At ILLUME, we are researchers and experts on how to save energy through programs. We are also homeowners and utility customers, and like anyone, when our heating or cooling equipment malfunction, one of the first things we’ll do is call our trusted contractor. As with many utility programs, this relationship between the customer and the contractor is key to making more energy efficient purchasing decisions. As many states and utilities move to decarbonize their energy grid, we have found that programs will need to put even more of their trust in contractors to convince homeowners that transitioning to a different technology – for example, moving from fossil fuel heating to a heat pump – is in their best interest.
ILLUME recently conducted research for a client to help improve Energy Optimization (EO) program efforts. In this northeast U.S. state, many residents rely on heating systems that burn oil or propane delivered to their homes. Our client’s program offers rebates for residents to displace their fossil fuel heating systems partially or fully with more energy efficient heat pumps (HPs) and install integrated controls to optimize use between the two systems.
Lesson #1: If the Contractor Isn’t Sold on it, the Customer Most Likely Won’t Be, Either
Our research revealed that when contractors didn’t understand the value proposition of a newer technology or program offering, they won’t know how to speak about it to the customer. Contractors want to solve a problem for their customers (e.g., make their house more comfortable, reduce high energy bills), and related to this, decrease the number of “call-backs”, i.e., customers calling after the installation because something isn’t right. If it’s not clear that either of these objectives will be accomplished, a contractor is less likely to promote the offering or promote it well. Some of the contractors we spoke with were unsure or doubtful of the value of an integrated control for their customers, and as a result only offered them in specific instances, they were most familiar with or experienced a higher level of call-backs later.
Clearly communicate the value proposition of integrated controls to contractors and provide the tools to sell it. So, what is the value proposition? It’s a straightforward way to say WHY a customer would choose this product. What are the biggest benefits? In this case, a customer may choose to install a new mini-split heat pump and integrated control to connect to their existing propane boiler because it will save them money overall on their energy bills, provide them with better and more even cooling in the summer, and reduce their impact on the environment. Once the value proposition is established, give contractors the tools to execute it, for example with sales trainings and marketing pieces that they can add their branding to.
Lesson #2: Tap the Wisdom of Early Adopters
Our study found that most contractors are motivated to inform customers about the program rebates but are somewhat skeptical of the new technology. Early adopters—generally representing 20% of the population but performing 80% of installations and requiring little to no technical assistance—offer key insights. They have successfully implemented solutions for common challenges in installing and operating integrated controls: connectivity issues, mismatched zoning, and customer tech-savviness. See our case study detailing learnings from early adopters. These contractors’ experience can help educate customers and other contractors.
Compiling and sharing insights from early adopters can help increase contractor knowledge and reduce barriers to program participation. Our research indicates that most contractors do not have the time or resources to dedicate to trying out newer technologies or troubleshooting issues with them. Contractors also often work under the convention of “seeing is believing,” so leveraging the lessons learned from their direct peers via trainings, real case studies, or similar mediums is a potential strategy to increase momentum in the market. Distributors can also be a valuable source of information for programs, and our research found that they are often a go-to resource for contractors. Additionally, programs can work with distributors to increase market momentum by partnering on trainings and other resources.
Lesson #3: Especially with Newer Technologies, Contractors Will Initially Need More Program Support and Guidance as the Market Balances Out
Our client’s program relies primarily on contractors to promote the program to customers, and on equipment manufacturers to provide guidance and training to contractors. A majority (74%) of surveyed customers learned about the equipment they installed from their contractor, and 42% learned about the rebate from their contractor, indicating that contractors are indeed a prevalent resource for customers. However, contractor expertise varied greatly on installing integrated controls, training customers on how to use them, and providing tech support that customers may need. Our study also found that some customers are not using the new technologies properly and override automated controls manually, which may reduce efficiency benefits. Additionally, like any new market, product features and functionality can vary at first until the glitches and customer preferences are more standardized. Our research found that contractors can feel overwhelmed by the differences between products and as a result, may decide not to participate in the program offering at all.
Programs should identify the biggest market barriers for newer technologies, and create, support, or identify resources to address them. Providing contractor trainings is often a key support mechanism that programs can offer or partner on with other stakeholders (e.g., distributors, manufacturers, labor groups). Our research shows that contractor experience and needs may also vary, and trainings should address these different experiences through their training plan. For example, more experienced contractors (like the early adopters noted previously) may only need occasional updates on program offerings and rebates, while our research indicated that less experienced contractors may need more extensive training opportunities, like in-field support and troubleshooting, basics on how the technology works, or sales training (including the value proposition).
Contractors are often the first “line of defense” a program has in convincing a customer to make the more energy efficient purchasing decision. Beyond this, with newer technologies, contractors are also often taking on more responsibility to ensure that the customer knows how to operate it optimally and then troubleshooting customer questions and issues after installation. To ensure program savings, and eventually, market transformation, programs should consider it time well spent when developing tools, trainings, and resources to support contractors with promoting and installing new technologies.