s HERS rating uses approach 4. Our sister company Radiant Labs has developed approach 6 for quickly modeling millions of buildings with minimal effort and is currently working on approach 3 when utility bill data is available en masse, but this is still not recommended for actually calculating “revenue grade” savings calculations for something like the HOMES rebates. Utility bill calibration of models with observed data is crucial for delivering an effective program. 

How Modeling Accuracy Impacts Programs

The HOMES Rebate Program is as much about stimulus as it is about energy conservation. In that sense, HOMES is not a traditional program like those funded by utility ratepayers, which undergo a rigorous Evaluation Measurement & Validation (EM&V) process. A key goal of the EM&V process is to assess the realization rate of the program. Differences aside, any program with poor realization rates will likely wrestle with the following issues:

Issue #1: Misallocated rebate dollars

Misallocation happens when energy modeling overestimates total energy savings (TES) causing programs to allocate dollars to underperforming projects. Similarly, when the energy model underestimates TES, rebate dollars can be withheld from legitimate projects.

Issue #2: Difficulty to course correct (even with stringent QA processes)

Poor realization rates are difficult to address downstream. Even when EM&V processes are present, the first EM&V event doesn’t typically occur until a year into the program’s lifecycle, with follow up EM&V events often years apart. This creates limited opportunities for modeling adjustments.

In the case of the HOMES Rebate Program, there is no guidance on federally required  EM&V processes at time of writing. The Act spells out the need for a third party that verifies the work at the time of project completion. Below is the relevant IRA language:

“(4) <>  for quality monitoring to ensure that each home energy efficiency retrofit for which a rebate is provided is documented in a certificate that--
(A) is provided by the contractor and certified by a third party to the homeowner; and
(B) details the work performed, the equipment and materials installed, and the projected energy savings or energy generation to support accurate valuation of the retrofit;”

Issue #3: Erosion of Participation and Support

Homeowners trust programs and their trade allies to help them make sound financial decisions. Often, homeowners plan to offset project installation costs with ongoing monthly energy savings. A project with overestimated savings will result in higher than expected energy bills. This miscalculation can range from being a mild annoyance to triggering a financial crisis depending on the economic situation of the household. Trade allies also stand to suffer reputational harm by overselling savings.

In the long run, programs with poor realization rates are likely to struggle with ongoing participant engagement, while those with high realization stand to benefit from positive word-of-mouth promotion. Policymakers are more likely to take note and renew high performing programs. It follows that a high realization rate should be the goal of any sustainable energy efficiency program.

Considerations for Broader Support of Energy Bill Calibration

Consideration #1: A well-defined approval process for software vendors

While BPI-2400 is well defined and actionable, there remains a need for a clear and manageable approval process to ensure that software vendors are correctly supporting the standard.

The DOE has experience with the process of approving residential energy modeling software, including for:
The federal Weatherization Assistance Program (WAP) as described here.
The Home Energy Score, as described here.

The DOE is well placed to help define the process for software approval, and could provide resources to ease the compliance burden for vendors.

Consideration #2: A fallback methodology when bills don’t meet the BPI-2400 acceptance criteria

In order to perform detailed energy bill calibration, the BPI-2400 standard requires that utility bill data meet certain criteria. The BPI-2400 standard also outlines a simplified calibration methodology for delivery fuels (e.g.: pellets, fuel oil).

In some cases, there may not be enough historical energy usage for utility bill calibration, such as when a home has recently changed tenants or ownership. In such cases, a low-burden proof of recent rental or purchase could be provided by the participant. A fallback modeling approach that does not rely on utility bill calibration could then be permitted on such edge case homes, such as Snugg Pro’s “No Bills” option or the DOE’s Home Energy Score..

Further thoughts

The considerations outlined above are non-trivial but manageable. They require that government and industry work together to develop right-sized guidance for software vendors and program trade allies.

BPI-2400 incorporates a crucial and timely measure of quality control into HOMES. The standard can help in the effective allocation of billions of rebate dollars by providing:

• Accountability from software vendors and trade allies wishing to engage in the HOMES program.
• A form of consumer protection by creating much needed guardrails against far-fetched savings predictions and suboptimal upgrade recommendations.
• Higher quality data flowing to program implementers. This may be even more relevant when EM&V is nonexistent.

Over the next decade, the rigor and integrity of the BPI-2400 standard could also play a significant role in attracting the kind of talent and innovation that is needed for mass transformation of the US building stock.

About Benjamin Mailian

Ben is Head of Product and a co-founder of Snugg Home. He looks after product management, design and engineering management. Ben helps energy efficiency programs get the most out of Snugg Pro by aligning their business requirements with Snugg Pro's configuration and integration capabilities.