Volts podcast: Andy Frank on how to sell whole-home retrofits to skeptical consumers
In this episode, Andy Frank, president and co-founder of Sealed, discusses his company’s pay-for-performance model for home electrification.
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Text transcript:
David Roberts
One of the greatest riddles of the decarbonization effort is the residential sector, responsible for about 20 percent of US energy-related carbon emissions. There are about 142 million housing units in the US, around 83 million of which are “owner-occupied.” Substantially changing them involves dealing with 83 million separate owners, each with their own circumstances and preferences.
Residential decarbonization seems incredibly difficult to scale up, and attempts to date have not been particularly successful. At the rate we are going, it will take hundreds of years to decarbonize America’s housing stock.
The crew at New York-based climate tech company Sealed is trying something new, imported from the commercial efficiency market. Rather than trying to persuade homeowners to buy and install things with their own scarce resources, Sealed covers all the upfront costs and coordinates the work with trusted contractors. Homeowners pay the retrofit back out of energy savings, which means Sealed only gets paid if there are, in fact, measurable energy savings.
This kind of pay-for-performance arrangement is called an energy services agreement (ESA). Listeners of my pod with Rob Harmon will recognize the concept: customers are paying for metered energy efficiency, in the same way they would pay for energy.
Sealed started small but is growing quickly, so I’m excited to talk to its president and co-founder Andy Frank about the frustrations and failures of residential energy efficiency to date, what he’s learned about homeowner preferences, and what kind of benefits come along with having a fully electrified home.
Without further ado, Andy Frank of Sealed, welcome to Volts. Thanks for coming.
Andy Frank:
Thanks for having me.
David Roberts:
Where do residential emissions and energy use sit in the larger picture? How big of a piece of the climate puzzle are they?
Andy Frank:
They’re a pretty big piece of the puzzle. Home energy use represents about 20 percent of US carbon emissions. It's a big enough piece where we're really not going to be able to meet our climate goals without nailing residential efficiency and electrification. It is a large opportunity, but also one that has historically been very frustrating to make progress on.
David Roberts:
The arguments for home energy efficiency stand regardless of climate change; it makes sense to save money and use less energy to do so. We've talked for decades about weatherization and nation-wide retrofits, etc., but nothing ever seems to get off the ground. Why has this been such a tough nut to crack and why have previous efforts not cracked it?
Andy Frank:
There have been many more ambitious goals than there have been success stories. There's essentially been what I'd call 50 years of failure. The first efforts to really promote energy efficiency – they mostly called it conservation back then – were around 1973, with the first oil embargo, the first big energy crisis. Fast forward to today, we're still not in a great place. At the current pace of retrofits, it's going to take us more than 500 years to retrofit every single
