How many ears must one man have, before he can hear people cry? Repeating efficiency program mistakes over and over.

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Danger aheadI’m watching two home energy efficiency programs repeat some of the same mistakes programs make over and and over and over. Yes, I do understand the program drivers, and what’s behind the design and implementation elements. At the same time, though, I understand that many of the choices greatly undermine the stated goals, especially when they DE-motivate contractors and homeowners alike. The late night slide show (below) from a few years ago could have applied 15 years ago–and, alas, it still touches on program pitfalls today.

Thus, I’m collecting again some points that I’d hope program managers and implementers and policy makers would keep in mind as you design, implement, evaluate (or participate in) any residential efficiency programs.

  • Include contractors in the conversation early! Without contractors, efficiency through home improvements doesn’t work.
  • Make any program incentives stable, predictable, and trending down rather than up. Avoid the incentive roller coaster. This is true wether you’re talking old school rebates or pay-for-performance.
  • The closer any incentives are to the energy-savings result you want, the less you need clunky and expensive rules to try to herd the market in the right direction. Incentivize what you want to see, not what you don’t want.
  • Strive for consistent standards. The more you can standardize your standards(!), both within your own program (over time and across staff) and with other programs nationally, the easier it will be for the market to scale and deliver the results you hope for.
  • Try to eliminate unnecessary hurdles and barriers. “Program friction“, extra paperwork, hassle, and adminstrivia, cost time and money, make it more difficult for contractors succeed, and ultimately stand in the way of energy-saving work actually getting done.
  • Recognize that cash flow can make or break your participating contractors. Incentives are nice. But the incentive float can kill a contracting business. Delays in payment of weeks or months can lead to bankruptcy and certainly don’t encourage participation.
  • Understand that while your primary goal may be energy savings, for many consumers energy savings are only a secondary motivator.  To sell more and deeper efficiency measures, you must leverage what people really want and allow contractors to do the same. (This doesn’t mean you have to incentivize non-energy savings benefits. You can–and should–incentivize only what you want to see. But stay out of the way of contractors selling comfort, indoor air-quality, fixing ice-damming issues or stinky crawlspaes, or whatever homeowners are willing to pay for. Selling these things allows us to deliver deeper energy savings.
  • Use the right cost-effectiveness test. OK, this is typically determined by regulators like utility commissions rather than program implementors. But bad cost-effectiveness tests undermine efficiency programs, and lead to program designs that won’t save as much energy, especially as the low-hanging fruit of light and appliance upgrades disappears.
  • Provide workforce training support if you have the resources, but understand that supporting contractor marketing and sales and reducing program friction actually create the work. Most contractors will agree that technical training is nice. But training doesn’t create jobs.
  • Share program results. The best way to improve programs is to share widely and freely both what has worked and what has not worked. 
  • Chase away the bad contractors. If you want to the market to insist on quality, you have to support the contractors who deliver it and not support the contractors who don’t. Do all of the above, and then enforce the rules.
  • Will taking these steps guarantee success? No. But it will pave the way for success a lot more surely than surely than repeating things we already know don’t work well and don’t lead to the energy-savings results you’re after.

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    About the Author:

    Mike Rogers is the President of OmStout Consulting. A nationally recognized expert in residential energy-efficiency, he works with contractors and programs to scale sustainable market approaches to improving homes. More on Google+


    1. Megan Edmunds  November 8, 2015


    2. Allison A Bailes III  November 7, 2015

      Hear, hear, Mike!


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