CBS Newsletter
Spring 1996
pg. 5

Residential Assessment of Market Potential (RAMP)

Life-cycle cost savings per household for a condensing gas furnace compared to a standard gas furnace. Assumes 18-year lifetime, 7% discount rate, and $800 incremental purchase price.

Energy-efficient products can provide environmental benefits, but their true potential can only be realized when these products have achieved widespread market acceptance. The Residential Assessment of Market Potential (RAMP) project's purpose is to help the Environmental Protection Agency (EPA) design programs that meet the residential-sector greenhouse-gas stabilization goals of the Climate Change Action Plan. The results of RAMP research facilitate the design of voluntary, "market-pull" programs that reduce pollution by accelerating the penetration of new or under used, energy-efficient technologies for most residential end-uses.

The RAMP team is assessing the market potential of many energy-efficient products such as ground-source heat pumps, condensing gas furnaces, and a variety of home appliances. The policy makers who implement energy efficiency use this information to design programs that target the most attractive market segments. The EPA can use RAMP research to promote efficiency through program mechanisms such as product labeling, home builder initiatives, Home Energy Rating Systems and Energy-Efficient Mortgages, partnerships with realtors and financiers, and utility-sponsored incentive programs.

To assess the market for energy-efficient products, we first focus on how residential products are purchased and used, the existing market infrastructure for efficient products, and the barriers to increased market penetration of these products. We use existing survey data or conduct informal interviews to gather data pertaining to the functioning of markets. We then apply a detailed model, based on geographic information system (GIS) analysis, to identify market segments in which efficient technologies are technically feasible, cost-effective, and acceptable to consumers. The advantage of the GIS is that it can incorporate data (such as climate data, utility rates, building thermal characteristics, and equipment saturations) at several levels of regional detail and produce results in map format that are easy to understand and act upon. Our market assessment model uses individual household data from the Residential Energy Consumption Survey and the American Housing Survey as well as summary data from the 1990 census.

The key feature of RAMP analysis is that research results are disaggregated as much as possible to distinguish the market potential among regions, house types, demographic groups, and other market segments. Within each market segment, we estimate the potential for efficient technologies to save energy and prevent pollution assuming either a business-as-usual scenario or the implementation of various programs to promote energy-efficient products.

This type of analysis helps answer such important questions as:

An example of how we have applied the market assessment model is our assistance to program managers designing a pilot program to promote the sale of efficient heating and cooling equipment. We used the GIS model to determine the most cost-effective regions for several energy-efficient heating and cooling products. The figure illustrates the national analysis results of the life-cycle cost savings for a condensing gas furnace compared to a standard gas furnace.

We further narrowed the potential areas for launching the program by identifying metropolitan areas with sufficient energy-efficiency market infrastructure and other favorable factors (such as utility program activity) and screening for neighborhoods with favorable demographic and housing characteristics. The results of this screening process were used to establish a direct mail campaign and to help local HVAC contractors target their marketing efforts.

—The RAMP Team

RAMP Team members:
R. Brown, J. Koomey, C. Atkinson, S. Bretz, J. Roberson, C. Webber, M. Moezzi, J. Kollar, and M. Pinckard.
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Rich Brown
Energy Analysis Program
(510) 486- 5896; (510) 486-4247 fax

This research is sponsored by the Environmental Protection Agency.


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