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Implementation Contractor Perspective - PowerPoint Presentation

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					    Beyond Home Energy Audits
               with
Home Performance with ENERGY STAR®

     AESP 18th National Energy Services Conference


                     Presented by:
                       Mark Dyen
               Conservation Services Group
                         1/28/08
What Is Conservation Services Group?
Implementation contractor for Home Performance
with ENERGY STAR for:
   • NYSERDA
   • The Long Island Power Authority
   • The Honeywell Team in New Jersey
   • Energy Trust of Oregon
   • City of Anaheim, California
   • NGRID and NSTAR in Massachusetts
          Market Transformation
                   or--
There is a market for refrigerators and a
market for light bulbs, so the market
transformation aims to push people who want
to buy a light bulb or a refrigerator to buy a
more efficient model. There is a natural
market for refrigerators and lighting, and the
public policy thrust is to get people to buy
more efficient models.
             Market Creation
There is no “natural” market for a comprehensive
energy efficiency upgrade of a home. The idea for
the service itself is the result of public policy
analysis. We are dealing with market creation as
much as market transformation.
 Strategy for Market Transformation and
             Market Creation
• Create a network of trained and qualified Home
  Performance Contractors
• Facilitate these Contractors selling and closing
  large scale comprehensive jobs
• Market the brand name for these contractors to
  distinguish them from the un-certified
  competition
Home Performance Brings Three
Different Players with Different Goals

• Sponsors (utilities, public agencies) want verifiable
  improvements in energy efficiency – increasingly
  want significant, system-wide energy use reductions
• Contractors want profitable higher dollar sales,
  improved public perception of the firm, access to
  new markets
• Customers have a whole variety of goals
Customers Have a Variety of Motives
• Some want to cut high fuel bills
• Some want to replace an old furnace or air
  conditioner
• Some want improved comfort
• Some want a healthier home
• Some want to save energy for environmental
  reasons
How a Sponsored Program Can Help a
Contractor
– Public awareness of the Home Performance services
  and approach
– A call to action to potential customers to use Home
  Performance services
– Access to training
– Access to certification
– Access to measurement equipment
– Legitimacy through Program participation agreement
  and/or BPI accreditation
What A Contractor Has to Provide
- Skilled staff to be trained
- Administrative staff for data entry
- Internal quality assurance system
- A staff retention plan (certified staff can shop
  around)
- Building science equipment (blower doors, duct
  blasters, combustion safety analyzers, infrared
  cameras)
What a Contractor Has to Provide
Continued

            SALES!
Sponsored Programs Encourage Sales

→ Contractors actually make the sales
            Insights Gained

• Understand the differences between what
  motivates the Program and what
  motivates the contractor or the customer
• It takes the right kind of contractor
• Know the customers
Program Motivators:
Program wants to:
  • Save energy
  • Reduce consumer costs
  • Cut pollution
  • Meet regulatory demands
  • Reduce arrearages
Contractor Motivators:
Contractors want to:
• Do the right thing in quality and energy
  improvements
• Make serious money out of participating in the
  Program
• Differentiate their firm from the cut rate competition
• Use Program incentives to offset the risk of
  participation and increase profits
• Avoid being left out
Customer Motivators:
Customer may or may not be interested in those
things – may be driven by:
  •   Concerns about safety
  •   Wanting improved comfort
  •   Curiosity and interest in new technologies
  •   Prestige
  •   Concern about future prices or reliability
  •   Simple need to replace heating system
The customer may or may not care about
cost effectiveness

 More often than not, the customer sees the
 money saved by energy efficiency as a way of
 helping to pay for the home improvements,
 not as the reason for the home improvements
You must be the right kind of contractor

• Already active and successful in home
  improvement market - Home Performance is a
  good place to learn building science, but a
  tough way to learn the contracting business
Right kind of contractor (cont.)
• Insulation company with a residential retrofit
  emphasis
• General Remodeler
• HVAC company which already promotes high
  efficiency equipment
• Solar Installer ??
Right kind of contractor (cont.)
• Ambitious firm aiming to grow
• Already has administrative capability – small
  office with staff to handle administrative
  reporting requirements
• The boss likes promoting high quality/energy
  efficiency/green services – the boss has to be
  100% on board
Who are the Customers?
1) People who need to replace a furnace or air
   conditioner, or who want to solve a problem like a
   cold/hot room, moisture problem, ice damming
2) Homeowners who want to improve home comfort
3) Homeowners who want to improve home health/safety
4) Homeowners who feel that energy costs are out of
   control
5) “Green – Up” Customers
Who are the Customers?
So far, the customer base has been made up of
people who want to:
   • Replace a heating or cooling system,
   • Correct a specific problem like a cold room,
     moisture problem or ice damming
   • Improve home comfort
Who are the Customers?
• Some contractors look for customers who
  have specific health problems – mold, excess
  moisture, poor indoor air quality
Who are the Customers?
• With growing public concern about climate
  change, carbon emissions and related issues --
  There is already a growing customer interest in
  “Green” new homes that is unprecedented.
The Dynamics of Program Development
The Program has to build contractor capacity and
consumer demand in parallel.
  • If the contractor capacity is built but there is
    no demand, the contractors will take the
    training and leave the Program.
  • If customer demand comes before there is
    qualified capacity, customers will find some
    contractor who will give them poor service –
    and not inform the Program.
The Dynamics of Program Development
Program sponsors are most worried about unmet
demand.
-- But there has to be some market tension
   (customers seeking contractors) or the
   contractors won’t make the leap to Home
   Performance.
Whether it’s Apple marketing the iPhone, or a
sponsor marketing comprehensive home energy
makeovers – a bit of unmet demand is a good
thing.
The Dynamics of Program Development
1) Build Contractor Network
   a. Training, certification, equipment, financing,
      incentives for contractor reporting
   b. Quality assurance system

2) Public Launch
   a. Marketing (paid and as big as you can afford) on
      public education
   b. Call to action – push customers to act now
The Dynamics of Program Development
Program Launch strains the network:
   • waiting lists develop;
   • prices go up;
   • contractors start to be selective about
     customers they serve.
-- And new contractors are attracted to the
   Program.
The Dynamics of Program Development
Champions Emerge
• Contractors who are ambitious, volume-oriented
  and committed from the top person down.
• The Champions take over sales immediately,
  and work their way into taking over marketing.
• The Champions’ marketing efforts drive the
  market, attract competition and reduce Program
  costs.
                                                                                                   WORLDWIDE
                                                   NYSERDA HPwES Production                        VINCENTS
                                                                                                   VCHARLES
                 450                                                                               VASTOLA
                                                                                                   TRICITY
                                                                                                   TOWN
                 400                                                                               TITUS
                                                                                                   SUPERIOR
                                                                                                   SUMMER
                 350
                                                                                                   STEVES
                                                                                                   SEASTEAD
                 300                                                                               ROTT
                                                                                                   REIMER
Completed Jobs




                                                                                                   PSC
                 250                                                                               POLSINELLO
                                                                                                   PIPESOLUTION
                                                                                                   PES
                 200
                                                                                                   PATDUNDON
                                                                                                   NOCO
                 150                                                                               NHS
                                                                                                   MCALLISTER
                                                                                                   MAINCARE
                 100                                                                               LOWE
                                                                                                   KEIFFER
                                                                                                   HUGHESCO
                 50
                                                                                                   HPP
                                                                                                   HOLBROOK
                  0                                                                                GARYGOODMAN
                       Qtr1   Qtr2          Qtr3    Qtr4     Qtr1     Qtr2           Qtr3   Qtr4   ESCHARDEIN
                                                                                                   ESAVERSPLUS
                                     2001                                     2002
                                                                                                   ESAVERSINC
                                                                                                   ENTHERM
                                                                                                   ENTECH
NY Home Performance Contractor
              Ads

         - Examples -
Reduce Energy Costs
Protect the Environment
Focus on Home Comfort, Health &
            Safety
Offer Comprehensive Measures
The Dynamics of Program Development
       When Champions take over…

The Program role changes:
• Marketing is aimed at emphasizing the brand
    “Make sure you have a genuine Home
            Performance Contractor”
• QA and QC become even more critical
The Dynamics of Program Development
        After Champions emerge…
The Program role changes:
  • Contractor recruitment and technician
    training become a means of feeding the
    network, and preventing monopoly from
    developing.
The Dynamics of Program Development
   Once the Champions have emerged,
 and the market is partly self-sustaining…

  • The Program can launch special marketing
    efforts or incentives to boost production.
  • The Program can introduce new
    technologies.
The Dynamics of Program Development
        But - you can’t skip steps.
 • Infrastructure development
 • Public Launch – media/ direct sales through
   audit Program / public relations
 • Incentives for training, loans for customers
 • QA
 • Long term commitment
For additional information:

          Mark Dyen
          Senior Vice President
          (508) 836-9500 x13215
          mark.dyen@csgrp.com
          www.csgrp.com

				
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