Market Barriers to EE Programs

by Penni McLean-Conner, NSTAR

Program managers strive to understand why consumers donÃ-€â„-t adopt energy efficiency measures so they can break down those barriers. Energy efficiency market barriers are categorized as awareness, availability, accessibility and affordability.

Successful program managers understand market barriers for particular programs and know their target audiences. This combination enables program managers to develop successful energy efficiency programs with cost-effective customer outreach.

Awareness

The awareness barrier occurs when customers lack information on available options. For the residential market, awareness may be addressed using mass market communication channels while the commercial and industrial markets are addressed with a more personal touch.

To reach the residential market, energy efficiency program managers often leverage traditional tools such as bill inserts, bill messages and the Web to raise customer awareness. Program managers sometimes augment traditional tools with paid advertising via direct mail, radio, billboards and, in some cases, even television. Social media tools such as Facebook, Twitter and YouTube are becoming increasingly popular with program managers to raise awareness and engage consumers.

For commercial and industrial (C&I) accounts, personal outreach is key. Utility account representatives, program managers and direct sales staff raise awareness with the C&I marketplace. These folks often have built strong relationships with large C&I customers and understand their customersÃ-€â„- businesses and needs. Supplementing personal outreach with program collateral and targeted advertising in trade magazines or business journals amplifies the message to the C&I markets. Outreach via training or trade ally events to builders, developers, equipment contractors and others are effective marketing tools to reach all market segments. Trade allies encourage consumers to consider the energy-savings aspects of their purchases. They also help consumers understand that the additional upfront costs associated with more efficient equipment are mitigated by reduced operational costs in the future.

Availability

The availability barrier refers to when manufacturers do not produce significant quantities of or effectively market their energy-efficient products. Product availability is based on several factors, including market size, market demand, production capacity at the manufacturing level and wholesale or retail inventory levels. Program managers at all levels of the product delivery chain use incentives to increase availability for residential and C&I markets. They may offer manufacturers incentives to encourage new product development or target retailers and trade allies to promote adequate supplies and prominent shelf space of energy efficiency products.

Accessibility

Accessibility refers to customersÃ-€â„- ability to obtain more efficient products. It involves distribution retailersÃ-€â„- stocking and displaying sufficient quantities of products in visible areas so consumers can find them. For residential and C&I markets, addressing accessibility issues involves working with distributors and retailers to stock the products. Working with retailers to promote the products on their sales floors is one of the best ways to address accessibility in the mass market. One way program managers impact accessibility is by creating an upstream buy-down model at the manufacturer level. Manufacturers compete for program administrator dollars through negotiated, cooperative promotions and, in turn, provide discounted products on a mass scale to distributors and retailers. The savings are then passed on to consumers at the retail level.

Affordability

Affordability refers to the higher cost associated with energy efficiency solutions vs. other nonenergy-efficient alternatives. This is because the more efficient products, being less developed, have higher first costs and smaller market shares. For residential and C&I markets, rebates or incentives are the most effective and popular tools used by program managers.

Financing is becoming increasingly popular in addressing affordability barriers. Financing might be offered directly on utility bills or through third parties. It gives consumers a tool to address the co-pay associated with energy efficiency projects.

Understanding the market barriersÃ-€”awareness, accessibility, availability and affordabilityÃ-€”is an important element in effective energy efficiency programs. Successful program managers combine their understanding of their target markets and the barriers facing those markets to create popular, cost-effective energy efficiency programs.

Understanding market barriers and knowing their target audiences enables program managers to develop successful energy efficiency programs.

Author

Penni McLean-Conner is the vice president of customer care at NSTAR, the largest investorowned electric and gas utility in Massachusetts. McLean-Conner, a registered professional engineer, serves on several industry boards of directors, including the Massachusetts Technology Collaborative and CS Week. Her latest book, “Energy Efficiency: Principles and Practices,”  is available at http://pennwellbooks.com.

 

More Electric Light & Power Articles
Previous articleSmart Grid of the Future– De-risking the Path From Today’s Grid to Tomorrow’s Smart Grid
Next articleTaking Relationships off Hold

No posts to display