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3 Key Takeaways from the ENERGY STAR Partner Meeting

In pre-COVID times, September was the month that ENERGY STAR Partners would gather together with EPA to discuss new technologies, initiatives, insights and campaigns aimed at creating a more sustainable energy future.  And while virtual meetings have been held in recent years, it wasn’t quite the same. The energy efficiency community was hankering for the chance to get together again, and it finally happened last week.

From September 25 -28, hundreds of utilities, manufacturers, retailers, government representatives and consultants gathered together in Atlanta for the first post-pandemic ENERGY STAR Partner meeting.  This tight-knit community has a long history of coming together to strategize for the future, collaborate on solutions and celebrate success.  And while these events have always been exciting, this year was exceptionally so.

Why? Meet my friend, IRA. The Inflation Reduction Act is a game changer, providing billions of dollars in rebates and tax incentives to spur the transition to clean electric technologies.  It’s the single most powerful tool in the clean energy arsenal.  Currently, state energy offices are building the infrastructure to channel billions of dollars into the market to accelerate energy upgrades in homes and buildings, transform the grid for renewable energy distribution, and develop a skilled workforce to help us move from fossil fuels and into the clean energy future.

It’s a new era of market transformation- but that is something the energy efficiency industry knows a lot about.  Over the past 20 years, we have effectively transformed the market for energy efficient lighting and appliances.  Now, we must focus on the biggest opportunities ahead.  This includes clean heating and cooling, electrified transportation, and broader adoption of renewable energy.

Last week’s gathering showed the industry is ready to rise to the challenge.  State energy offices are setting up programs to bring IRA incentives to market. Retailers and manufacturers are getting ready to fill increased customer demand for energy efficient, heat pump HVAC and water heaters and other clean electric technologies.  Utilities and energy efficiency programs are gearing up for perhaps their biggest market transformation, yet.  And ENERGY STAR is leading the way with consumer insights, campaigns and resources to build awareness and drive action.

Three big themes dominated the conference:

1. Heat Pumps, with Side of Heat Pumps

Energy efficiency portfolios are evolving, and heat pumps are taking center stage, bringing with them a slew of challenges and opportunities.  Heat pump powered HVAC equipment and water heaters are a critical step toward decarbonization, and they bring myriad benefits like lower energy bills, cleaner air, healthier homes and cutting our reliance on fossil fuels.  But transforming this market will be challenging.  According to research conducted by C+C’s Market Intelligence team, consumers are interested in heat pump technology, but have concerns about cost, reliability, and return on investment in markets where electricity costs are higher than other fuels, such as natural gas and propane.  What’s more, consumers don’t typically replace these systems until their current system fails, or at least is near the end of life.  Spurring proactive replacements will be key to success, as will engaging and educating contractors to promote, sell and install them.  IRA incentives will help move both consumers and contractors to action, but as an industry, we must work together to demystify the technology. Gregg Holladay from Bradford White made an interesting point –heat pumps are a proven technology, used successfully for decades in air conditioners, refrigerators, freezers, and dehumidifiers.  Reminding audiences of that fact is important in building trust and acceptance.  My colleague Trevor Rasmussen led a workshop to better understand the customer journey and key motivators and barriers surrounding the adoption of heat pump water heaters. This will help us design messaging and interventions that spur proactive upgrades to clean electric products as we move forward.

2. Achieving Equity with Trust

Energy Equity is core to IRA’s mission. It provides billions of dollars in energy incentives earmarked to help Low to Moderate Income households transition to energy-saving, clean electric home upgrades.  But effectively engaging low-income consumers presents unique challenges.  My colleague Rebecca Strott shared insights from a research study we completed for EPA – that found the typical energy efficiency marketing “hook” of rebates is not as resonant with this audience.  Rebates means getting money after one has already made the upfront investment, which is a barrier to many low-income consumers.  What’s more, trust in rebates and the entities who issue them are lowest among this audience. Building trust, communicating through trusted, local channels, and finding ways to bridge upfront costs and financial incentives will be key to helping achieve energy equity.

3. Marketing Matters

Engaging consumers in the transition to clean energy is going to be a BIG job.  The next wave of upgrades is cost and labor intensive.  However, C+C’s research shows us that people are optimistic about the clean energy future, and they want to be a part of it. They want to understand and lessen their impact on the climate and are motivated to action by messaging highlighting saving energy and creating healthier, more comfortable homes.  They also have a lot of questions we need to answer.

At the conference, I presented ENERGY STAR’s strategy to harness consumer interest in clean energy.:

  1. Launch an aspirational outreach campaign to inspire and engage consumers.
  2. Educate the public about new technologies and resources to create receptivity.
  3. Drive adoption of specific products through targeted marketing and incentives.

This three-fold approach is key to leveraging consumer interest and enthusiasm, building trust in new technologies by answering questions and concerns, and driving the action required to meet our clean energy goals.

As the energy efficiency industry has proven time and time again, it takes a village to transform markets.  But we’ve done it before, and we will rise to the challenge again.  Armed with strategic consumer insights, unprecedented financial assistance and expertise and collaboration of key market actors, we can accelerate the clean energy future and create a more sustainable world.

I look forward to working with my clients, colleagues and other interested parties to make it happen.