If you’re a regular reader of my blog, you’ve heard my party
line about the problems with successfully marketing energy efficiency:
- You’re dealing with a consumer market that doesn’t think they need what you’re selling.
- The industry keeps selling “energy efficiency,” and nobody wants to buy energy efficiency. They want to solve a problem, and generally improve the comfort, health and safety of their homes…which allows them to feel relieved/smart/in control/like rock stars.
- The end result is that we spent $7 billion on utility energy efficiency programs in this country last year and two-thirds of the population is blissfully unaware that those programs exist.
So, clearly, we have big issues with making the marketing of energy efficiency programs, products, and retrofits much more cost-effective. But a bigger question has been raised lately about the cost-effectiveness of energy efficiency programs altogether. A new study from the Energy Policy Institute at the University of Chicago calls into question whether or not low-income weatherization programs actually deliver the projected savings they promise. Here’s an excerpt from the overview:
Participating low-income households were provided with about $5,000 worth of weatherization upgrades (e.g. furnace replacement, attic and wall insulation, and weather stripping) per home at zero out-of-pocket costs. While the researchers found that the upgrades did reduce the households’ energy consumption by about 10% to 20% each month, that only translated into $2,400 in savings over the lifetime of the upgrades – half of what was originally spent to make the upgrades, and less than half of projected energy savings.
Many organizations highly invested in energy efficiency have responded to this study’s assertions, and the best response, I believe, comes from ACEEE. Their response reminds us that some of the bigger benefits of energy efficiency have nothing to do with utility bill savings. Which gets us back to the point I made at the beginning: what people really want to buy is not energy efficiency itself and not even just energy savings. We must understand the emotional value delivered by energy efficiency and market THAT.
For a real-world perspective on this, I reached out to Nate Adams, one of the country’s premier home performance thought leaders and implementers. Nate is in the field every day working with homeowners to not only convince them to pull the trigger on energy efficiency upgrades, but then doing the work and tracking the data points related to results. Here’s what he says about his clients:
Fixing problems other than utility costs are the drivers of almost all of our projects. In the rare cases where projects are cost-effective, the client first reached out to solve a problem like ice dams or uneven comfort, not energy bills. Fixing these problems has real value to both weatherization and Home Performance clients, but they aren’t part of a simplistic cost effectiveness test.
The cost effectiveness of weatherization programs is a stickier subject than for private programs, since government money is being used, but keeping ‘non-energy benefits’ (NEBs) in mind is critical. By all means, put a value (and track the savings) on energy use reductions, but putting a value on health and community benefits is critical as well.
On the private side of things, programs need not pay for entire upgrades. Homeowners determine the value of solving problems they want solved. Energy efficiency is merely an after effect of these upgrades, if they are well designed and implemented.
Focusing entirely on cost effectiveness from energy savings alone is not a tenable path. Consumers care more about cost than cost effectiveness: Can I afford it and will it solve my problems?
I couldn’t agree more. Let’s realize that the way we’ve been marketing energy efficiency doesn’t work, and start marketing the benefits people actually care about.