Program Design Best Practices for Utilities and Local Governments
What’s the point of a home energy audit program? To conduct home energy audits, right?
We’d argue that it’s something different. The point of an energy audit program is to drive energy retrofits that create large and lasting energy savings for the homeowner and the utility.
If you agree with us – that an energy audit is a means to an end, rather than an end itself – then you’d want to design an audit program that’s most likely to generate retrofit activity. So what are the best practices to do that?
We’ve got a top five list to consider based on our research:
- Pre-diagnose the home before the in-home audit.
- Offer financial incentives for the retrofit more than the audit.
- Use the audit as a sales opportunity for the retrofit.
- Don’t let the homeowner stray after the audit.
- Track retrofit activity that is generated from in-home audits.
This is by no means a complete list for program designers, but we think it represents the minimum that should happen to make sure you get deep energy savings from your audit program.
Energy Audit Programs around the Country
We’ve surveyed 20 energy audit programs throughout the United States to get an idea of what works and what doesn’t in terms of driving retrofit activity from energy audits. Every program we talked with provided homeowners with a report or checklist of recommended energy efficiency upgrades once the audit was complete. But for many, that’s where the program involvement ended.
We were surprised to find that about half of the audit programs we checked out don’t keep track of how many audit recipients are going on to make energy efficiency retrofits to create actual energy savings in their home. Others keep track, but don’t necessarily offer an incentive, or hook, to get homeowners to follow through with the upgrades.
Although some audit programs offer “direct install” energy efficiency improvements during the audit, such as installing low-flow showerheads and CFLs during the walk through, they’re still missing the big savings that can occur as a result of follow-up retrofit activity. To achieve that, the audit and every touch point before and after it, needs to be a sales process for the retrofit. Homeowners need to be convinced that investing in cost-effective but “boring” measures such as insulation and air sealing are worthwhile.
Program Comparison Data
This data was collected as a sampling of energy audit programs across the country, through publicly available information and interviews with utility program managers. Fields noted with “-” indicate that the information was not available or not tracked. If you see any factual errors, contact us.
|Program||Audit Cost to Homeowner||Includes Blower Door Test?||Average Time Per Audit||Audit Required for Retrofit Rebates?||How Many Audits||Audit to Retrofit Conversion Rate||Program Start Date|
|APS (AZ)||$99||Yes||3.5 hours||Yes||1,000 +||30 – 40%||2010|
|Progress Energy (FL)||Free||No||1.5 hours||Yes||56,000 in 2009*||50%||1981|
|Ames Electric||Free||Yes||1.5 hours||No||460||–||2007|
|Xcel Energy (MN)||$100||Yes||2 hours||No||–||–||1983|
|Citizens Electric Corp||$200||Yes||1 hour||Yes||–||–||2009|
|MidAmerican Energy||Free||No||1.5 hours||Yes||100K +||50%||1990’s|
|NJ Natural Gas/Save Green||Free||No||1.5 hours||Yes||3,700 +||– **||2009|
|Columbia Gas (OH)||$20 – $50||Yes||3.5 hours||Yes||2,600||–||2009|
|Energy Trust (OR)***||Free||No||1 hour||No||37,000||35%||2003|
|PPL Electric||Rebate up to $250||Varies||3 hours||Yes||100||–||2010|
|National Grid (RI)||Free||Yes||2 hours||Yes||25K +||40%||1980’s|
|Black Hills Power||Free||No||1 hour||No||300 – 400||–||2005|
|Utah Home Performance||$100||Yes||3.5 hours||Yes||30||–||2010|
|Efficiency Vermont||Rebate up to $250||Yes||3 hours||Yes||–||–||2005|
|Focus on Energy||Varies||Yes||3 hours||Yes||19K +||50%||2000|
|Seattle City Light||$95||Yes||3 hours||No||1300||–||2010|
* – Progress Energy Florida audits include phone pre-diagnosis calls.
** – NJ Natural Gas audits are conducted after retrofit in conjunction with WARMAdvantage program, so there’s no conversion rate or drop-off.
*** – Home Energy Review program.
Converting Homeowners from Audits to Retrofits
The only way to even come close to guaranteeing that a homeowner follows through with retrofit improvements after an audit would be to show up for the audit with all the labor and materials needed for a full retrofit, do the audit and the retrofit work on the same day and to pay for the whole thing. If your program has the resources to do that, you can stop reading here.
The good news is that there are more realistic ways that audit programs around the country have managed to maximize follow-through from audit to retrofit and therefore maximize the effectiveness of audit program dollars. After speaking with a number of program administrators, here are a few of the best practices that we see:
1. Pre-diagnose the problem: Figure out what’s going on before the audit. If done right, this can reduce the amount of data that needs to be collected in home so the auditor can focus more time on explaining and selling the retrofit to the homeowner. And it can even identify homes that don’t need an audit at all because they’re already in great shape – saving the cost of “rolling a truck” unnecessarily.
Progress Energy Florida has been offering free in-home energy inspections for nearly 30 years. In order for homeowners to take advantage of a free in-home audit, they first call in and get pre-diagnosed over the phone by talking with a customer service representative. Only if the house seems like a good candidate based on the phone screen does an auditor go on site to do a walk-through inspection. According to their program administrators, of the 56,000 people who got a phone pre-diagnosis from Progress Energy Florida in 2009, around half went all the way through to make energy upgrades, said Tim Leljedal, a Media Spokesperson at Progress Energy.
Other programs have also used a pre-screening and education step to maximize conversion rates from in-home audit to retrofit: case studies at the Home Performance Resource Center found that conversion rates were 4x – 7x higher for programs that pre-screened.
2. Offer a financial hook for follow-through: Even if you’re subsidizing the audit itself, the important rebates to publicize to homeowners are rebates for retrofit work that comes out of the audit. Columbia Gas of Ohio charges $50 (or $20 if the homeowner is low-income) for their energy audits. But if the homeowner follows through with improvements based on the auditor’s recommendations, they are refunded the initial $50. Additionally, if the homeowner does retrofit work within 30 days of the audit, they get an additional $250 rebate.
3. Sell, sell, sell (the retrofit): Unless a program’s financial incentives are so sweet that they’re impossible to pass up, energy auditors will need to sell the retrofit during the audit – if a retrofit is warranted, obviously. It could be argued, in fact, that the most important function of an in-home audit is to convince the homeowner to follow-through on upgrades, not to gather the data to come up with the perfect energy rating of a house.
The responsibility for selling shouldn’t only fall on the in-home auditor during the audit itself. The sales process for the retrofit begins at the first point of contact with an interested homeowner and should continue through the post-audit follow-up reports.
4. Don’t sell twice: If a homeowner feels as though he or she “buys” an audit, finishes that process, and then has a separate decision to make about completing a retrofit, the sales process has to start all over again. Our recommendation – either work with integrated auditor-retrofitter partners for a program (so a homeowner stays with the same program partner throughout), or facilitate the hand-off from auditor to retrofitter without making the homeowner start over.
From our experience on EnergySavvy.com, we’ve seen that a huge list of contractors, without any guidance or hand-holding for the homeowner, is intimidating. People don’t know where to start or who to call, so they give up and ask for help, or they just give up. And having a homeowner give up at this stage in a program is very costly – it’ll take acquiring many more new potential audit customers to make up for it.
5. Track it: This may seem obvious, but it’s by no means universally implemented. If an energy audit program is going to be optimized based on how much retrofit activity results from it, there’s got to be a system in place that tracks exactly what measures were implemented in the aftermath of the audit. Many programs only track individual measures installed based on rebates redeemed for those measures and don’t report the energy saved from those measures as resulting from the energy audit. Is it really meaningful to give full credit to those single-measure rebates for the energy saved in this situation?
OK, so we agree that in-home energy audits are key to properly diagnosing energy inefficiencies in a home. But without a clear path from audit to retrofit, and a way to track it, the in-home audit is losing its reason for being: to identify and push homeowners to deep energy retrofits that create real energy savings.
To follow up on this analysis – with comments or questions – contact Scott Case, VP Business Development at EnergySavvy.com.