Motivating Homeowners to Invest in Energy Efficiency Improvements Analyzed by Berkeley Lab Researchers in New Report

Photo of the Driving Demand cover
October 2010

Hundreds of millions of dollars in public money are flowing into programs to support improvements in home energy efficiency. Ensuring that these funds have their maximum impact by motivating homeowners to seek out home energy improvements is the subject of a new report from researchers at the Lawrence Berkeley National Laboratory (Berkeley Lab).

"Convincing millions of Americans to divert their time and resources into upgrading their homes to eliminate energy waste, avoid high utility bills, and help stimulate the economy is one of the great challenges facing energy efficiency programs around the country," says Merrian Fuller of the Electricity Markets and Policy Group.

"Usually, when policymakers address the issue of energy efficiency benefits, they examine the technical and economic potential of energy efficiency to reduce greenhouse gas emissions, but neglect the issue of how to motivate consumers to take advantage of home energy upgrade programs. This is often a missing element in policy discussions and a primary impetus for us in writing this report," she continues.

The new report is aimed primarily at policy makers and energy efficiency program designers, especially those new to the field. More than 2,000 towns, cities, states, and regions are recipients of American Reinvestment and Recovery Act funds aimed at building the green economy and are currently working to develop their clean energy programs. This report provides insights into the best ways to provide incentives for comprehensive home energy improvements, energy efficiency-focused upgrades to residential buildings such as air sealing, insulation, window replacement or enhancement, duct sealing, furnace or heat pump replacement, water heater replacement, air conditioner replacement, solar thermal water heating and high-efficiency lighting.

Successful Marketing and Outreach for Home Energy Efficiency Programs

The study draws numerous conclusions about the successful marketing and outreach of home energy improvement programs, as well program design and implementation, drawing lessons from 14 successful home energy efficiency programs around the country.

It's important to find an appealing draw such as health, comfort, energy security, competition, or community engagement," says Charles Goldman, a co- author, "It's not enough to provide information about energy efficiency—programs must sell something that people already want."

The report also recommends studying the target population—"A blanket marketing campaign to reach 'everyone' will likely be ineffective and expensive," according to the report. "Find and target early adopters, then tailor messages specifically to this audience. Demographics can help segment the market and select optimal strategies, but you can also segment the market by personal values, interest in hot issues such as health concerns, or likelihood of getting savings."

An interesting message of the report is that "language is powerful." It notes that words like "retrofit" and "audit" often have negative connotations to most consumers. The authors recommend experimenting with language that people have more experience with, and using vivid examples to help personalize general information into how homeowners themselves can reduce their energy bills and increase their comfort. The report itself uses the terms "home energy improvements" or "upgrades" instead of "retrofits," and "energy assessment" instead of audit, while noting that "no one has found the silver bullet for the best language to use in the home performance improvement industry."

Program Design Successes

The report also examines program design practices that have proven successful in the field. The authors conclude that, "Success will require multifaceted approaches that acknowledge a deeper understanding of what motivates homeowners and contractors. Effective programs will tend to be tailored to the location, thoughtfully researched and piloted, personalized to the target audience, and more labor-intensive than simple incentive programs."

The study emphasizes that "contractors are the key point of sale for home energy improvements. They already understand the traditional renovation and home improvement market...It is imperative to design a program that contractors want to sell—and convince them that the opportunity is worth the time and money to get the appropriate training and equipment."

Learning from Successful Programs

The authors examined 14 residential energy efficiency programs, conducted an extensive literature review, interviewed industry experts, and surveyed residential contractors to draw lessons from first generation programs, highlight emerging best practices, and suggest methods and approaches to use in designing, implementing, and evaluating these programs.

The programs they examined include the Bonneville Power Administration's Weatherization Program in the Pacific Northwest, the City of Houston's Residential Energy Efficiency Program, and other programs from such areas as Minneapolis, Kansas, Boston, New York, Pennsylvania, Vermont, and Washington D.C.

This research was funded by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, Weatherization and Intergovernmental Program.

The report, "Driving Demand for Home Energy Improvements: Motivating residential customers to invest in comprehensive upgrades that eliminate energy waste, avoid high utility bills, and spur the economy," was written by: Merrian Fuller, Cathy Kunkel, Mark Zimring, Ian Hoffman, Katie Lindgren Soroye, and Charles Goldman. Soroye currently works for Pacific Gas & Electric.

Download the Driving Demand report.

Environmental Energy Technologies Division of Berkeley Lab.