Sustainable Business Conversations, March-April 2017

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Sustainable Business Conversation, March 2, 2017 Topic: Understanding Your Business Through Your Customer's Perspective

It is very important to understand your clients and why they came to you in the first place.

  • Take the time to understand who your customer is and where they are in terms of understanding your business and what you can do for them.
  • One of our group members purchased some property from an older couple who had never done a formal real estate closing before. She learned that she needs to be sensitive to what the other party’s past experience has been. You can wind up either a) scaring someone, b) insulting them or c) making them look/feel stupid. How can you ask pertinent questions without it being insulting? Begin by sitting down to talk and begin to establish a relationship with your client/customer. Maybe say something like, “I talk fast – stop me if you have questions.”
  • One group member rents apartments. When interviewing prospective tenants, they ask them to fill out an application. There are questions such as – What do you know about recycling? How interested are you in being green? They try to gain an understanding of the client and whether or not they are in sync with their business values.
  • Sometimes when we don’t understand the language of a professional (doctor, financial planner), we can be reluctant to ask questions for fear of appearing "stupid." We need to recognize that our clients/customers may not always have a good understanding of our business, our values and what we can offer them or how we can serve them.
  • Understanding another person's perspective is fundamental in theater. We need to be non-judgmental when approaching a character to perform. Whatever they are doing is completely right from their perspective, even though it may seem to not make sense at first from our perspective. What is the conflict this person struggles with?
  • One group member is a mental health therapist: "I am an empathetic listener and pay attention to my client’s point of view. Someone coming to therapy for the first time may feel very vulnerable, especially if they are from another country and have significant cultural differences. I need to be careful not to get too far ahead of someone and give them too much information."
  • A theater director needs to be aware of an actor’s issues and struggles. When something seems off, take a break, have a chat. Talking personally can open a new pathway for the actor to develop a character. Too much information is not beneficial. The director does not share everything with the actor – the actor also need to do their research. Theater provides a buffer – through portraying other people’s lives we learn about ourselves. But theater is not complete without an audience.
  • You cannot do life the same way you do art. It does not work to wait to feel inspired before paying your bills. Inspiration is not consistent, you can’t turn it off and on.
  • Some people are more comfortable with business issues and transactions. However, we've learned that every business is a people business. You have to be willing to learn how to deal with people. People love to talk about themselves. Chapter one of Dale Carnegie teaches that there is a lot of power in getting people to talk and really listening.

Sustainable Business Conversation, March 9, 2017 Topic: Solar Energy Systems, Part 1

Solar panel.png

Weather extremes are more common: First you must understand that most building codes are 20-30 years old and are often seriously out of date with regard to current technologies and weather conditions. Just yesterday we had a historic wind storm with 12 hours of high winds and gusts over 50 mph. Since the Green Garage began construction in Detroit in 2009 we have had extreme events of temperature (high heat, record cold), rain, snow and wind. With climate change it is likely that such extremes will become more common and buildings should be designed with extreme weather in mind.

Using solar energy requires that you get connected to the earth around you. If it’s a sunny day or a cloudy day – you become aware of the impact on the energy produced on your roof. It’s a view into the natural world. :

  • Solar south is not the same as magnetic south (about 23 degrees off).
  • The optimal location is facing solar south and avoiding shade. You want the sun to hit the panels at as close to a 90 degree angle as possible. At our latitude (SE Michigan), that would mean mounting panels at an angle of 42.5 degrees.
  • Optimal placement is often not possible on your particular building – you do the best you can.
  • You need to understand the geometry of the building, places where shade is cast and issues such as being part of an historic district where the panels must not be visible from the street.

It's the wild west: In the early days of the auto industry, there were hundreds of auto companies, the vast majority of which did not survive. The solar industry is in a similar period, a sort of "wild west" phase where anything goes. It’s hard to know which contractor to hire, which solar panel manufacturers will still be in business 10 or 20 years forward. Deals that are posted on websites turn out not to really exist when you are seriously shopping. This “Green flake” factor is a big barrier to making informed decisions.

Things to consider regarding installation:

  • You must have a qualified structural engineer involved in designing the system and its foundations if you plan to install on your roof.
  • You must consider water drainage, snow loads and the strength of the roof complex.
  • At this point we should be designing for higher winds, heavy rain bursts and other extremes of weather. The old 100 year storm calculations are no longer good enough.

Other important things to know about photovoltaic panels:

  • One solar photovoltaic (PV) panel typically has 60 cells that produce direct current (DC) energy.
  • Under ideal (laboratory) conditions, the typical efficiency of a panel is about 12 to 13 per cent, meaning that about 87 to 88 percent of the solar energy reaching that panel is not converted into electrical energy. No building can match the ideal conditions of a laboratory, so energy efficiency will be even less than 12-13%.
  • If the panels get coated with dirt, the efficiency is even lower (so it’s good to have access to wash the panels).
  • Depending on how your array is configured, if part of a panel ends up shaded during the course of a day (by a tree, a wall, etc), the whole array of panels could then function at the reduced level of the shaded panel.
  • Once DC power has been created, it needs to go through an inverter to change it to alternating current (AC) power which is standard in the USA. There is additional loss (about 4 percent) going through the inverter. Now that you have AC power, the electricity can be fed into the household to power lights and appliances. This means that you need to purchase less electricity from the power grid.
  • Most solar PV systems are designed to be connected to the power grid. Designing an off-grid solar system is a whole different level of cost and complexity and is not practical for most people.
  • Unlike photovoltaic panels which convert solar energy into electricity, solar thermal panels heat a liquid (such as water) that flows through them. The Green Garage uses solar thermal panels for radiant heating the building. These panels are more efficient in capturing energy and can transform as much as 80 percent of solar energy into heat. Of course, the most hot water is produced on the hottest summer days, and that’s often not the time that heat is most needed.

Sustainable Business Conversation, March 16, 2017 Topic: Solar Energy Systems, Part 2

Solar collectors on roof.jpg

To work in solar these days you have to be an explorer. The field is changing fast and there is always something new to learn. Here are some important things to know:

  • Solar is inefficient and only makes sense after optimizing the building efficiency with insulation and sealing the envelope. This holistic approach to solar is not an easy sell. Computing the cost of ownership is a good tool.
  • Buying a solar photo voltaic (PV) system includes solar panels and micro-inverters. The most reliable and affordable micro-inverter has been Enphase, but as of yesterday, this product is no longer for sale. The economics of the industry are changing daily and maybe hourly.
  • Since 2008, the cost of solar panels has decreased by about 80%. The industry keeps getting turned upside down as companies or products go in and out of the marketplace. You have to jump in at some point in time even though it’s chaotic.
  • A solar panel is expected to lose about 20% of its capacity over 25 years of operation.
  • One solar panel generates about 250 to 280 watts of power under ideal conditions.
  • The cost of one panel is about $250 and the cost of one microinverter is about $150 – or about $400 for the set. In addition to this equipment you also need mounting frames, clips, wiring and other items.
  • The soft costs of installing a system are really the biggest issue and may double the hard costs of equipment. Soft costs include designing the system, getting permits, structural engineering review of foundations and supports, installation by electricians, and connection to the utility meter. The hard costs are going down fast. However solar installers are still a small cottage industry and the business is unpredictable.
  • As soon as a solar PV panel is held in the sun, it starts to generate electricity. You can get shocked by touching it if you don’t know what you’re doing. Amateurs should not be attempting to install panels themselves.
  • It is important to configure the system of panels properly. One way of connecting an array results in the whole system producing at the level of the least productive panel. This means that if you have 10 panels and one of them is in the shade at some point, the productivity of all 10 panels will decrease to the level of the shaded one.
  • A different way of connecting an array uses Enphase micro inverters installed one to one on each panel. If one panel is shaded or down, the other panels would still work to full capacity.
  • The economics of solar PV systems can be complex. Looking at one array with 42 panels, it generated about 13,500 kilowatt hours (kWh) in a year. As a DTE customer, you would pay about 16 cents per kWh - meaning that the electricity generated was worth about $2,154, or $51.29 per panel per year. Another economic benefit is that the underlying roof can be expected to last about 10 years longer.
  • If you have a super-efficient building, solar PV can potentially cover 3 months of electrical use in the summer. However, in winter the output of solar PV is much less, so that it does not contribute much to the heating regime.
  • When considering a solar PV system, it is important to first improve the efficiency of the building envelope, appliances and lighting. The payback on improving efficiency is much better than the payback on installing solar PV.

Sustainable Business Conversation, March 23, 2017 Topic: Water in the City of Detroit - Storm Water Drainage Charges

Comments from last week's conversation on Solar Energy:

  • A good site for solar resource data is PVWatts Calculator which is published by the National Renewable Energy Laboratory (NREL).
  • Another great online resource is DSIRE, put out by the North Carolina Clean Technology Center. This site has well organized information about tax credits, rebates and incentives related to renewables and efficiency. Information is organized by state and includes creative ways of financing (such as PACE).
  • The Green Garage team has been taking a deep dive into how the connections internal to the solar panel can affect the output of energy, especially where small amounts of shade are involved in the installation. Most solar panels (total of 60 cells) have six rows of solar cells that are connected long-ways in the longest dimension of a rectangular panel. Depending on the wiring sequence and the bypass diode built into the panel, you can have a condition where a small amount of shade on one cell could not only stop energy production in that cell but would also slow down or stop energy production in the chain of 9 more cells in that row that are in full sunshine. Think of the way that sometimes a string of Christmas lights sometimes stops working if only one bulb is burned out. It’s important to understand the wiring sequence so that the panel can be positioned (landscape or portrait) to minimize the impact of small amounts of shade on parts of the panel. Almost every location has something that might provide shade at certain times of day or as the angle of the sun changes seasonally.

Today's Topic: DWSD Storm Water Drainage Charges

Early spring alley.jpg

We are working to understand the system of charges for impervious surfaces (such as roofs or pavement) as rolled out by the Detroit Water and Sewer Department (DWSD) in Detroit. We have a lot of questions:

  • If a property is all grass, with no building or pavement – is there a charge?
  • Is the system designed to handle a 10 year storm without causing CSO overflows?
  • What is the post-construction stormwater ordinance that is coming to Detroit in the future?
  • What is the economic driver for DWSD wanting more money at this time?
  • What actions can be taken? How much money can be saved?
  • How are they going to process the drainage credit applications? Are there enough people on staff who understand the engineering and the issues?
  • How is DWSD going to enforce the process?
  • Are there any innovative financing options?
  • Why are these changes happening at this time? Based on lawsuits or environmental issues?

Here is a summary of the revised drainage charge plans sent out by the city:

Commercial Business Owners Revised DWSD Drainage Charge Plan

City of Detroit Mayor Mike Duggan

March 31, 2017

Mayor Duggan reviewed the rationale, current state and the revised Drainage Charge program.

Rationale: Maintain compliance with the Federal Clean Water Act of 1972, minimize untreated discharge into the Detroit and Rouge Rivers, reduce impervious acreage in the city, improve city records accuracy and move all customers to consistent billing.

Current state: Of the approximate 20,000 commercial properties in Detroit identified, half are billed based on impervious (hard surfaces) acreage, 10% are billed based on meter size and 40% have not been billed for drainage.

Components of the revised drainage charge program:

  1. Impervious acre rate reduced 30% by 2018. Commercial customers currently billed on impervious acreage are scheduled to transition to the $750 per impervious acre rate in April. $661 rate starting July 1. Rate reaches $598 in 2018.
  2. 5-year phase-in for meter-based and newly billed customers. Including transition credits, these commercial customers will pay the $125 rate starting April 2017. $250 rate starting July 1. Transition credits expire in 2022. Meter or newly billed customers previously billed at a higher rate will receive a credit.
  3. Customers receive up to 100% reduction in their drainage charge for impervious acreage removed. Customers who install green stormwater infrastructure projects such as detention ponds, green roofs, etc. can earn up to 50% or more in credits for reduced stormwater volume/flow.
  4. DWSD will establish a $5 million per year capital assistance fund providing a 50/50 match for customers who invest in green stormwater infrastructure. Priority will be given to customers billed on impervious acres at the highest rate.

Drainage charges.png

Sustainable Business Conversation, April 13, 2017 Topic: Stormwater Drainage Charges, continued

  • We learned about the difference between an adjustment to drainage charges and a drainage credit in the DWSD Detroit program. There is a separate form to make an adjustment. Adjustments include:
    • Correcting inaccurate ownership information
    • Joining multiple parcels into a single parcel for water bill purposes (should also reflect parcels recorded with the tax assessor
    • Correcting the amount of impervious area actually onsite for a parcel
    • Correction the area of the site
  • DWSD is offering capital assistance fund providing a 50% match to customers investing in green infrastructure. We understand this to be a loan.
  • Mayor Duggan has been taking steps to make it easier for those new to drainage charges to have time to make improvements by phasing in certain charges. Some see this as unfair to other customers who have been paying these charges for years. Some say that the drainage charge program is being rolled out in a way that is like building an airplane while flying it – and the owner has not yet bought all the parts!
  • DWSD is trying to be flexible and work with customers when information is incorrect. The forms imply that professional surveys are necessary, but expensive surveys are not always necessary.
  • Libby helped someone correct erroneous information for a commercial site by using sketch maps and photographs. DWSD made the adjustments without doing a site visit to verify. It was much easier that the application form makes it appear.
  • After adjustments are made and the parcel information is correct, then it is time to work on drainage credits by:
    • Reducing the amount of impervious cover onsite
    • Installing a new stormwater practice such as
    • Disconnected downspout
    • Bioretention area – rain garden
    • Subsurface stormwater detention basin
    • Surface stormwater detention basin
  • Some other cities don’t plan to separate the older combined sewers but instead install bypass tunnels, huge underground pipes that have lots of capacity and are less likely to overflow. This stragegy works better in hilly areas like Pittsburgh than in relatively flat areas like Detroit.
  • The allocation of costs for solutions to metro Detroit CSO problems was set some time ago in Federal District Court (source?). The city of Detroit was allocated 83% of the costs and selected suburbs with combined sewers were allocated 17% of the costs. Is this equitable and fair?

Sustainable Business Conversation, April 20, 2017 Topic: Stormwater Drainage Charges, Continued: Equity Issues

  • The situation with the new stormwater drainage charges is very complex and is also changing fast. Many people are completely lost trying to understand the drainage charge function. There is a deep need for explanation. People look at a completed project – like the green alley – and have no idea of the journey involved in creating the alley.
  • One root problem that was explained by Lauren of Living Lab is that the soil percolation rate (0.1 inch per hour) set in the DWSD drainage credit applications as the default rate is extremely conservative and is probably much lower than the actual percolation rate of urban soils in Detroit. With such a low default perc rate, the calculations lead to much bigger basins and retention features that are very expensive and may require more land than available on a particular project. In order to challenge the default perc rate, you must conduct a 24 hour onsite perc test, which is quite expensive. Is it fair to use such a conservative number that may lead to overdesign and systems that are unaffordable?
  • Rain barrels are easy to understand but they generally have a 55-gallon capacity and fill up very quickly. The capture rate for rainfall is surprisingly low. Practically speaking, what are we supposed to do?
  • In studying the situation with Detroit churches, about 1/3 of them have been billed for years at the highest rate ($852 per impervious acre per month), about 1/3 of them were billed on a flat rate per water meter and about 1/3 of churches were not billed at all in the past. DWSD has a policy for each situation with the goal of bringing all to the same rate over a 5 year period. For some churches that means a decrease in bills and for others that means a gradual increase.
  • The current effort is an attempt to resolve problems that go back decades. The water department cannot operate at a loss. We are already paying for bonds used to fund past improvements, and more improvements are needed in the future. Revenues must come in through user fees.
  • City/Suburbs:
    • Currently DWSD is getting lease payments (about $50 million a year) from the Great Lakes Water Authority (GLWA) for water and sewer plants and infrastructure in communities outside Detroit.
    • There are political hot buttons and some issues of mistrust regarding water and sewer between the city and the suburbs. Our communities are not used to working well together and creating trust. We argue about who subsidizes who – it becomes a blame game.
    • The stormwater issues have become a crisis at the moment – but are we allowing enough time to find the best solutions for both the city and its suburbs?
  • There are vulnerable populations in Detroit. There are no realistic pathways for people without resources, so protest is their only option. Is protest productive?
  • Legal authorities have set the goal for DWSD to have no more than two combined sewer overflow (CSO) events per year by 2020. Currently there are about 300 CSO events per year and this is down from over 1,000 a few decades ago.
  • Governance is a major issue. Most decisions in this arena are made by executive order, not through legislation. If Detroit city council had been involved in past DWSD decisions, they would have brought very different concerns to the table and the outcome might have been better for minorities. Under the current rules it seems that only larger, wealthy property owners will be able to do things that effectively reduce stormwater runoff.

There should be a goat to fund people and organizations that don’t have the funds to create and install green infrastructure. We could study legal and policy options that would encourage crowd funding and tax deductible support. We’re not being creative enough and investigating all possibilities. Workable financing mechanisms are the best way to address problems of equity. Is Detroit doing enough to pay for their contribution to stormwater flows and to reduce impermeable surfaces owned by the city? The city has policies to plant more trees and to increase vegetation. The Detroit sustainability office will be coming on line soon – should help. What about re-engineering street corridors to include stormwater management? Additionally, 23% of the roads in Detroit belong to the state or the county. They also need to pay their fair share. Large complex structures (such are levies) require strong technical standards to be effective. Governance by lots of smaller communities, each responsible for only their slice, does not work. One weak link in the chain can cause a whole levy system to fail. The technical arm needs to set standards for how tall and how strong a levy wall must be, with all communities held to basic standards. Then each community can decide what color to paint the levy in their area. It does not work to vote on safety standards. The Netherlands and China are able to build and operate large complex things but they have the ability to enforce strong technical standards. We need to change our thinking about solving problems. There is not enough long term thinking about how to create a greater good. Government is supposed to address issues which cannot be solved with a business case. The benefits of infrastructure are on many levels, and include qualitative impacts that are hard to compute in hard numbers. Businesses need to act more like governments and care about qualitative impacts. Now infrastructure systems have become so large and governance has become so lax that maintenance is poor. This goes back to issues of maintaining a commons. Diversity is one of the main reasons that Detroit is still here. People are not all the same – that has kept the city from going under in past hard times. There are too many false walls (religion, race) that separate us. Stormwater issues are bigger than the city of Detroit – there are state and federal implications. This is a national issue. Conversations like this help develop the capacity to create solutions. Basically, we all need clean water. We need to create community and not patronize people. We need to find commonality, not take positions. Let’s plan for a blue economy based on clean water.

Sustainable Business Conversation, April 27, 2017 Topic: Stormwater drainage charges recap and Building strong resource networks through referrals

Stormwater drainage charges recap:

We’ve been talking about drainage charges for a while – what have we learned?

  • There’s a difference between filing adjustments for incorrect information and applying for drainage credits
  • Public awareness of this issue is limited – people believe that if we could just install enough larger pipes, the treatment plant could handle it all.
  • There are immense data challenges that still need to be addressed
  • Any particular property such as a church, could have been overbilled in the past (don’t expect a refund), or underbilled or not billed at all in the past. People make decisions based on past billing practices. It’s hard when they’re hit with big bills with no warning.
  • DWSD experts have come up with technical solutions- but in fact they will be very difficult to implement. Likely to harm lots of people.
  • DWSD makes it sound simple – but it’s not simple.
  • These bills can be very unfair to renters. In one case a new tenant is being stuck with the whole bill from the time the property was vacant. They cannot get water turned on unless they pay $2,000 for bills incurred before they got there. Unfair.
  • Renters may be stuck paying drainage charges but have no ability to install drainage practices that would lead to credits.
  • There are businesses such as a marina that depend on clean water and green infrastructure.
  • DWSD should have information and plans for affordable model solutions that could apply to a typical residence or commercial site. Doing all the design work each time for each site is unaffordable.
  • There are issues with haves and have-nots. Many folks want to use sweat equity to fix up properties – but have no idea how to work with green infrastructure. City departments do not do a good job of explaining these issues.
  • Building code changes are in the process of being drafted. Will the new code compliment DWSD drainage assumptions?
  • An impervious structure about 30 x 30 feet in size will not be charged for drainage.
  • It may be good to apply for adjustments by email.
  • These charges reinforce that it is very difficult to do business in Detroit.
  • Maybe Detroit is not the most difficult city to build in. Ann Arbor is highly regulated and building there takes a lot of work.
  • Detroit’s information systems and data are in shambles. Detroit has the best people who really care about the city, but the worst information.
  • It seems like you need a lot of expensive professionals (surveyor, architect, structural engineer, civil engineer) to create and get credits for green infrastructure.

Building strong resource networks through referrals:

  • Resource networks are grounded in the wisdom and talents of a community.
  • Relationships are crucial.
  • A referral is rocket science – a good one takes real effort. You need to match the person’s need with the talents of the person/company referred.
  • A core strength of Green Garage is the competency to make good referrals. This cannot be automated.
  • For a good referral, start by asking questions.
  • For someone looking for a college:
    • What kind of school do you want? What are your goals?
    • There should be vetting on both sides.
    • It may be good to give a student enough information to empower them to move forward.
    • They need to understand the system that they will be working in.
    • International students may be dealing with big cultural differences and may have been brought up not to ask questions.
    • The consequence to failing a class may be losing a visa and getting sent home. Way more serious than for a local student.
    • Be thoughtful about who you ask for a referral – do they understand you and have an understanding of the field?
  • If you are in the process of hiring a consultant, do not hire until you are clear about what you need and the process to get there.
  • Ask at least 3 questions to see if the referral is a good fit.
  • In Detroit, there seem to be little pockets of information depending on who you know.
  • There is an art to sharing information without giving everything away.
  • It’s OK to share information, but remember that no one can do the things you do in the way you do them. That’s what makes you unique.
  • When I help someone, I want the relationship to work well for both of you. Someone who does not want to do their own work, may not be ready for the next step.
  • What is the leadership team around you as you move forward? Err on the side of cooperation.