How will the Coronavirus and the crash in oil prices affect the home energy performance industry? These are certainly trying times for many, many businesses. I have listed below the short and, likely, long term impacts of these two crises.
Coronavirus & Oil Prices
Almost everyone is impacted by the Coronavirus pandemic, which has led to half the globe undergoing strict stay at home orders.
What many people are not aware of is the oil price crisis that is also happening. By itself, the crash in oil prices would be major news and significantly affect businesses around the world. Without going into too much detail, oil has crashed from near $63/barrel to $25/barrel with concern it may drop to single digit pricing. Wow!
Energy Auditing Short Term Impacts
Layoffs. The big immediate news is that most home energy auditing has simply stopped. Since most home energy contracting companies only get paid for each audit completed, most workers have been furloughed. This is not good for our workforce.
Worries about workforce retention. The utilities and major companies are worried about keeping their skilled workforce once this crisis ends. There was already a shortage of workers AND the industry has had to work hard to train thousands of auditors nationwide. Now all of that progress is at risk.
Focus on Training & Certification. Eversource, a large Northeast utility, and other areas want to focus on BPI training & certification as a way to keep the workforce engaged. The Building Performance Institute (BPI), which manages the certifications, is using this time to innovate. Here at Everblue, we now allow anyone, anywhere to get BPI certified through remote train and testing.
Less Demand for Energy Efficiency. In the very near term with low gas and energy prices, demand for energy efficiency will go down.
Energy Auditing Long Term Impacts
Turning Point. This crisis is likely a turning point in both the global warming AND the renewable energy debates (See related post). The massive drop in oil and gas prices, along with the massive drops in consumer demand, are going to make new investments in expensive long term projects for oil exploration AND large power plants much riskier. That increased risk will mean fewer projects, which will mean higher prices in the long term.
Environmental Awareness. Have you seen the images of Venice, Italy’s clear canals? How about those stunning images of atmospheric pollution reduction? Many, many people have. I hope that we come out of this crisis with a renewed sense of environmental awareness!
Federal Infrastructure Investment. When the federal government decides to invest in infrastructure as a way out of this crisis, energy efficiency will benefit.
More Demand for Energy Efficiency. The combined effects of increased environmental awareness and more expensive capital requirements for oil & energy projects means energy efficiency will win. It’s way cheaper to conserve energy than it is to spend billions generating it! Yay for home performance.
What do you think? What impacts have you seen or experienced? What is the long term prognosis? Comment below.