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«Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste Executive Summary The following summaries, provided by ...»

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NREL/BR-710-35075

October 2003

NOTICE

This report was prepared as an account of work sponsored by an agency of the United States government.

Neither the United States government nor any agency thereof, nor any of their employees, makes any

warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or

usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof.

Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste Executive Summary The following summaries, provided by implementers of Home Performance with ENERGY STAR around the country, are for use in the October 15 discussion during the Energy & Environmental Building Association (EEBA) Building Solutions, 2003 Conference in Chicago.

The summaries and session discussions provide an overview of Home Performance with ENERGY STAR, along with results and lessons learned from existing Home Performance implementers in New York, Wisconsin, Massachusetts, California, and Kansas City. Five future pilot projects set to begin in Georgia/Alabama, Idaho, Missouri, New Jersey and Texas will also be presented and discussed.

Session topics will include the use of different training approaches, methods of quality assurance, and the role contractor certification plays in several of the programs. The session will conclude with a roundtable discussion of Home Performance issues by current and emerging implementers, with time for participant questions.

Home Performance with ENERGY STAR uses the growing awareness and credibility of the ENERGY STAR brand to encourage and facilitate whole-house energy improvements in existing homes through self-sustaining energy efficiency programs. Whether you're a state energy official, utility program manager, contractor training professional or efficiency program implementer, you're sure to benefit from the unique presentations and networking opportunities that this session will offer.

1 Home Performance with ENERGY STAR Summaries New York Page 3 Wisconsin Page 9 Massachusetts Page 11 California Page 15 Kansas City, MO Page 20 Georgia/Alabama Page 23 Idaho Page 25 Missouri Page 26 New Jersey Page 28 City of Austin, Texas Page 29

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Overview of the Program New York’s Home Performance with ENERGY STAR Program, developed under the New York Energy $mart program, is administered by the New York State Energy Research and Development Authority (NYSERDA). NYSERDA's initial market transformation approach focused on transforming the ENERGY STAR lighting and appliances market. This approach was expanded in 2001 to include the Home Performance with ENERGY STAR program.

The New York Energy $mart ENERGY STAR market transformation efforts differ from most traditional efforts, which rely on consumer-directed rebates to increase demand. The New York program relies on midstream level incentives to actually change the supply characteristics of the marketplace--from what manufacturers produce, to levels of products that retailers stock, to what practices builders and contractors support. This effort is coupled with an extensive media campaign to spur consumer education and demand for ENERGY STAR labeled products and services. NYSERDA’s strategy is to develop and support an energy-focused home improvement industry, which uses performance-based “building science” techniques to maximize quality, consistency and effectiveness of efficiency improvements in existing 1-4 family homes.

This program is designed to transform New York’s energy efficient construction marketplace through a comprehensive “whole-house” training curriculum leading to a required contractor certification, coupled with a comprehensive consumer and contractor awareness/education campaign and incentives aimed at overcoming barriers to mid-stream market participants.

The comprehensive consumer and contractor awareness/education campaign is focused on “call to action” marketing, creating both consumer demand and contractor participation. Consumer demand is what will ultimately bring about market transformation. Homeowners receive information on the program by accessing our website GetEnergySmart.org or by calling our tollfree number 1-877-NY SMART. As a result of their inquiry, homeowners receive an information packet, a video and most importantly, a list of participating contractors in their area. Providing a homeowner with a list of participating certified contractors not only serves to boost the homeowners comfort and confidence level in the program, but also generates qualified leads for the contractor.

The underlying principles of this innovative and performance-based program are:

• Facilitate the growth of the building performance industry in New York State;





• Increase the energy efficiency, health, safety and comfort of existing 1-4 family housing within New York State;

• Build an infrastructure of certified home performance contractors within New York State;

• Promote the “house-as-a-system” philosophy;

• Maintain the high technical standards, guidelines and integrity of the New York Home Performance with ENERGY STAR program;

• Increase trade adoption and application of the technical “best practices” for home improvement in New York State.

• Incorporate a proven marketing template that increases consumer awareness and demand and encourages contractor participation.

3 All contractors who participate must become certified and accredited through the Building Performance Institute (BPI), a national resource for building science technology that sets the standards for assessing and improving the energy performance of homes. Extensive training places a strong emphasis on building science technology, in addition to energy analysis software, and sales and marketing techniques tailored to the residential contracting business. In order for contractors to become BPI certified/accredited, they need to demonstrate the ability to use advanced diagnostic testing equipment when assessing a home. The program provides the necessary equipment to certified contractors through an agreement directly with NYSERDA.

Additionally, this program is designed to give New Yorkers a “one-stop shopping” experience when implementing energy efficiency improvements in their homes. The same contractor who completes a homeowner’s energy assessment, schedules and completes the work. This assessment is also designed to promote cooperation between trades, further integrating the “house-as-a-system” philosophy. This program rewards contractors who partner outside of their trade to deliver optimum energy efficiency value to homeowners.

The New York Home Performance with ENERGY STAR program incorporates a homeowner financing option that is contractor-originated based on Fannie Mae’s home improvement loan.

Only a BPI certified/accredited firm can offer homeowners’ the low-interest ENERGY STAR financing. Under this financing, once the work scope has been completed, the contractor is paid and the homeowner begins making payments.

The program was introduced in four (4) metropolitan areas in Upstate New York in a staged fashion, beginning with Syracuse in March 2001. It was subsequently rolled out in Albany, Binghamton and Buffalo in the next few months, and then expanded to other areas of the state in 2002.

Marketing:

The overall marketing goal for NYSERDA’s Home Performance with ENERGY STAR is to drive consumers, trade contractors and others to participate in a Market Transformation program for improving the energy efficiency, comfort and health of existing homes. Therefore,

NYSERDA’s primary marketing focus of Home Performance with ENERGY STAR is two-fold:

(1) to recruit and educate contractors to affect change in home improvement services by using a whole house, house-as-a-system approach to diagnose and treat homes; and (2) to increase awareness and demand from consumers to increase residential energy efficiency (long term), and to ask for BPI certified contractors.

The marketing program was launched in February of 2001. The multi-media public awareness campaign includes television, radio, newspaper, direct mail, co-op advertising, public relations and special events. The spokesperson for the campaign is Steve Thomas, television’s renovation and design expert. Mr. Thomas is featured in all the advertising and sales collateral materials used to increase awareness and demand for residential energy efficiency services, as well as to help recruit home improvement contractors for participation in the initiative. His role as television’s renovation and design expert positions him as an unbiased, third party source for the best resources and information about remodeling, renovating and building homes. His media presence is extremely important in maintaining awareness of, and demand for, the comprehensive energy services provided through Home Performance with ENERGY STAR, along with the concern over rising energy costs and tight energy supply in New York, as well as nationwide.

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The following series of tables and charts provide a quick summary of program results and metrics to date.

Table 1 represents the program Household Activity by month for jobs in process and completions from July 2002 through August 2003.

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1000 800 600 400 266 227 214 194 181 179 154 142 137 133 200 106 101 100 87

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Table 3 represents the projected lifetime savings, based on program growth through June 2006, of the Home Performance work completed by participating home performance with ENERGY STAR contractors for New York households to date.

–  –  –

$100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 2001 2002 2003 2004 2005 2006

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Key factors to the program’s success are a well-designed implementation strategy that included a strong marketing component to create consumer demand (paid media advertising), a focus on infrastructure development to create a competent contractor capacity, and a market-by-market approach that balanced consumer demand with the ability to service that demand.

This program has encountered a number of challenges since its inception, including: limited consumer awareness (solution: created and implemented a strong marketing campaign), lack of the trades communicating with each other (solution: designed and implemented contractor referral incentive structure), variations in the consumers’ demographics and market dynamics of each market (solution: strong market research and targeted marketing), lack of consistent standards and best practices (solution: development of consistent certification and accreditation requirements), high contractor business start-up costs, (solution: designed and implemented incentives for training, certification, accreditation, diagnostic equipment), and the lack of the ability for contractors to "close the deal" (solution: implemented contractor originated consumer financing for energy efficiency work).

NYSERDA has made a number of changes since the program began. In mid-late 2002, NYSERDA introduced an additional subsidy for income-eligible households. If the household is in an income range of 60%-80% of the State Median Income, NYSERDA offers a subsidy of 50% to help pay for the eligible work. In October 2002, NYSERDA also introduced a Homeowner Financing Incentive for homeowners who do not use the low-interest ENERGY STAR financing. This is a 10% incentive received by the customer, directly from NYSERDA, after the job has been completed. The customer can apply this incentive toward the principle on the alternative financing they use to pay for the work.

Other recent changes include multiple consumer low interest financing options; additional contractor skill set development (heating, shell, cooling, mobile homes, etc.), and a requirement for a comprehensive assessment on every job.

The next steps for the program are: expansion into the New York City metropolitan area and Long Island, integration of advanced metering, stronger inclusion of ENERGY STAR appliances and lighting, enhanced financing programs, entrance into the remodelers market, and training and certification development for the New York City housing stock (i.e., low-rise residential row housing). Based on the current program growth and expansion into the New York City market, a huge program growth rate is expected over the next few years.

The following bullets outline some additional lessons learned from implementing New York’s

Home Performance with ENERGY STAR program:

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Conclusion:

The key program elements for other program implementers to consider, based on our experiences, are as follows: know your markets (stakeholder involvement), take seriously creating consumer demand (marketing), spend time and resources to build a competent contractor infrastructure (training, certification, accreditation, and technical assistance), and provide ongoing consumer protections by implementing strong program quality assurance and quality control mechanisms.

–  –  –

Overview of the Program Wisconsin's Home Performance with ENERGY STAR is delivered in two segments, the Efficient Heating and Cooling Initiative, and Building Performance.



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