Over on LinkedIn last week, I shared a GTM article arising from a Rocky Mountain Institute summit, “Experts Discuss the Biggest Barriers Holding Back Building Electrification“.
I suggested this was a good starting point, but that it didn’t go far enough. The article says:
“The group highlighted the need to convince plumbers, HVAC technicians, and building contractors it’s in their long-term financial interest to install air-source heat pumps, heat pump water heaters, induction cooktops, and other electric equipment.”
“We need to create awareness, so they can realize this could be a huge business opportunity, if they take the time to install the equipment properly.”
Yes! Let’s be clear, though. We need more than awareness. Or hints at “could be”. Most contractors want to see proof from their peers in terms of dollars and cents with a sustainable, profitable business approach. On the residential side in particular, most contractors will need help w/ fundamental business skills needed to succeed with a value-added offering. And we need to look for opportunities beyond quality installation of boxes and appliances to do it right. Top-shelf equipment, even installed well, in a leaky, poorly insulated house with moisture issues, ventilation issues, and a host of other issues is not a sufficient answer.
Scott then asked a great question: “How do we do it?”
There is no magic bullet, but rather many elements working in conjunction that can help change the game. Here are some of those we need to pull this off, and make it happen quickly enough to start making a real impact fast enough. It’s a long list, and it’s incomplete! It’s unlikely that any organization or individual can effectively tackle every this on this list. Fortunately, no one has to. We can all tackle pieces where we’re best positioned to make a difference. At the same time, it helps to understand the elements outside of your bailiwick, so you can complement others’ work, and help them complement yours. We’ll get further, faster, if we’re rowing together.
- Highlight successes much more prominently than we’ve done. By successes, I mean both those on the electrification side, and those on the business financial success side, contracting businesses making fair profits for installing these solutions. (I argue the former is easier than the latter.) And just saying it’s an opportunity isn’t enough. Most contractors face huge risks for little to no profit, and have a rational fear take a risk on something that isn’t yet well-proven–proven to the point where their peers are buying boats or making college tuition payments, or just robustly growing their businesses.
- Facilitate training for these contractors on both the technical and the business side. Historically, we’ve trained 100,000s of technicians with many of the needed technical skills for diagnosing problems and installing solutions. That is necessary. It is also insufficient. Technicians work in contracting companies—and if the companies don’t make money doing work the right way, they won’t do it that way for long—they’ll either go back to the previous status quo, or go out of business, as many home performance contractors (from the small shops to Solar City’s retrofit division) and other trade contractors have and do.
- Worth calling out separately, included in that training would be customer service and sales training to help contractors better be able to build value, to offer value-based solutions (as opposed to trying to be the “low-bid guy”) and to deliver on that value—which often has little to do with either energy or more narrowly with fuel choice. The value-based solutions are often bigger and deeper savings projects, but a contractor needs to know how to get there. This doesn’t apply just to electrification, but also to a huge array of performance-based projects which deliver a variety of benefits and also frequently happen to reduce energy use. For example, heat pumps often start making more sense when the total heating load, and the peak load, on a home are reduced. And we get there by better air-sealing, better insulation, etc., which at the same time can make a home more comfortable, quieter, less dusty, more durable, etc…all things which customer are often willing to pay for!
- Awareness needs to be raised not just on the delivery side to push the technologies—although that often can work much more frequently than most contractors do it currently—but also on the consumer side to create pull, even for the contractors we can’t reach via the mechanisms above. A huge number of contractors fall back on the adage “if they ask for it, we can provide it”. Very short-sighted on their parts, and a strong indication that they don’t understand consultative sales, BUT if consumers ask for it, they’re deliver it, and thus getting more they-asked-for-it traction would be a good thing. Energy programs, NGOs, consumer protection organizations are some of those who can help reinforce the right messages–and we made to help educate them.
- Align efficiency programs’ goals with this electrification goals. Duh. Most efficiency programs have historically limited so-called fuel switching and thus for many making switching to electric equipment and appliances less attractive as precisely the moment when it makes the most sense. Sure, a customer can swap out that 2-year old furnace for a heat pump—and so do—but most won’t and it’s terribly economically inefficient. Those dollars would like have been better applied on deeper efficiency measures, additional swap outs, etc. An example of this is SMUD’s Home Performance Program in which gas-to-electric conversion is a baked-in pillar of the program.
- Speaking of efficiency/renewable programs, they can often do a much better job aligning with market forces, reducing program friction that stymies uptake and creating programs that logically scare contractors away. I’m a huge proponent of good programs (and policies). Done well, they can greatly accelerate innovation and adoption in the market. Done poorly, though, they can get in the way. So, as I’ve ranted before, let’s do programs right! There is a long list of things we could do better on this front.
- Not so much a pure electrification mechanism, but stricter codes and better code enforcement would have. The helps drive out low-cost-but-poor-quality work, and sometimes dangerous(!) work, support those contractors doing the right thing. That orphan water heater that no longer drafts properly? Rather than lining the chimney at additional expense, how about looking at that HPWH instead?
- Builders & remodelers & GCs subbing work out, insist on the right work, done the right way. Corollary: PAY FOR the right work done the right way. (This usually isn’t the low-bid.) Like the good code enforcement, this is more indirect, but it does move us in the right direction.
- Big picture policy mechanism. Institute a carbon-tax. Make it revenue neutral if you’re in the starve-the-beast camp. But make consuming fossil fuels cover the cost of burning those fossil fuels. This puts the costs where they should be and significantly changes the economics of eliminating those fossil fuels for many end uses.
There are certainly more high-level mechanisms that can help. And each of these could be broken down into a myriad of smaller bite-sized chunks. What would you add? What will you focus on?