Ahead of Earth Day 2023, we sat down with Dan Cronin, program manager for ENERGY STAR at the Environmental Protection Agency (EPA). Dan spent some time walking us through the impacts of the recently-passed Inflation Reduction Act on the agency, ENERGY STAR’s impact on the environment, how the program adds new product certifications and much more.
Rob Stott: All right, we are back on the Independent Thinking Podcast, and as we’re recording, it’s about, what, a month and 19 days till Energy … or Earth Day? Not ENERGY STAR Day. That’s in the fall. Can’t confuse that. It’s a whole separate thing.
Dan Cronin: That’s right, yes.
Rob Stott: But Earth Day 2023, and we’re leading into it. Mr. Dan Cronin, Program Manager for ENERGY STAR at the Environmental Protection Agency, appreciate you taking the time and jumping in and joining us.
Dan Cronin: Happy to, happy to.
Rob Stott: Yeah, it’s been a while. We did one, I want to say, maybe a year and a half ago or so? Mr. Rick Weinberg was on the podcast with us.
Dan Cronin: That’s right, that’s right.
Rob Stott: But things have evolved and now we got just you and I, and happy to jump into this with you.
Dan Cronin: Absolutely. Same here. Same here. There’s a lot to talk about. A lot of really exciting stuff to talk about, so I’m happy to get the word out a bit.
Rob Stott: Yeah, absolutely. Nice chatting and doing some of that pre-call work, and seeing you guys are really busy, and like I said, I appreciate you having the time to spare a few minutes on a podcast to talk about some of those updates, because it’s really exciting stuff. So before we dive into the Earth Day stuff, and there’s this little Inflation Reduction Act we want to talk a little bit about too, what’s going on at ENERGY STAR right now that’s new that you can tell us about?
Dan Cronin: Yeah, I mean, with the Inflation Reduction Act, it really is a game changer. It’s going to be a game changer for the overall energy profile of the average American home. A decade from now, things are going to look a lot different. There’s going to be a lot more electric appliances, just broadly speaking, installed. There’s going to be a lot more heat pumps of different kinds installed. And what it means is that on one side it’s going to make renewable generation or renewable sources of energy more viable, because you’ll be able to use them with electricity in your home. And then on the other side, you’re going to save a lot more money and hopefully your bills, your electricity or your utility bills, are going to be a lot lower 10 years from now, even dollar-adjusted, than they are today. At least that’s what we’re hoping, so yeah, it’s an extremely exciting time.
The way I think of it, it’s like as a homeowner, you should game plan every year. I’m eligible for this pretty expensive product that’s going to save a lot of energy, save a lot of money on the backend, but for a lot of people it was harder to do that math and say, “I’m just going to spend X thousands of dollars,” in the expectation that you get that money paid back in the form of energy savings. You’re still going to get that, but now you can include that on a tax return, as long as the product is eligible. And we have a list of what ENERGY STAR products are eligible, and you get up to 30% or $2,000 off the cost of, for example, a heat pump water heater that can save three, $400 per year, per year on electricity costs. That’s how efficient they are. That’s incredible. That’s upwards of 20% to 30% of your total annual utility expenditure. It’s totally game changing, totally.
Rob Stott: And I mean, well, game changing for a customer, of course. Well, actually, we’ll start right there. The questions I’m sure you’re getting … You guys have some great resources. I want to give you a chance to talk about those.
Dan Cronin: Oh, yeah.
Rob Stott: I feel like this is an obvious question, but one I have to ask, has it impacted what you guys do on a day-to-day in terms of fielding questions from customers, and maybe even people in the business that are installing these HVAC systems and even the appliances that might be impacted by this?
Dan Cronin: Yeah, well, we’re starting to get a little bit more questions. I think it’s showing up more in the form of website visits, because we’re getting a historic amount of website visits.
Rob Stott: Ah.
Dan Cronin: Thankfully, at the end of last year, when everything kind of firmed up and all the details were solidified as to what’s in, what’s out, we have a handy guide that I shared with you and you could send out to your members, whoever’s listening, that shows exactly which technologies, which ENERGY STAR products are eligible for the IRA tax credits starting this year, starting right now. So, you can call your electrician, call your plumber, and have this stuff done now, and then a year from now when you’re doing your taxes, it would factor into that. And that is true until 2032, and so it resets, so every year, you should do a big project with this in mind.
So yeah, I think early indications are that it is gaining a lot of traction. The retailers are talking about it, because people are frugal, number one, I think, and people generally are getting squeezed by the cost of things now. I mean, what this is, is it’s not just like, “Oh, I’m going to save money on my electricity bill one day.” It’s also just a deal. It’s a deal. It’s a price reduction of an expensive thing that’s going to make a huge difference to your bottom line as an individual, but also in the macro sense, it’s going to make a huge dent in climate change, hopefully.
Rob Stott: Sure. Well, I mean that’s an interesting point too, because it feels like it just amplified the things you guys were already talking about at ENERGY STAR and EPA.
Dan Cronin: Yes.
Rob Stott: I mean, obviously there’s tax credits involved and having to talk about the money and application thing, so there’s questions on logistics. But for you guys, does this make your … I don’t want to say easier, because again, I don’t want to sound like I’m simplifying what you do.
Dan Cronin: No, it’s good.
Rob Stott: But does it make your message easier to deliver and get across to customers?
Dan Cronin: Well sure, because everybody, when they saw an ENERGY STAR product, a lot of the success of our program was also related to utility rebates. For example, lighting was and still is one of the most popular ENERGY STAR categories in part because they save a ton of money compared to the non-ENERGY STAR product. But also, utility companies would spend part of their budget on applying rebates to those products, and then in the nationwide world, you’re talking about for the last 20-plus years, applying rebates to appliances. So a lot of your members, I’m sure, have had involvement with the local utility who comes in and says, “Hey, we want to apply X amount of dollar rebate to every clothes washer or dryer you sell, as long as it’s an ENERGY STAR product that saves energy on the back end.” Yeah, so in that sense, there was a little bit of understanding from that side.
But now, it’s gaining a lot more traction because the IRA tax credits are a different scale, totally different magnitude, than those types of smaller rebates. These are the types of cost reductions that would get a person not even engaged in what energy efficiency is or whatever their motivation is, it doesn’t really matter, to getting them to perk up and say, “Oh, I need to call my installer, or my HVAC person, to have this put in.” Because just put it on an Excel spreadsheet, it makes sense, right?
Rob Stott: Yeah.
Dan Cronin: So, you’re going to save.
Rob Stott: No, that’s awesome. And I mean it’s cool because it’s also, just looking at it from the nationwide perspective and the expansion of our members and what they do to this whole home, it’s all about everything in the home. And so appliance guys and knowing how easily they could … Again, I use the word easily lightly.
Dan Cronin: It’s fine. You’re right.
Rob Stott: But they could model their business to, “I’m selling these ENERGY STAR appliances.” HVACs are there. It’s all part of that in-home experience, so being able to sell, and again, I feel like it just seamlessly translates the conversation here and we could segue to talking about the ENERGY STAR home and everything you guys are doing from certifying homes, so it just completes that story.
Dan Cronin: Sure. Right. On another side of our program, we do certify new homes. So if you can build … A lot of large home builders will design their homes to earn the ENERGY STAR so that that home can literally be sold with the logo in the paperwork or somewhere on the home even, in some cases, I think. That’s pretty cool.
But on the product side, which is more of where I work, we have this new platform that, I would say, aligns really nicely with the IRA tax credits, and it’s called the ENERGY STAR Home Upgrade. The idea is that ENERGY STAR is a big program. We cover over 75 product categories. And to that average person, that sounds like a ton, and it’s almost a little overwhelming. So what we did is we said, “Okay, what are the core products that the average homeowner would need to really make a deep reduction in their energy costs, but also the energy intensity and greenhouse gas intensity of their home?”
And so we came up with the ENERGY STAR Home Upgrade, and it includes products that are insulation and windows and things like that, but also EV charger, smart thermostat, heat pump water heater, and as well as an air source heat pump for the whole house. They’re different products, they have different characteristics, but let’s say you did all of them, you’re going to make a huge dent in your own energy costs. But also in the macro sense, as I mentioned before, if more and more people do this because of, it could be their own cost savings reasons or because they want to help mitigate climate change, either way, they’re going to save money. Because a lot of those products in the Home Upgrade are also eligible for tax credits.
And I’ll share the details with what’s in the Home Upgrade. We have a bunch of really great point-by-point facts as to how much you’re going to save, the characteristics, what to look out for if you’re thinking of installing these things. And so, that’s another exciting thing, because that in and of itself is actually starting to get more traction that yes, there are these great tax credits out there, but how do I make that tangible as a consumer, the average person? And ENERGY STAR people are much more familiar with, so we think that this is going to be a way for those products to get into homes more efficiently. And we’re in the efficiency business, right, so it’s not just a product, but it’s also kind of how it gets there, how it gets to the home.
Rob Stott: Right, efficiency from an energy standpoint and a business standpoint. I like that.
Dan Cronin: We try.
Rob Stott: No, that’s awesome. I mean, too, not when I ever jumped on the whole overgeneralization of a generation, but when you think about the things that are reported and said about the Millennials, Gen Z, the upcoming … The impact of how a brand or a company or what they’re doing impacts the environment, environmental impacts have been a big deal to younger generations, and this is something, like the way the story’s being pitched is one that it’ll matter to them.
Dan Cronin: Yes.
Rob Stott: And as a retailer, as a business owner, someone that might have direct line of sight or an impact on the home in a way that you’re improving the environment, that’s going to matter to that customer.
Dan Cronin: Yeah, it’s true. Customer preferences have changed and are rapidly changing. And I think that it’s important to emphasize that Millennials are the largest generation in the US, and probably, I say this as a Millennial, that we probably have the largest pull in how a product gets marketed, which product comes to market, if it’s worth it for a manufacturer to put in the R&D to create a more efficient product that’s going to use less electricity or less natural gas, whatever it is. And to make moonshot products that fundamentally change the game. That has been the case in the past, but now I think the value proposition is becoming a lot clearer, because people want to feel good about what they buy, right?
Rob Stott: Yeah. No, absolutely, and one Millennial speaking to another, I wholeheartedly agree. It’s cool to see how these stories are changing and how the pitch of these products and things like that. It’s making a difference, and it matters.
Now, we could dive into this and I feel like we’ve got a whole decade of episodes ahead of us as this program, the IRA program, continues to evolve. And of course too, we recently had the conversation with our own Frank Santner about the things we’re still looking out for, because obviously things are in motion now on the federal level, but still lots to be decided at the state level for how these tax credits will roll out and things like that. But plenty that we’ll still be in touch on, for sure, between you and I and Nationwide Marketing Group and our members as well.
But want to change course a little bit because we are just a little bit ahead of Earth Day, like we said at the top.
Dan Cronin: Sure.
Rob Stott: Just about a month out. Obviously you guys, you have that event in the fall, or that is ENERGY STAR Day. I imagine that’s the quintessential Super Bowl for you guys. But is this like the Pro? Is Earth Day like the Pro Bowl?
Dan Cronin: Yeah, we’re making nachos. We get the whole family over.
Rob Stott: Got any big plans?
Dan Cronin: We’re wearing jerseys. Yeah. Well, it’s not quite that type of a celebration, but I mean, okay, on the Earth Day side, that predates ENERGY STAR by, I think, a few decades. But we do celebrate Earth Day along with all of our partners, our retail partners, manufacturers and utilities, everybody in between, to call attention to the fact that when you buy an ENERGY STAR product, you are contributing to reducing your own personal GHG footprint, as well as contributing in the larger sense to reducing the country’s energy intensity, which is important. So yeah, last year …
We do a campaign every year for ENERGY STAR, and during Earth Day, this year’s not going to be any different. Our head communications person, Jill Vohr, is in charge of that, and they’re going to come out with, in pretty short order, they’re going to come out with a toolkit for our partners to use that they can take, use on social media, put it on ads. Some of our manufacturer partners have put things that we’ve collaborated with on Times Square ads and stuff.
Rob Stott: Wow.
Dan Cronin: We create a pretty simple thing that all of our partners can take and then they run with it. That’s the idea, and we’re really grateful for that.
Rob Stott: No, that’s awesome. So again, just another way to continue to push your message. Well, not even just yours, but the message of energy efficiency and impact of these products on climate change, so obviously a lot of resources and things that are available out there for retail partners to piggyback off of and manufacturing partners as well. Got to call them out.
Dan Cronin: Everyone.
Rob Stott: No, but everyone that’s involved with the program, lots of really great resources that I know even nationwide, we’ve leveraged it in the past as well.
Dan Cronin: Oh, every year, every year you guys definitely participate. And not only that, but you also alluded to the fall event, which is ENERGY STAR Day, which is us talking about how great ENERGY STAR is. Definitely, definitely a little self-serving. But it’s an important one, because it does recap on an annual basis what we do, how much energy we saved in a given year. And I was just actually looking this up the other day, but every year, ENERGY STAR, the program itself, that includes commercial buildings, residential, new home construction as well as products, we reduce the equivalent of 5% of the entire country’s energy usage every year.
Rob Stott: Wow.
Dan Cronin: That is an enormous amount of energy that we’re essentially taking off the table. 5% more energy would require tons more of not just greenhouse gas emissions, but more generation capacity that these utilities don’t have to run. They don’t have to run coal or natural gas or other types of power plants for a need that isn’t necessarily necessary anymore. And yet, we’re still, as a country, getting more and more productive while it’s using less and less energy, and ENERGY STAR is definitely a big part of that. So yeah, I mean, there’s a lot that we can celebrate, and that’s one of the big things, one of the big takeaways that I like to mention to people.
Rob Stott: Absolutely. No, I mean, it’s kind of the ideal thing that you think about in any sort of job is, you have that end goal. You want to see the impact. I mean, it’s certainly a program where when you’re involved in it, you see the direct impact because those numbers come back on. I love the stats that we see every year about the equivalent of how many cars have been taken off the road, and just all of the things similar to that where what you’re doing from the ENERGY STAR side, from the retailer side, and the manufacturer, all of that combined, just the impact that it has on the environment. I mean, it’s materialized and you see it.
Dan Cronin: Yes.
Rob Stott: It’s cool to know that you played a small part in doing that, so I mean it’s an awesome message to be able to share.
Dan Cronin: Exactly, yeah. It’s not as tangible as something like manufacturing or even retail, where you can see people coming in out of your stores and you can see the register at the end. The result of what we do every day, it can be visualized in Excel, honestly. But those numbers make a really significant difference in the overall CO2 content of the atmosphere.
Rob Stott: Well, hey, the healing of the ozone layer that we’ve heard a lot about recently, I’m sure that might have something to do with it. We can’t physically see the ozone layer, but we know it’s healing itself, so that that’s got to mean something to you.
Dan Cronin: I don’t want to go off too far of a tangent, but actually, the Montreal Protocol, which established the structure to solve that very problem of the ozone layer, that was one of the models for ENERGY STAR, that there can be a voluntary process to encourage private sector companies to work together and create something that will allow people to voluntarily make more environmentally-conscious choices. And it’s worked. It worked for the ozone, or is working. I think it’s on its way, and it’s most certainly worked over the last 30-plus years for us. I mean, we started with one little category in ’92 and now we have over 75.
Rob Stott: Well, you mentioned that one category to now 75. I know another recent addition that we had talked about ahead of time before jumping on this podcast, talk about that, because now it kind of brings the kitchen full circle and then we’ll dive into … I’ll let you share the news and then we’ll dive into how those things come about.
Dan Cronin: For sure. Yeah, I’d be happy to talk about the overall process. But yeah, the exciting product that’s still under process now, so it’s not yet finalized, but I’m optimistic that it will eventually become final, is electric cooktops and electric stoves. And the early indication is that, and nothing is final, but the early indication is that it would cover both induction as well as regular coil products. And that is huge for two reasons, if in fact this does occur. My fingers are crossed. But on the electrification side, it will allow more renewable energy to be used by those electric products. Because when you burn a fossil fuel, I mean, if a product only uses a fossil fuel to combust, there’s no possibility that either solar or wind or even hydro energy, or generated electricity, can be used in that. You can only use renewable energy with electric products. And so that’s exciting on the one side.
Then on the other side is the fact that we’ve had refrigerators and we’ve had dishwashers as products for a really long time. And I think this could complete the whole idea of, if you’re remodeling your whole kitchen, you could think of it as an ENERGY STAR kitchen remodel now without wondering like, “Huh, why isn’t the oven one of the categories?” And there wasn’t enough product differentiation until now. So, I’m super excited about that, and I know a lot of your members sell those products, so that is definitely encouraging news for them too.
Rob Stott: No, that’s awesome. And I can already see the ENERGY STAR packages being positioned and sold by retailers. I mean, obviously exciting for you guys to, like you said, fingers crossed, be able to add another category. But you talk about that process. What is that process to identify a category or decide that now makes sense that we have the ability to put that ENERGY STAR certification on a product?
Dan Cronin: Yeah, we have a whole team of engineers and subject matter experts on our products team that their sole job is to look for new products to add to the product portfolio, and to determine, along with the industry, as to whether or not that product will fit within the ENERGY STAR principles, so to speak. And they not only look for new products, but we also want to make sure that the existing products that already have an ENERGY STAR specification that as appropriate, we’re continuing to ramp up the stringency to make it a high bar to get ENERGY STAR.
Because you wouldn’t want 100% of all of one category being ENERGY STAR. You need that differentiation to incentivize R&D for those advanced leaps in efficiency. Even legacy or older technology that’s been around a while, if you incentivize those leaps in energy efficiency, and we’ve seen this happen over and over again, the manufacturers do see the risk reward as a positive one and they’ll put in the R&D for a new way to do the same work, but just with far less energy. So, that’s the 10-cent tour of what we do on the product development side, but it’s integral to what we do, because we’re not just a marketing program. It’s very much a technical, specification-based program that also has this great marketing capacity on top.
Rob Stott: No, absolutely. If and when this category becomes official and available, does it apply to new products developed here from that day moving forward? Or can it be legacy products added in?
Dan Cronin:
I don’t know how they’re going to structure it. This is all public.
Rob Stott: Sure.
Dan Cronin: You can actually go on our website and search for ENERGY STAR product development, and it would be one of the new product categories, and I could send you the link to it. But the idea is that the scope of what’s in, what’s out, what’s eligible, what’s not, hasn’t yet been decided. But the overall thrust of the effort is to see if electric stoves are a good fit for the program. Yeah, so I’m optimistic that we will land on something that works for everybody, which is what we try to do.
Rob Stott: No, that’s awesome. And I appreciate that little kind of peeling back of the layers of the onion there and seeing how that works. It’s cool, right? What was the last product category to be added?
Dan Cronin: Oh, wow. I can look on the list.
Rob Stott: I mean, 75, it sounds like they were probably done in bulk at some point to try to beef up what gets certified.
Dan Cronin: Sure.
Rob Stott: So, I don’t know. I can’t imagine it’s too often these days that a category gets added.
Dan Cronin: Yeah. Gosh, that’s a good question. Maybe we add one to three categories a year now. And I would say that we started the right way, which is looking at what products in the home use the most energy, and then starting there. And then as time has gone on, there have been other efforts to get into even commercial products. A lot of people don’t know, we cover commercial kitchen equipment, Fryolators, griddlers, commercial ovens. There’s an ENERGY STAR specification for that because those products are super energy-intensive. Especially, I don’t know if you or anyone listening is familiar with the fast food industry, one of the most energy-intensive industries-
Rob Stott: I can only imagine.
Dan Cronin: Because especially if you’re open 24 hours a day, you have grills operating 24 hours a day, so eking out efficiency from that actually pays dividends in the form of higher margins, because you’re paying less in the form of electricity costs. So, we always look for what uses a lot of energy in the home, or even in commercial grade products, and start from there.
Off the top of my head, I mean, one of the products that I am responsible for, the marketing side, are ENERGY STAR smart thermostats, which are relatively new. A product that didn’t exist six years ago is one of our most successful products now, because it can reduce run time when nobody’s at home, and some of the products learn the habits of the homeowner and cuts off the heat or air conditioning based on whether or not someone’s there or not. That saves a lot of money, as you can imagine. I think the general principle is that ENERGY STAR, our principles of just identifying the most efficient thing, the widget, is applicable to all sorts of products, and it’s going to be applicable to products that we haven’t even conceived of yet, so that’s going to give it longevity.
Rob Stott: No, that’s awesome. And a program and an effort that, like you said, long-lasting. It’s got legs.
Dan Cronin: Yeah, it’s got legs.
Rob Stott: So it’s been around for what, ’90, ’92, right? 1992?
Dan Cronin: Yeah. That’s right.
Rob Stott: So 20, or 31 years at this point, so it’s crazy, but awesome to see that work, again, continue and be impactful, and know that our retailers and our manufacturer partners are playing a small part in that too.
Dan Cronin: For sure.
Rob Stott: So, appreciate everything you guys are doing and I know, like I said, we’ll be sure to catch up again because we got at least another decade of Inflation Reduction Act to talk about here, so lots to look forward to.
Dan Cronin: Yeah. Exactly. I’m going to be repeating myself as many times as possible about products that are eligible for that, so yeah, I appreciate that.
Rob Stott: Yeah, you bet. Well, Mr. Cronin, this was a lot of fun, and like I said, we’ll catch up down the line here.
Dan Cronin: Awesome. Thank you so much.
