A key design decision is identifying what market sector or sectors your program will focus on. Identifying target market sectors requires considering the market opportunity (i.e., where there is an unrealized opportunity for residential energy efficiency improvements) and where your organization and partners can effectively add value to the market. Your market assessment and your business plan may already have helped narrow the options for target markets. Your work on marketing and outreach may also have identified market segments on which to focus. As your program develops and matures, be open to changing your target market sector based on experience. 

To the extent that you need to further define your market sector, the questions below will help. 

What housing sector(s) will you focus on?

Residential energy efficiency programs can address single-family, multifamily, or manufactured homes, or a combination of them. Programs can focus on homeowners, renters, or both. Your market assessment should have determined where the key opportunities are and what housing sector focus has the most potential to help you achieve your goals.

Your choice of sectors will influence your program design. For example, if you are focused on multifamily rental buildings, you will need to encourage both owners and tenants to pursue upgrades. If you are focused on newer manufactured homes you will need to offer different types of home performance improvements than if you are focused on older single-family homes.

What fuel types will you include?

Residential energy efficiency programs typically include electricity and/or natural gas, and some also address heating oil, biofuels, or other fuel types. The decision about what fuels to focus on depends largely on the characteristics of the housing stock you are working with and the types of energy savings you seek (e.g., from heating, cooling, lighting, appliances, etc.). Your decision will also depend on the dominant fuel type(s) in the market; for example, in parts of the northeast, northwest, and some other regions of the country heating oil is the predominant fuel used to heat homes.

If your organization is a utility or working with one, your program will typically focus on the type of fuel the utility supplies. Different types of incentives may be available for different fuels depending on the mix of utilities in your area.  For example, an electric utility may provide rebates for electric system heating upgrades, but a natural gas utility may not provide rebates for natural gas heating systems. Some programs have been very successful at filling gaps in what the local utility addressed or incentivized.

When addressing multiple fuels, programs have a strong opportunity to streamline and simplify the process for customers by coordinating residential energy efficiency services and incentives offered by different types of fuel providers to accomplish the most energy savings with the least amount of hassle for the customer. For example, an electric utility program could partner with a gas utility to offer customers services across all of their homes’ fuel types (e.g., electricity for lighting and appliances and gas for heat and hot water).

What geographic area will your program cover?

Your market assessment should have identified geographic opportunities, such as gaps in existing services. Your geographic boundaries will influence the level of demand and contractor participant interest that your program generates, which are both critical to sustaining a viable program over time and to meeting your goals. For example, if one of the goals of your program is to create jobs, you need to identify and help create a market large enough to support hiring and training new professionals to meet demand. Some larger contractors may not be interested in participating unless the geographic area of the program is in line with their sales territory. Others might be concerned about geographic size and whether they will be able to generate enough work over a sufficient period to justify their costs to participate in the program. 

The choices you make about your geographic boundaries will depend on program priorities and how much you can incentivize your market. If you can’t offer strong financial incentives and there aren’t other compelling factors driving community demand (e.g., high awareness, energy costs, climate concerns), you might need a much larger pool of potential customers to meet your goals. For examples of programs that have broadened their geographic reach after initial program launch, see the Tip for Success, “Make sure there are enough customers in your target market to meet your goals and attract partners.”

Select your geographic boundaries to support your program’s goals and objectives.  Some programs choose to “go broad” and target a larger geographic area, with an emphasis on the number of participants  but not necessarily getting a high percentage of participation from homeowners or large savings from individual upgrades. Other programs choose to “go deep” by prioritizing smaller geographic areas in order to achieve high participation rates and deeper upgrades of individual homes. Finding the appropriate balance in a given place and time depends on market factors and resources available to the program.

• The 2015 American Council for an Energy-Efficient Economy (ACEEE) study, Expanding the Energy Efficiency Pie: Serving More Customers, Saving More Energy Through High Program Participation, looked into factors that influenced participation rates of several programs with varying geographic ranges.  The report found that programs that focus an intense marketing and outreach effort on a smaller geographic area can achieve high percentages of home upgrades in the community. For example:
  • During the 1980’s, the Hood River Conservation Project concentrated intensive marketing and generous incentives on the town of Hood River, OR and its 3,500 eligible residential homes and achieved an 85% energy upgrade participation rate.
• An in-depth examination of program strategies implemented by the DOE Better Buildings Neighborhood Program partners found that restricting program outreach too much or in a way that divides neighborhoods can unnecessarily limit and complicate program participation.

What income levels will you focus on?

The choice of whether to focus on low-income, middle-income, or high-income customers (or some combination) will be driven by your market assessment and your goals. The income level on which you choose to focus will also be influenced by the funding available to you to help customers at different income levels overcome the specific barriers they face.

• A program focusing on low-income markets typically needs to provide higher financial incentive levels or 100% financing but may also be able to partner with programs or institutions providing low-income assistance, such as the Weatherization Assistance Program or a Community Development Financial Institution.
• A middle-income focus may require financial incentives and better-than-market rates (or more flexible eligibility for financing). For more information on middle-income market segments, see the report “Delivering Efficiency to Middle Income Households” by Lawrence Berkeley National Laboratory.
• A program focusing on customers who do not face any significant financial hurdles may not require new approaches to financing and would instead focus on non-financial barriers to upgrading homes.

If your program is targeting products and services to certain income levels, it may need to establish eligibility criteria based on household income. An alternative approach is to target services to a specific geographic community where the income level may be more homogenous.

Market Sector Considerations for Utilities

For utilities, regulatory requirements are a primary consideration when determining the market sectors on which to focus. In addition to the program opportunities a utility identifies through its market assessments, regulators might require that it invest a minimum amount of its total budget in programs for specific rate classes, such as programs for limited-income or small business customers. Typically, these groups targeted by regulators are less likely to participate in generally available programs because they experience specific market barriers that are more pronounced than for the general population, such as a lack of available funds. Regulators may require that utilities make a concerted effort to reach these customers and/or set specific budget amounts. These types of requirements impose some limits on the flexibility of a utility program.

Some jurisdictions employ revenue formulas or spending caps that dictate how much funding is available for addressing particular markets. For example, if 40% of utility revenue comes from residential customers, utilities may need to invest at least 40% of energy efficiency program expenditures in residential programs to ensure that customers are receiving benefits in proportion to their investment. Similar allocations may apply to revenues and expenditures from different fuel types for multi-fuel utilities.

Rules may specify equity in the geographic distribution of program funding, rules or targets for reaching customers with lower incomes, or other factors.

The technology behind air sealing, insulation, and other residential energy efficiency measures is well known, and energy efficient products are widely available. Other types of barriers keep homeowners from pursuing cost-effective home energy upgrades—lack of information, lack of financing, lack of time, inertia, and lack of easy access to trusted contractors.

Once you have determined your target market, you need to understand what barriers are keeping your customers from pursuing home energy upgrades and what your program can do to overcome those barriers. The Marketing and Outreach component of the Solution Center provides information on specific strategies for researching customer motivations and barriers.

Barriers to Home Energy Upgrades from the Home Performance Resource Center

Homeowners may face several different types of barriers to home energy upgrades.  A useful resource that outlines four such barriers is the Home Performance Resource Center’s “Best Practices White Paper”.

Inertia. Even if customers recognize the financial and comfort benefits of an upgrade, they may be put off by the cost, time, and hassles of finding a contractor, scheduling the work, and living through an upgrade project.

Access to capital. Even though energy upgrades pay for themselves over time through energy savings, they still require an up-front financial investment that homeowners may not have or may not choose to devote to energy efficiency.

Public awareness. Many people are not aware of the cost, comfort, and other benefits of residential energy efficiency or the many incentives available to them.

Availability of services. Homeowners don’t necessarily know who to turn to for home energy upgrade services or how to choose a knowledgeable, trustworthy home performance professional.

Resources in the Solutions Center provide information about strategies to help overcome these barriers:

• The Marketing & Outreach component of the Solution Center describes rebates and other financial incentives, which can help overcome consumer inertia.  It also describes public awareness strategies to provide consumers with information about the benefits of energy upgrades as well as the availability of program services and incentives.
• The Financing component describes loan options that can provide customers with access to capital that can be paid off over time.
• The Contractor Engagement & Workforce Development component describes how programs can collaborate with private sector contractors to develop capacity and make residential energy efficiency services available.

Barriers to Installing Ductless Heat Pumps from the Northwest Energy Efficiency Alliance

The Northwest Energy Efficiency Alliance (NEEA) launched a Ductless Heat Pump Project in 2008 with utilities and energy efficiency programs to promote ductless heat pump (DHP) adoption and demonstrate the technology’s viability. After years of implementation, NEEA recognized that there were still significant barriers to full adoption, and conducted consumer research to more fully understand these barriers. Key findings from their study included:

• Only 41% of survey respondents had heard of DHPs.
• The largest barriers to installing DHPs were upfront cost, concerns over improper installation, and difficulty of self-installation (see chart):

Obstacles to Purchasing Ductless Heat Pumps

• Survey respondents who were interested in DHPs were highly motivated by saving money on utility bills. They were also motivated by saving energy, equipment safety, and ease of equipment operation.
• 79% of survey respondents indicated that they would contact their contractors for more information on DHPs.  Online ratings, customer reviews, and friends and family suggestions were also important factors when making final decisions.

Source: “Consumer Messaging for Ductless Heat Pumps and Heat Pump Water Heaters,” Northwest Energy Efficiency Alliance, 2014.

After identifying your target market and the barriers they face to undertake home energy upgrades, decide among a range of possible products and services your program will provide to overcome these barriers. Note that your business plan may already outline the types of services your organization could provide through a residential energy program. Your decisions for which products and services to provide to customers should be based on:

• What will help overcome customers’ barriers to upgrading their homes' energy efficiency and encourage participation
• Where you see gaps in the market that your program can fill
• Your program goals and objectives
• The cost of products and services to the program, partners, and customers
• The capacity of your program, contractors, and partners to provide these products and services.

Examples of services to customers include:

• Education. Some programs focus on homeowner and tenant education to overcome awareness barriers and encourage residents to undertake behaviors that save energy. Although education is often not enough in itself to motivate behavior change, it is a key component of most marketing and outreach strategies.
  • For example, the Energy Upgrade California program in Alameda County, California, provided a guide and training to multi-family building owners on operations and maintenance practices that could reduce energy use and provided them with ideas for tenant education to reduce energy use.
  • The Marketing & Outreach component of the Solution Center provides more information on customer awareness and education.
• Financial or non-financial incentives. Many programs, especially utility programs, provide rebates or other incentives to customers to help overcome barriers related to inertia (e.g., through limited-time offers) or access to capital for residential energy efficiency measures such as new appliances or insulation. A comprehensive evaluation of over 140 programs across the United States found that successful programs offered rebates more frequently than less successful programs, but the rebate amounts they offered were lower (around 25% of project costs). More successful programs also provided direct installation of products (e.g., compact fluorescent lightbulbs and low-flow showerheads) at no or low cost to reduce energy use and encourage customer interest.
  • The Marketing & Outreach handbook on making design decisions provides more information on designing incentives.
• Financing. In addition to incentives, many programs provide financing—often through financing partners and occasionally directly—to overcome barriers related to customers’ access to capital.
  • For example, the Solar and Energy Loan Fund in St. Lucie County, Florida, is a nonprofit Community Development Financial Institution focused on facilitating home energy upgrades by providing loans to homeowners in economically distressed areas.
  • The Financing component of the Solution Center provides more information on designing financing programs.
• Home energy assessments and upgrades. Comprehensive assessment and upgrade services help overcome several barriers—inertia, awareness, and availability of services—by reaching out to homeowners about the benefits of energy upgrades, helping them understand what measures are most cost-effective and provide the most benefits, and then helping them find contractors that can do the work.
  • For example, most programs funded through the DOE’s Better Buildings Neighborhood Program and using the Home Performance with ENERGY STAR model provided comprehensive home energy assessments and upgrades through contractor partners.

Best Practices: Program Design for Assessments

A comprehensive evaluation of over 140 energy efficiency programs across the U.S. found that programs that offered participants multiple types of home assessments (e.g., online, walk-through, or full diagnostic) were more successful than those that did not. In addition, the evaluation found that programs that installed low-cost measures during home assessments were more successful. For more information and examples of programs with these characteristics, see the Tips for Success, “Offer multiple types of assessments” and “Directly install measures during the assessment.”

Setting Energy Assessment Scope and Price 

In 2014, Resources for the Future (RFF) conducted a survey of 1,784 homeowners across 24 states who received home energy assessments to understand why more people did not take action to upgrade their homes. The survey results showed that assessments that homeowners had to pay for (versus those offered for free) were generally more comprehensive – and that more detailed, comprehensive assessments were more likely to lead to upgrades.  Assessments that homeowners paid for were more likely to include blower door tests, infrared imaging, utility bill analysis, and photos of problem areas in the energy reports.

RFF Survey Results: Extent of Follow-up on Insulation Recommendation by Whether Audit Included Particular Services 

Source:  What Homeowners Say about Home Energy Audits, Resources For the Future, 2015.

When you set program goals and objectives, you may have identified complementary goals, such as improved health and safety through better indoor air quality, greenhouse gas emissions reductions, or water efficiency improvements. Your program will also need to design services to achieve these goals or identify partners that can deliver necessary services.

Overcoming Choice Overload

When faced with too many choices, many people decide to choose none of the options, a phenomenon called ‘choice overload.’ Franklin Energy Services, a program implementation contractor, thought this phenomenon could explain why, when a customer received an energy assessment that identified many options for improvements, the customer did nothing. Franklin Energy Services and Xcel Energy teamed to test a strategy to overcome choice overload with commercial customers. In their experiment, one set of customers received the standard energy assessment report with detailed recommendations, while another set of ‘treatment’ customers received the same report, with a cover letter listing their ‘best option’ for energy upgrades. Franklin Energy Services found that the treatment customers installed more measures and saved more energy than the control group. Though this experiment was for commercial customers, Franklin Energy Services thinks that the results are applicable to residential customers as well. For more information, see the report or a Peer Exchange call summary from March 2015.

Selecting Residential Energy Efficiency Measures

In many areas, whole-house approaches covering many upgrade measures offer greater benefits and lower transaction costs than prescriptive single-measure strategies (e.g., insulation, heating/cooling system upgrade) because they allow solutions to be tailored to homes and give customers access to a broad range of options through one program. Because of their comprehensive scope, whole-house programs can also help establish longer-term relationships with customers so that they can undertake measures over time as opportunities and resources allow. A comprehensive evaluation of residential energy efficiency programs found that allowing homeowners to undertake multiple projects at once or to stage their upgrades were more successful. Prescriptive program paths may reduce the time and financial cost of entry for some participants; designing prescriptive programs to encourage participants to install multiple measures can provide similar benefits as a comprehensive whole house program; for more information see the Tip for Success, “Offer homeowners multiple types of assessments.”

Program designers may want to consult with building science experts familiar with the local housing stock and residential energy efficiency market to determine the extent to which all or some of the upgrade measures described above will be necessary to meet program goals.

Building America Solution Center

The Building America Solution Center provides access to expert information on hundreds of high-performance construction topics. This includes detailed information on common energy efficiency measures and equipment, such as air sealing and insulation, HVAC components, and windows.  It provides users with how-to guides and reference documents for each component of a house.

You will need to decide which types of upgrade measures you will promote through marketing and outreach, contractor training, program incentives, and other aspects of your program. By defining measures, you can ensure that your contractor base has the capacity to provide them, that any incentives are aligned with the measures that you select, and that your marketing and outreach strategy focuses on encouraging these upgrade measures.  Common examples include air sealing, insulation, heating and cooling system upgrades, appliance upgrades, lighting, and installation of energy efficient windows and doors.

Typical Home Improvements (Before and After)

Source: Home Performance with ENERGY STAR, U.S. Department of Energy, 2014.

Some programs may offer additional measures of value in their communities, such as solar or other renewable energy. The choice of measures will depend on the type of housing stock and fuels your customers use, as well as the cost and relative energy-saving benefits of these measures. Your selection may also be influenced by the need to satisfy cost-effectiveness tests as described in the highlight box. Also consider real or perceived customer value—that is, what your customers are interested in paying for.

Cost-Effectiveness Tests for Energy Efficiency Measures

Regulated utilities must often satisfy cost-effectiveness tests for energy efficiency programs. These tests assess whether the cost of running a particular program is justified by the energy savings that the program delivers. Because some upgrade measures are more cost-effective than others under these tests, the results may influence what measures utility program can provide.

If your program will be funded or run by a utility, you should understand:

• What benefit-cost test or tests does the program need to satisfy? If multiple tests are used, does one test have primacy or do all test results need to be considered equally?
• Is cost-effectiveness screening done for each measure, the program as a whole, all programs addressing a particular sector, or across the utility’s entire portfolio of energy efficiency programs?
• Are there particular considerations when including a measure that is not cost-effective?
• Do programs have to demonstrate cost-effectiveness in the first year or is a multi-year perspective taken to allow for higher startup costs?
• What, if any, non-energy benefits can be included as part of cost-effectiveness screening?

For more details and resources on measuring cost-effectiveness, see the Evaluation & Data Collection handbook on developing evaluation plans and the Home Performance with ENERGY STAR Sponsor Guide.

Once you have identified the products and services you will provide—as well as the upgrade measures, if applicable—you may need to revisit decisions about which partners to include in your program to make sure that you and your partners can effectively deliver program services.  For example, if you are providing energy efficiency loans, you will need to make sure that you have financial partners that are interested in providing these services to customers at terms that will encourage home energy upgrades.

Integrated models, independent energy assessment models, and energy advisor models are three common delivery models for programs that provide energy assessment and upgrade services. As you think about which model may be most appropriate for you, consider a set of evaluation criteria, such as:

• The model’s effectiveness given your local market characteristics
• The model’s characteristics that can overcome your customers’ barriers to home energy upgrades
• Net impact on program costs in light of your program budget
• Consistency with goals and objectives (e.g., short-term residential energy efficiency benefits versus long-term market transformation).

In Their Own Words: One-On-One Communication Delivers Strong Customer Satisfaction

Source: U.S. Department of Energy, 2012.

You may want to consider offering homeowners a choice of which approach they would like to use. Different models may be attractive to different homeowners.

Integrated Model

In an integrated model, one contractor conducts the energy assessment and then performs the upgrade work. Homeowners only work with one contractor, which can simplify and streamline the project. Home energy assessment to upgrade conversion rates (i.e., the percent of assessments that result in upgrades) are typically higher under this model because contractors can follow up on their assessment with a bid for work and have an opportunity to market their services directly to customers.

A potential challenge for the integrated model is real or perceived conflict of interest when the same contractor that identifies upgrade opportunities also performs the work. There is a risk that contractors will identify measures that have low energy savings potential or a higher price in order to boost their profits from the upgrade, or push homeowners toward measures in which the contractor has particular skills. If the assessment is not well documented, this model may require customers to get multiple home assessments if they want multiple bids. Depending on who pays for assessments, this adds costs for customers, contractors, or programs.

An integrated model has typically worked best in situations in where:

• Programs have high confidence in the integrity and skills of their contractors
• Contractors already have strong relationships with customers
• There aren’t many independent assessors in the community.

If an integrated approach makes sense for your program, be sure to implement a robust quality assurance system that includes:

• Quality work standards and participation requirements for contractors
• Monitoring contractor recommendations for upgrade measures to ensure that customers are getting good advice on the most cost-effective measures for their homes
• Steps to verify contractor recommendations and the results of their work
• A process for resolution if homeowners feel that contractors proposed and undertook work that was not in their best interests.

Austin Energy Uses an Integrated Model with Verification

In Austin Energy’s Energy Accelerator program, participating contractors provide homeowners with a streamlined 30-minute visual assessment, a proposal, and a cost estimate for recommended residential energy efficiency upgrades at no charge. The contractors cover the cost of the assessment but are supported by Austin Energy’s program through co-marketing and other efforts to drive demand.

Austin also has a real estate disclosure ordinance that created homeowner demand for assessments at the time of sale. Homeowners may get multiple assessments from multiple contractors to compare proposals and prices.

Homeowners select one or more contractors to provide a visual assessment and develop a proposal and cost estimate. Once the homeowner selects a home performance professional to do upgrade work based on his or her proposal and cost estimate, Austin Energy performs an in-house verification of the proposal with the home performance professional and homeowner to ensure that the proposed measures are appropriate for that particular home.

According to Austin Energy, the integrated model with the additional verification step has several advantages:

• Home performance professionals have the knowledge and experience to know what kinds of energy upgrades are appropriate for a home.
• Home performance professionals can provide accurate cost estimates for energy upgrades during the home assessment and timely and useful information for homeowners needing to make decisions.
• The verification process conducted by Austin Energy provides an opportunity to reinforce a home performance professional’s recommendations or make additional suggestions.

To find out more about how Austin Energy is working with contractors, see the case studies:

• Austin Energy Residential Power Saver Program 
• Spotlight on Austin, Texas: Let Your Contractor Be Your Guide for Big Rewards 
• Spotlight on Austin, Texas: Best Offer Ever Produces Upgrades in Record Time 

Independent Energy Assessment Model

In an independent energy assessment model, one contractor conducts the energy assessment and another conducts the upgrade. This division of responsibilities helps ensure that recommended upgrades are in the best interests of the homeowner. It can increase homeowners’ confidence that they are getting unbiased advice, and the homeowner may feel less committed to a particular contractor when they choose who will conduct the upgrade. However, because independent assessors are paid for an assessment rather than an upgrade, the assessor has less of an incentive to encourage homeowners to follow through with recommendations and undertake an upgrade.

In some cases, independent energy assessment contractors have relationships with particular upgrade contractors to whom they direct homeowners. This can help homeowners identify appropriate upgrade contractors, but it may weaken the independence of the contractor conducting assessments.

With two or more different companies involved, task coordination and workflow management can be more challenging under this model. After the assessment, homeowners might be less likely to pursue energy upgrades because they need to spend more time and effort to choose qualified contractors. (And independent assessors may not take full advantage of the assessment as a primary tool for marketing upgrades to homeowners).

Assessment costs may be higher in this model because assessment-only contractors have to cover their full assessment costs rather than covering some costs through earnings from upgrade work. This may translate into higher out-of-pocket expenses for customers or higher costs for programs if the program is subsidizing part of the assessment costs. Quality assurance costs may be higher as well because programs need to ensure the quality of contractors conducting assessments as well as those implementing upgrades.

An independent energy assessment model has typically worked best when:

• Independent assessors are available
• A program has many contractors and there is not good information about their qualifications and integrity
• The contractor base does not include many experienced whole home professionals (in which case assessors can help define appropriate scopes of work).

If an independent energy assessment model makes sense for your program, be sure to:

• Incorporate a workflow management system to ensure a smooth transition from the contractor conducting the assessment to the contractor conducting the upgrade and help reduce the likelihood of project delays or homeowners losing interest
• Offer support and guidance to homeowners to minimize the complexity of interpreting the assessment and completing the upgrade process
• Provide customer-friendly lists of qualified contractors to homeowners.

Programs Provide Information on Contractors and Energy Advisors to Customers

Some programs not only provide lists of contractors and energy advisors, but also customer feedback about them that is useful to potential customers. Examples include:

• Efficiency Maine, which has set up a page on its website where customers can find energy advisers and view feedback on their work. The results are filtered by location and can be differentiated by areas of expertise, number of projects completed, and customer satisfaction.
• Maryland’s Home Performance with ENERGY STAR program, which has a website in which homeowners can rate and review their contractors.  Reviews are published on the website as part of each contractor’s information page. Users of the website can search for contractors and sort the results based on homeowner ratings.

Energy Advisor Model

In an energy advisor model, a program-sponsored advisor provides advice and process management to customers in conjunction with either the integrated model or an independent energy assessment model described above. Energy advisors help customers understand, manage, and successfully navigate the home energy assessment and upgrade process regardless of which assessor or contractor they may work with. Multiple programs have found that energy advisors have increased homeowner satisfaction and improved assessment-to-upgrade conversions.

In Their Own Words: Energy Advisors Build Trust

Source: U.S. Department of Energy, 2012.

Energy advisor services are a strategy for addressing informational, decision-making, and transactional barriers that prevent customers from completing an upgrade.  Programs have offered a portfolio of services based on the barriers faced by their customers, including:

• Program orientation
• Scheduling the assessment and upgrade
• Contractor selection assistance
• Reviewing the assessment report and recommendations with customers in order to help them identify an appropriate scope of work for that customer
• General upgrade project management 
• Paperwork assistance
• Advising customers about available financing options and rebates.

A key challenge for this model is the cost of energy advisors and the fact that the services they provide may not be fully recovered through program revenue.  Anecdotal information, however, from programs suggests that successful energy advisor programs may reduce some other costs, such as:

• Requiring less investment in customer care services, such as a centralized customer help lines or call centers
• Spending less on marketing and customer acquisition because customers served by energy advisors are more likely to move forward with an upgrade (meaning the program doesn’t have to recruit as many)
• Allowing lower financial incentives because energy advisors help encourage upgrades directly.

An energy advisor model has worked well in situations where:

• Contractors do not have much sales experience and are not interested in obtaining it
• There are not many whole-building contractors (in which case energy advisors can provide information about whole building solutions)
• Contractors need assistance with project tracking, reporting, and coordination
• Past attempts to encourage home energy upgrades have not been successful.

Trusted Advisors Help Homeowners Overcome Barriers

In the report Energy Advisors: Improving Customer Experience and Efficiency Program Outcomes, Lawrence Berkeley National Laboratory describes the barriers that prevent homeowners from pursuing upgrades, and the energy advisor services to help address them. Programs have found that providing energy advisor services has enabled them to increase the number, depth, and breadth of energy-saving measures that homeowners install, as well as helping to streamline the process for customers. Energy advisors can create an opportunity to gain homeowners’ trust, build program credibility, and actively encourage customers to install the upgrades that were recommended during assessments. Several programs have used the energy advisor model to improve upgrade conversion rates and strengthen relationships with homeowners. The most common services that energy advisors provided were working with homeowners to review their assessment reports, and reviewing the final scope of work prior to completing the upgrade. 

In Denver, the Energy Advisor Program Helped Homeowners Go the Extra Mile in the Mile-High City

The Denver Energy Challenge launched in 2011 with a “neighborhood blitz” model focused on door-to-door outreach. In early 2012, after experiencing difficulty scheduling energy assessments and converting them to upgrades, the program revamped itself and ultimately upgraded more than 5,900 homes by enlisting energy advisors who helped customers through each step of the home upgrade process.  Eighty percent of customers enrolled in the advisor program completed at least one upgrade.

For more information about Denver’s approach, see the information from an interview with Denver Energy Challenge representatives about the program’s energy advisors.

Adapt an Existing Program Model Tested by Other Programs

It may be useful for your program to adapt an existing program model tested by other programs. For example, you can draw on the program design experience of DOE’s Better Buildings Neighborhood Program. DOE’s Home Performance with ENERGY STAR Program (HPwES) provides HPwES Sponsors with approaches for program design that synthesize various strategies into a whole house approach. The HPwES "News and Events" webpage provides updated information on program activities and accomplishments.

Small towns may want to draw on lessons from the Small Town Energy Program in University Park (STEP-UP), which produced information on program designs specifically for small towns. RePower Bainbridge has also developed a guide that serves as a “how to” reference for small or isolated communities based on its program experience.

Decisions about the products and services you offer and your service delivery model will greatly influence the development of your implementation plan and your detailed approach for interacting with customers and contractors.
 

In addition to providing a set of products and services to customers, programs often conduct communication and coordination activities that help build program awareness, support partners, and coordinate the many activities associated with delivering products and services to customers. Programs may fulfill these activities themselves, contract with other organizations to complete them, or look to partners to fulfill them.

The list below is not exhaustive, but it identifies many of the most common communication and coordination activities that you may need to build into your program design.

Program Delivery and Evaluation:

• Tracking and coordinating upgrade projects, which helps streamline the interactions between customers, contractors, lenders, and your program. Effective tracking and coordination also allow your program to monitor what it is accomplishing, how well products and services are being delivered to customers and where you have opportunities for improvement. For more information about designing project tracking systems, see the discussion of program resources in the Program Design & Customer Experience Develop Resources handbook.
• Customer call centers or other technical assistance, which ensure that your program is responsive to customers’ needs, answers their questions, and keeps them from losing interest in completing their own home energy upgrades. For more information about designing call centers and other forms of customer assistance, see the discussion in the Program Design & Customer Experience Develop Resources handbook.
• Evaluation, which ensures that you are tracking and communicating what your program is accomplishing and engaged in ongoing learning about how to adapt and improve. For more on the design and implementation of program evaluations, see the Evaluation and Data Collection component of the Solution Center.

Marketing Incentives, and Financing:

• Marketing and branding, which communicates the value of residential energy efficiency, educates customers, and lays the groundwork for energy upgrades. These activities support the long-term development of a sustainable market for residential energy efficiency for your program and your partners. For more information on the design of marketing and branding efforts, see the Marketing & Outreach component of the Solution Center and, specifically, the Make Design Decisions handbook.
• Managing financial incentives for customers, which ensures that customers know about and receive all of the incentives for which they are eligible in a timely manner and that contractors are knowledgeable about and telling customers about applicable financial incentives. This may include providing program-related incentives and/or coordinating with other organizations (e.g., utilities) that provide complementary incentives. For more information on the design of incentive systems, see the Marketing & Outreach component of the Solution Center and, specifically, the Make Design Decisions handbook.
• Monitoring the status of financing with lenders, which tracks customers’ applications for financing and their receipt of loans.  This information can help contractors know when work can begin and can help programs communicate status information to customers.  For more information on tools for tracking customer status, see the Program Design & Customer Experience Develop Resources handbook.

Contractor Engagement and Workforce Development:

• Recruiting contractors, which helps ensure a sufficient pool of contractors that have the knowledge and skills to meet the demand that your program is creating. For more information about recruiting strategies, see the Contractor Engagement & Workforce Development component of the Solution Center and, specifically, the Identify Partners handbook.
• Ensure a qualified workforce, which supports training and employment assistance for home performance professionals. For information on creating a workforce development plan, see the Contractor Engagement & Workforce Development component of the Solution Center and, specifically, the Develop Implementation Plans handbook.
• Contractor coordination, which links customers interested in energy assessments and upgrades with contractors that can do the work. This helps create business opportunities for contractors—especially if accompanied by contractor sales training—and effective coordination keeps customers and contractors satisfied with the program. According to a comprehensive evaluation of over 140 programs across the country, successful programs provided lists of pre-approved contractors and gave homeowners the option of contracting directly with them. For more information on the design of approaches for coordinating with contractors, see the Contractor Engagement & Workforce Development component of the Solution Center and, specifically the Make Design Decisions handbook.
• Quality assurance and quality control, which ensures that upgrade work proposed and conducted for homeowners meets program quality standards and achieves desired results. For more on creating a quality assurance and quality control process, see the Contractor Engagement and Workforce Development component of the Solution Center and, specifically, the Develop Implementation Plans handbook.

At this point in program design, you should be able to map out what services your program and partners will provide and what communication and coordination activities your program and partners will undertake. Your implementation plan will go into greater detail on products, services, and activities to ensure that you have identified critical coordination points with customers, contractors, lenders, and other partners.

Good program design can be complex. Seek input from experts in the various components of your program. You can also seek input from partners and stakeholders such as local utilities, state or local energy offices, regional energy efficiency organizations, housing organizations, and groups representing specific target populations. These conversations can also help build stakeholder buy-in for your program design and help identify potential program champions. This will help develop the community’s trust in the product and enhance your marketing efforts from the beginning.

Take the opportunity to get customer input into your program. Acquiring feedback directly through focus groups is one way to get customer perspectives.  Program partners that work closely with your community may also have good information about customer insights.  Customer input can help you select measures to provide, design service delivery methods, and craft incentive programs that spur program participation.

Use the Better Buildings Residential Network to Get Ideas and Feedback on your Program Design

The Better Buildings Residential Network connects residential energy efficiency programs and partners to share best practices to dramatically increase the number of American homes that are energy efficient. Membership is open to organizations committed to accelerating the pace of existing residential upgrades. Members commit to provide DOE with an annual update of the organization’s residential energy upgrades and information about benefits associated with those upgrades. Benefits of membership include:

• Invitations to monthly topical calls on key program design and implementation topics
• Tools, templates, resources, and proven solutions shared by members
• Newsletter and other available updates on residential energy efficiency trends
• Opportunities to be featured in media, case studies, and lessons learned materials
• Optional program benchmarking.