ENERGY STARฎ for New Homes
Sponsor and Utility Partner
Guide
LEARN MORE AT
energystar.gov
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Table of Contents
Acknowledgements 5
Introduction 7
Using this Guide 9
Background 11
Builder Barriers to Energy-Efficient Construction 15
Module 1: Program Design 17
1.1. Introduction 17
1.2. Lessons Learned 17
1.3. Program Design Best Practices 21
1.4. Success Stories 22
New York State Energy Research and Development Authority (NYSERDA) 22
Oncor Electric Delivery - Dallas, Texas 23
Wisconsin Energy Conservation Corporation (WECC) 24
Module 2: Marketing and Implementation 25
2.1. Introduction 25
2.2. Lessons Learned 25
2.3. Marketing and Implementation Best Practices 27
2.4. Success Stories 29
CenterPoint Energy - Houston, Texas 29
Northwest Energy Efficiency Alliance (NEEA) and Energy Trust of Oregon 30
Appalachian State University (ASU) Energy Center - North Carolina 31
Rocky Mountain Power - Salt Lake City, Utah 32
Module 3: Program Evaluation 33
3.1. Introduction 33
3.2. Program Evaluation Lessons Learned 33
3.3. Program Evaluation Best Practices 34
3.4. Success Stories 34
Nevada ENERGY STAR Partners - Las Vegas, Nevada 34
California Independently-Owned Utilities 36
Oncor Electric Delivery - Dallas, Texas 37
Advanced Energy Corporation (AEC) - Phoenix Field Research Study 38
References and Sources 39
Appendices 41
A. ENERGY STAR Qualified Homes Utility/Sponsor Fact Sheet
B. First Annual ENERGY STAR Residential Program Sponsor and Utility Partner Meeting
a. Agenda
b. Presentations: Program Design
c. Presentations: Marketing and Implementation
d. Presentations: Evaluation
e. Priority Ranking Feedback: Best Practices and Lessons Learned
C. WECC Homeowner Manual
D. 2006 North Carolina ENERGY STAR Conference Agenda
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Acknowledgements
The ENERGY STAR for New Homes Sponsor and Utility Partner Guide would not be possible without the
input of EPA's partners in the industry. This group includes the ENERGY STAR for New Homes sponsor
partners and stakeholders listed below. These individuals contributed their time and expertise at the First
Annual ENERGY STAR Residential Program Sponsor and Utility Partner Meeting in April 2007, which
was invaluable to the creation of this Guide.
Colby Swanson, Advanced Energy
Kristi Jeffcoats, Advanced Energy
Laurel Elam, Appalachian State University
Cheryl Bowman, CenterPoint
Harold Crowder, Dominion Power
John Shuler, Duke Energy
Blake Howell, Ecos Consulting
Dave Backen, Ecos Consulting
Kendall Youngblood, Energy Trust of Oregon, Inc.
Holly Duquette, Florida Power & Light
Dean Harless, Georgia Power
Ted Jones, Georgia Power
Tony Donald, Georgia Power
Jerry Lyle, Home Energy Concepts
Brian Smith, ICF International
Shelley Martin, Idaho Power
Amy Bryan, Jackson EMC
Lisa Hollingsworth, Jackson EMC
David Reed, JEA
Diana Duffy, KeySpan Energy Delivery
Mike Brown, MaGrann Associates
Tom Moreland, Middle Tennessee Electric Membership Cooperative
William Blake, National Grid
Paulette McGhie, Nevada ENERGY STAR Partners/Energy Inspectors
Anne Brink, Northwest Energy Efficiency Alliance
David Hetherington, Northwest ENERGY STAR
John Morris, Northwest ENERGY STAR
Beth Lonergan, NSTAR Electric & Gas
Steve Bonanno, NSTAR Electric & Gas
Andrew Fisk, NYSERDA
Robert Kasman, Pacific Gas & Electric
Bob Stull, PECI
Dana Cofer, PECI
Bruce Fulmer, Public Service of New Hampshire
Patricia Housand, Santee Cooper
Lisa Nash, Southern California Edison
Abe Kruger, Southface Energy Institute
Kim Hooper, Oncor Electric Delivery
Price Robertson, Oncor Electric Delivery
Tom Moore, Vectren Energy Delivery
Greg Nahn, Wisconsin Energy Conservation Corporation
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Introduction
ENERGY STAR is the government-back symbol for energy efficiency. The mark identifies new homes,
buildings, and more than 50 types of consumer products that are energy efficient and offer the features,
quality, and performance that today's consumers expect.
Homes that earn the ENERGY STAR meet strict guidelines for energy efficiency set by the US
Environmental Protection Agency (EPA). ENERGY STAR qualified homes are at least 15-percent more
energy efficient than homes built to the 2004 International Residential Code (IRC) and include additional
energy-saving features that typically make them 20 to 30-percent more efficient than standard homes.
Qualified homes can include a variety of energy-efficient features, such as effective insulation, high
performance windows, tight construction and ducts, efficient heating and cooling equipment, and
ENERGY STAR qualified lighting and appliances.
Through ENERGY STAR, builders and other home industry professionals can differentiate themselves in
the market, as well as increase revenue, enhance customer satisfaction, and gain national recognition as
industry and environmental leaders. ENERGY STAR and its partners builders, home energy raters,
rating providers, utilities, state and regional sponsors, and lenders work together to promote the
benefits and increase sales of energy-efficient homes.
The ENERGY STAR for Homes program was initiated in 1996 and has experienced exponential growth.
By the end of 2006, over 3,500 homebuilder partners were active in the program and nearly 750,000
qualified homes had been built. Nearly 12 percent of all new housing starts in 2006 were ENERGY STAR
qualified and, in many areas, ENERGY STAR qualified homes represented 20 percent or more of local
home starts.
In concert with EPA's efforts to promote and administer ENERGY STAR for New Homes nationally,
ENERGY STAR also is implemented on a regional and local level by sponsor partners, including utilities,
state energy offices, or other energy-efficiency program sponsors (EEPS). Much of the success of the
ENERGY STAR for New Homes program can be attributed to the work of these sponsors across the
country.
While there is significant variation in how sponsors have designed, implemented, marketed, and
evaluated their local or regional ENERGY STAR Homes programs, all share a goal of leveraging the
ENERGY STAR brand to improve the energy efficiency of new residential construction in their market.
In April 2007, EPA brought together representatives from a number of local and regional ENERGY STAR
Homes programs for a two-day session in Atlanta, Georgia to identify lessons learned and best practice
recommendations for new program sponsors and existing sponsors looking to improve on their programs.
This Guide was prepared based on the extensive input provided during this meeting, as well as EPA's
decade-plus of experience working with diverse stakeholders to implement the program nationally.
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Using this Guide
This Guide is intended to be a reference for sponsor partners to use when developing a new program or
improving an existing program. It illustrates how different approaches have been applied by program
sponsors across a variety of markets and conditions to promote their ENERGY STAR Homes programs
and improve the performance of new homes across their target area.
The Guide is organized into three modules, each of which addresses a key step in developing a local or
regional ENERGY STAR Homes program:
Program Design;
Program Marketing and Implementation; and
Program Evaluation.
Within each module, the following areas are addressed:
Introduction with a general overview of the topic;
Lessons Learned that highlight key points for consideration;
Best Practices that summarize specific guidance; and
Success Stories that demonstrate effective application of best practices and lessons learned.
The summary tables included in each module can serve as a checklist that sponsors can use to identify
how their programs align with lessons learned and best practice recommendations from successful
programs across diverse markets. However, this Guide is not meant to be a 'one-size-fits-all' manual for
developing a successful ENERGY STAR Homes program, as regional factors and organizational
preferences always must be considered.
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Background
Program Benefits
Increasingly, utilities and states are looking to offer energy efficiency programs to meet regulatory
obligations, reduce peak demand, and contribute to environmental protection. Voluntary partnerships are
a key option for meeting these goals because energy efficiency delivers an impressive value proposition
to both consumers and businesses.
Organizations considering implementing local or regional residential energy efficiency programs can
leverage EPA's ENERGY STAR for New Homes program platform to provide:
An off-the-shelf proven solution
It can be expensive and time consuming to develop and implement a residential energy efficiency
program from scratch. ENERGY STAR provides a great off-the-shelf option with a long track record of
success. Today, over 65-percent of households recognize the ENERGY STAR (according to a 2006
survey conducted by the Consortium for Energy Efficiency (CEE)) and over one billion ENERGY STAR
qualified products sold. By the end of 2006, Americans, with the help of ENERGY STAR, had saved
about $14 billions on their utility bills and reduced greenhouse gas emissions equivalent to those of 25
million vehicles. By tapping into ENERGY STAR, program sponsors can leverage a powerful brand
advantage, along with fully-developed technical specifications, implementation policies, marketing tools,
sales training, and technical support available from EPA at no cost. A detailed discussion about many of
these implementation tools is provided later in this section.
Increased customer value
Sponsors' constituents are increasingly concerned about environmental issues and rising energy costs.
Co-branding outreach and educational efforts with ENERGY STAR allows utilities and states to
demonstrate a strong commitment to action. In addition to protecting the environment, ENERGY STAR
qualified homes offer significant cost savings and better performance for homebuyers.
Address business objectives
Building new power generation facilities can be costly and contentious for utilities. By encouraging the
construction of ENERGY STAR qualified homes, program sponsors can help to manage peak demand,
even as their customer base increases. Additionally, many public utility commissions are mandating
significant investments in energy efficiency programs. Many organizations are meeting their demand-side
management commitments by sponsoring ENERGY STAR initiatives.
Growth of New Homes Program Sponsors
Prior to 2001, only 16 organizations partnered with EPA as regional ENERGY STAR program sponsors.
Since that time, the number of active utility and sponsor partners has grown to over 80 partners across 33
states - representing a 400-percent increase in six years. These locally-sponsored programs contributed
over 430,000 ENERGY STAR qualified homes by the end of 2006. States with strong participation by
sponsors implementing a local ENERGY STAR Homes program in 2006 are shown shaded in Figure 1.
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Figure 1. States with Active ENERGY STAR Sponsors in 2006
Washington
Maine
Montana
North Dakota Minnesota
isconsu
South Dakota
Wyoming
Pennsyluania New Jerjeg
io J'1^ -fSrd. Delaware
West
Virginia Virginia - [i.e.
Nebraska
Meuada
Colorado
Kansas
Missouri |Fฎntucky
Ca ifornia
Tennesi
Oklahoma
Arkansas
Arizona
iouth Carolina
Mem Mexico
ieorgia
Louisiana
Hawaii
EPA Support
At the national level, EPA offers a variety of tools for recruiting builders, marketing to homebuyers,
training builders and subcontractors to meet technical requirements, and training sales professionals.
These tools are offered free-of-charge to program sponsors and discussed further below:
Outreach Partnership Campaign
For the past six years, ENERGY STAR partners, including homebuilders, home energy raters, and
utilities, as well as other local supporters, have pooled resources to increase consumer demand for
ENERGY STAR qualified homes in their markets through the ENERGY STAR Outreach Partnership. The
Outreach Partnership is designed to provide a sustained local presence for ENERGY STAR and help
build consumer awareness on the benefits of ENERGY STAR qualified homes and the builders who offer
them.
In markets where partners use EPA-created advertising to cooperatively promote ENERGY STAR
qualified homes in a major local newspaper or new homes guide, on billboards, through radio
advertisements, or in other media, EPA will complement that commitment with a separate, equivalent
outreach effort. The resulting frequency of messaging about ENERGY STAR qualified homes has proven
very effective at both increasing consumer awareness and engaging non-participating builders to join the
program.
Marketing Toolkit
Field observations indicate that builder sales staff and real estate agents often do not effectively convey
the benefits of energy efficient homes to potential homebuyers. In addition, many builders are reluctant to
use generic consumer materials that do not adequately highlight their own brand. The ENERGY STAR
for Homes Marketing Toolkit is designed to address both of these issues by providing an easy-to-use
Web tool that allows builders to quickly produce a wide variety of customized ENERGY STAR point-of-
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sale materials featuring the builder's name, logo, web site, images, and editable text that can precisely
match their construction practices and preferred language.
Brochures and Fact Sheets
For builders who prefer to use pre-printed consumer materials from EPA, ENERGY STAR offers a
consumer brochure and several fact sheets that highlight the features and benefits of qualified homes to
homebuyers. These brochures can be ordered through the ENERGY STAR Web site
(www.energystar.gov/homes).
Technical and Sales Training
EPA staff and consultants have trained thousands of builders on a variety of issues related to
constructing and selling ENERGY STAR qualified homes. Sample presentation materials are available
on the ENERGY STAR Web site. In addition, EPA offers on-site training and/or train-the-trainer sessions
on a limited basis.
Partner Locator
EPA's ENERGY STAR for New Homes Web site features a Partner Locator that lists all active partners,
including builders, home energy raters, lenders, and program sponsors. Each listing includes contact
information and accomplishments with regard to qualifying homes - both cumulatively and within the last
12 months. Partners that meet ENERGY STAR'S Web Linking Policy can also have their listing 'hot-
linked' to their own Web site. The Partner Locator is very effective in directing homebuyers to
participating builders, builders to the regional rating infrastructure, and all stakeholders to regional
sponsor programs.
Partner Recognition
EPA has a variety of awards that recognize committed program partners throughout the year. These
include: 100% award plaque for builders that commit to constructing all of their homes to ENERGY STAR
requirements; Outstanding Achievement Awards given to builders, home energy raters, and sponsors that
have qualified a threshold number of homes in the past year; and the annual Excellence in ENERGY
STAR Promotion and Partner of the Year Awards for outstanding efforts by builders, home energy raters,
and sponsoring programs for their contribution to increasing consumer awareness of ENERGY STAR in
the market.
Builder Recruitment Toolkit
EPA is developing an ENERGY STAR Builder Recruitment Toolkit to help sponsor and home energy rater
partners recruit builders and promote ENERGY STAR for New Homes. Components of the Toolkit will
include a builder recruitment presentation, a "Top Ways to Reach and Retain Homebuilders" fact sheet, a
compilation of success stories collected from current ENERGY STAR builder partners, an ENERGY
STAR builder recruitment brochure, and a "Guide to Understanding the Home Building Industry." Look for
this Toolkit at the end of 2007.
ENERGY STAR for New Homes Sponsor and Utility Partner Guide
This Guide is intended to be a reference for sponsor partners to use when developing a new program or
improving an existing program. It illustrates how different approaches have been applied by program
sponsors across a variety of markets and conditions to promote their ENERGY STAR Homes programs
and improve the performance of new homes across their target area.
Annual ENERGY STAR Sponsor and Utility Partner Meetings
Building on the successful initial ENERGY STAR for New Homes Sponsor Partner meeting held in April
2007, EPA will continue to co-sponsor annual partner meetings to explore topics pertinent to the
implementation of regional programs and facilitate an open exchange of ideas and strategies among
stakeholders. These meetings are by invitation only to active and prospective sponsors. The next
meeting is tentatively scheduled for the spring of 2008.
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Builder Barriers to Energy-Efficient Construction
In many markets, builders must be 'convinced' of the business
advantages of constructing ENERGY STAR qualified homes. This
requires an effective value proposition that overcomes builders'
perceived, and often unfounded, barriers to participation.
At the First Annual ENERGY STAR Residential Program Sponsor and
Utility Partner Meeting, participants brainstormed about the challenges
they have experienced in promoting energy efficient construction
practices to the home building industry. This resulted in an extensive
list of barriers that can be sorted into five broad categories: high cost,
lack of consumer demand, lack of sales skills, industry resistance to
change, and lack of technical infrastructure. 'Lack of education' was
cited most frequently by meeting participants as a high-priority builder
barrier to overcome, followed by 'overall cost to participate.'
Table 1. Builder Barriers to Energy-Efficient Construction
1. High Cost
Higher first-cost of construction
Overall cost of participating
2. Lack of Consumer
Demand
Perception that consumers do not value energy efficiency
Lack of homebuyer education
Lack of education of key players involved in home sales process (real
estate agents, appraisers, lenders)
3. Lack of Sales Skills
Energy and non-energy benefits of energy efficiency are harder to
sell because they are not visible to home buyers
Lack of trained sales agents to sell the value of energy efficiency
4. Industry Resistance
to Change
Risk/fear of the unknown
Risks associated with changing requirements and codes
Perception that builders are already building efficiently
Changing market conditions (e.g., transitioning from a seller's to a
buyer's market)
Difficulty securing/keeping internal champions
Perceived program complexity and changes
Confusion with competing programs (e.g., green)
5. Lack of Technical
Infrastructure
Local HERS infrastructure is not matched to the number of builders in
a market
Lack of quality subcontractors and/or subcontractors' high turn-over
rate
Lack of technical solutions for all housing types (e.g., multi-family)
Lack of local building-science experts
The following modules of this Guide address how new ENERGY STAR Homes program sponsors can
apply lessons learned and recommended best practices into their program design, marketing,
implementation, and evaluation to successfully overcome each of these common builder barriers.
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Module 1: Program Design
1.1. Introduction
The key to a successful Program Design process is having a thorough
understanding of the market; and then effectively addressing the most important
regional factors and builder barriers. It also is important at this time to consider
what information will be needed later in the process for program evaluation so
that tracking systems and other data collection processes can be designed from
the start.
1.2. Lessons Learned
Key lessons learned from successful program sponsors concerning Program
Design include:
1.2.1 Every market is different; research your own market before moving forward.
There is no 'one-size-fits-air approach to Program Design. Some markets are represented by mostly
small regional and custom builders, while others are dominated by large production builders; some
markets have a strong home energy rater presence, while others have minimal or no rater infrastructure;
some markets will have a large multi-family construction sector, while others are predominantly single-
family; and some markets would benefit from energy efficiency programs addressing affordable housing,
while others already have a strong local or state affordable housing program. Therefore, adequate
marketing research is critical, including analyzing current market trends, the local homebuilding industry,
and the local economy.
A summary of important regional factors to consider are provided in Table 2 below, organized according
to the five builder barrier categories. Nearly 80 percent of meeting participants ranked understanding
'predominant builder profiles in the market' and 'maturity of home energy rating infrastructure' as the most
important issues to address during Program Design.
Every market is different; thoroughly research your own market
before moving forward.
A working home energy rater infrastructure is critical; do not start a program without one.
Incentives can help address critical barriers, but larger incentives are not always better.
Always include a strong program marketing component.
Establish effective communication with all program stakeholders from the beginning.
Builder training should be ready to launch as early as possible.
Address evaluation needs during Program Design.
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Table 2. Regional Factors to Consider
1. High Cost
Impact of regional construction costs and availability of energy-efficiency
measures on cost-effectiveness from builder perspective
Cost-effectiveness from utility perspective
Utility rates
2. Lack of Consumer
Demand
Existing awareness of energy efficiency and ENERGY STAR
Presence of other programs and incentives in the market (e.g., green, utility,
tax credits, state)
Availability of collaborative partners
3. Lack of Sales Skills
Baseline level of builders promoting energy-efficient homes
Degree at which energy efficiency is promoted in the sales process
4. Industry Resistance
to Change
Rigor of prevailing state or local code
The state of the economy
The state of the housing market
Builder geographic distribution
Builder size profile
Builder production processes (e.g., project sequencing, material availability,
subcontractors)
5. Lack of Technical
Infrastructure
Maturity of HERS infrastructure
Technical maturity of builders and subcontractors
Prevailing housing types (e.g., single-family, multi-family)
Prevailing construction (e.g., duct type/location, foundation)
Type and number of climate zones in region that may affect design
Utility Planning
Process
Size of market
State regulations regarding utility implementation
Availability of funds
Cost-recovery factors
Capacity constraints
Funding cycle: single-year programs are much more challenging than multi-
year programs to leverage builder commitments
1.2.2 A working home energy rating infrastructure is critical; do not start a program without one.
Home energy raters (also known as HERS raters) serve many critical roles for an effective ENERGY
STAR for New Homes program. First and foremost, they verify that homes meet EPA guidelines by
conducting plan evaluations and performing field inspections and testing. They also can serve as a highly
effective sales force because often much of their business revenue is derived from successfully recruiting
builders and qualifying their homes. They often can provide valuable training, including technical training
for builders and subcontractors, sales training for builder sales agents and real estate agents, and
education for homebuyers about the benefits of energy efficient homes.
Because they can play such a critical role, an important first step in Program Design is to analyze the
maturity of the current HERS rating infrastructure, as well as local conditions needed to attract raters to
the market. For example, in markets dominated by smaller dispersed builders, it may be more difficult to
attract HERS raters, resulting in the need to allocate more effort and resources to get related businesses
(such as home inspectors and insulation subcontractors) to augment their capabilities with HERS ratings
(reference Section 1.4 for related sponsor success story). In markets dominated by large production
builders, facilitating a meaningful HERS rating infrastructure can be as simple as broadly promoting the
program to the nation's largest HERS providers, many of whom can easily establish new locations
working with their central headquarters operations.
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When assessing the HERS infrastructure, an important lesson learned is that quality is more important
than quantity, and that even a strong HERS infrastructure cannot overcome a faulty program design
strategy. Consider this comparison of the relative success of ENERGY STAR for New Homes in two
different markets: In one large metropolitan region with no sponsor support, over 30 percent market
penetration was achieved with a rating infrastructure composed of one very business-sawy, efficient
HERS provider. In another market with over a decade of sponsor support, little market penetration was
achieved with a very large number of certified HERS raters.
1.2.3 Incentives help address critical barriers, but larger incentives are not always better.
Once market research identifies the most critical builder barriers to adopting energy efficient construction
practices, the use of one or more incentives addressing these barriers has proven successful. Incentives
can 'jumpstart' program participation and, if strategically designed, can lead to a healthy, self-sustaining
market even after they are phased out. Incentives can include direct monetary payments, such as
rebates, indirect monetary assistance such as free HERS ratings; or non-monetary assistance such as
free training. Direct payments are typically provided to builders rather than homebuyers to reduce
transaction costs and to maximize builder interest in participation. Incentives currently offered by program
sponsors for ENERGY STAR for New Homes include:
Cash rebates;
Free or subsidized home energy ratings;
Advertising (e.g., cooperative, sponsor paid);
Free or subsidized training (e.g., technical, sales);
Free marketing materials;
Discounted utility bills for homeowners (e.g., 5% or 10% discount for full term of ownership);
Rebates for ENERGY STAR qualified products (e.g., lighting fixtures, appliances, CFL bulbs);
Rebates for high-efficiency equipment (e.g., furnaces, boilers, heat pumps, and water
heaters); and
Rebates for qualified model homes.
Figure 2 below compares the cash value of incentives offered for ENERGY STAR qualified homes with
the percentage growth of qualified homes in nine different, undefined markets. The results suggest little
correlation between market growth and the monetary value of incentives. Rather, the results show that
incentives can play a role in the success of a program, but that other factors are often more important.
Figure 2. Cash Value of Incentives Compared to Percentage Growth over Past Five Years
S Incentive
Geogiaphic Atea
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1.2.4 Always include a strong marketing component.
As in many business endeavors, effective marketing of energy efficient homes is critical to success. The
marketing component of an ENERGY STAR Homes program should be designed both to attract builder
partners and to increase consumer awareness. Once the program is established, marketing efforts are
also needed to help retain builders' interest.
A key ingredient of an effective marketing strategy is to develop compelling messages. For builders, it is
important to emphasize the value of the program as it relates to their business objectives (e.g., market
share, competitive advantage, reduced liability). For consumers, the message should be as simple as
possible and convey compelling homeownership benefits (e.g., better homes for lower cost of ownership).
Once messaging is developed, the marketing strategy should ensure frequency of messaging (e.g.,
multiple advertising placements vs. single events).
When developing a marketing strategy, sponsors should recognize that high-cost marketing is not always
the most effective option. There are many examples where consumer awareness was substantially
increased with "lean-and-mean" marketing activities and without expensive options like radio and
television advertising and exhaustive public relations campaigns. The key is to effectively target widely
recognized "touch points" from which consumers obtain their information about new homes. In markets
dominated by large production builders, sponsors have found marketing-incentive programs (e.g.,
cooperative advertising) are very attractive to builders and get them vested in the program and the
ENERGY STAR brand.
Sponsors should be sure to take advantage of all of the available marketing tools and materials from the
national ENERGY STAR for Homes program (refer to Introduction Section of this Guide and the ENERGY
STAR for Homes Web site - www.enerqvstar.gov/homes).
1.2.5 Establish effective communication with all program stakeholders from the beginning.
Developing and nurturing strong relationships with all program stakeholders (e.g., consumers, builders,
home energy raters, real estate agents, appraisers, and related home builder and trade associations) is
also a critical factor for success. This relationship-building begins by establishing procedures and
expectations during the Design Phase, including establishing processes that involve stakeholders in
important decisions and milestones, as well as periodic communication through newsletters and e-mails.
It is particularly important to allow long lead times, typically at least six months, to educate partners about
any upcoming changes to program requirements or incentives. To effectively manage limited resources,
it is important to identify "champion" builders and emphasize communication with them since they can
leverage the greatest growth through their own participation and ability to attract competitors to join the
program.
1.2.6 Builder training should be ready to launch as early as possible.
One of the worst outcomes for a program is when builders have bad experiences because they fail to
meet technical requirements. A builder's participation will be impacted negatively if the home energy
rater infrastructure is not ready, subcontractors are not prepared to address more rigorous scopes of
work, or they were not fully informed of program requirements. Where market research has identified
technical barriers, it is important that the Program Design address them with solutions at the start of the
program.
1.2.7 Address evaluation needs during Program Design.
Continuous improvement should be part of every ENERGY STAR Homes program, and this is only
possible with a strong program evaluation. This begins during the design process by identifying the most
important information needed to verify that key business objectives are being achieved (e.g., energy
savings, peak-demand reduction) and to improve the chosen design strategy (e.g., incentives, marketing,
HERS infrastructure, technical training). A common mistake made during evaluation is tracking
information that program staff would like to have rather than information needed to demonstrate and
improve program effectiveness. This can waste significant program resources and shift focus to less
critical priorities.
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1.3. Program Design Best Practices
Based on the lessons learned from program sponsors, best-practice recommendations identified for
Program Design are provided in Table 3.
Table 3. Program Design Best Practices
1. High Cost
Consider the most effective options for program incentives (e.g., consider
successful strategies that worked in similar markets)
Train builders how to sell the value of energy-efficient homes
2. Lack of Consumer
Demand
Provide funding to educate consumers
Choose the most effective options for educating consumers (e.g., consult
consumer research)
Develop consumer testimonials
3. Lack of Sales Skills
Develop builder sales training
Develop train-the-trainer sales programs
Develop point-of-sale materials and/or templates for builders (e.g., displays,
banners, fact sheets, homeowner manuals)
4. Industry Resistance
to Change
Create an effective value message for recruiting builders
Consider incentives that effectively address builder business priorities (e.g.,
suggest linking incentives to individual sales staff)
Incorporate partner recognition into the program (e.g., awards, advertising
public relations, builder listing)
5. Lack of Technical
Infrastructure
Develop local HERS infrastructure
Develop technical support (e.g., reference materials, how-to guides)
Develop train-the-trainer for technical subjects
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1.4. Success Stories
New York State Energy Research and Development Authority (NYSERDA)
Market Research:
NYSERDA chose to initially deliver its ENERGY STAR Homes program in upstate New York, where the
home building industry is dominated by widely-dispersed, hard-to-reach small and mid-sized regional
builders experiencing much slower growth than builders in warmer climates in the state.
Key Barriers Targeted:
Lack of Technical Infrastructure
Early in the Program Design phase, NYSERDA realized that home energy raters were poorly represented
in the widely-dispersed small markets in upstate New York. Additionally, standard building practices did
not meet key ENERGY STAR requirements (e.g., duct sealing, low air infiltration).
High Cost
The upstate New York market was not experiencing the same housing growth and appreciation as many
other markets around the country, making first cost a particularly critical issue for builders looking at the
bottom line.
Lack of Consumer Demand
Although consumers in New York were becoming familiar with ENERGY STAR as a label for products,
very few consumers understood that the label also applied to new homes.
Design Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, NYSERDA's Program Design included:
Offering extensive HERS training to local businesses and contractors, along with a free "loaner"
program for testing equipment that automatically switched ownership to new home energy raters for
free if they met critical objectives.
Focusing on market "pull" rather than "push" by cultivating consumer demand for ENERGY STAR
qualified homes, given the high cost to reach widely dispersed builders. This included print
advertisements, participation in home shows, and involvement with the This Old House series on
PBS.
Implementing an aggressive advertising campaign using a regionally-recognized celebrity from the
This Old House series on PBS to promote program benefits along with excellent point-of-sale
collateral material.
Conducting extensive technical training for home builders and subcontractors.
Offering a cash rebate for each home, along with a rebate for model homes in subdivisions.
Results:
NYSERDA was able to quickly establish a home energy rater infrastructure in key markets that
enabled builders to work with the program.
Industry feedback indicates NYSERDA has educated consumers effectively about the cost, comfort,
safety and environmental benefits associated with ENERGY STAR qualified homes, and this has in
turn spurred impressive growth in builder participation.
By the end of 2006, the market penetration of ENERGY STAR qualified single-family homes in New
York's geographically dispersed market was over 10 percent, and the ENERGY STAR brand is
positioned for strong continued growth.
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Oncor Electric Delivery - Dallas. Texas
Market Research:
Dallas is dominated by large production builders experiencing significant growth, and the old building
code had been upgraded recently to the much more rigorous 2000 IECC energy code. It was determined
that the existing home energy rater infrastructure was not sufficient to meet ambitious growth goals for
Oncor's ENERGY STAR Homes program.
Key Barriers Targeted:
Lack of Technical Infrastructure
The HERS infrastructure was inadequate for program goals, and suffered from the classic "which comes
first, the chicken or the egg?" dilemma. This is because HERS raters are reluctant to set up business in a
market without a lot of builders engaged in ENERGY STAR, and builders are reluctant to join ENERGY
STAR without HERS raters to verify their homes.
Lack of Consumer Demand
Although Texas consumers were familiar with ENERGY STAR as a label for products, very few
consumers understood that the label also applied to new homes.
Design Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, Oncor's Program Design included:
Delivering free HERS accreditation training programs, providing workshops on how to own and
operate a successful HERS provider business, and offering raters an incentive to subsidize upfront
expenses.
Providing a free plan analysis incentive to priority builders in the market and awarding builders a
specific number of incentives through a competitive application process. This also helped to ensure
that local HERS raters had adequate business volume early in the program.
Results:
The number of HERS raters in the market grew from one in 2001 to 16 in 2007.
Starting in 2004, the HERS infrastructure was successfully established, and Oncor no longer needed
to offer free plan reviews or trainings.
As HERS incentives were phased out, this substantially reduced program costs while builder
participation and the number of ENERGY STAR qualified homes continued to increase substantially.
By the end of 2006, more than 46,000 homes earned the ENERGY STAR in the Dallas/Ft. Worth
metro area - representing 25 percent of new home starts.
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Wisconsin Energy Conservation Corporation (WECC)
Market Research:
The home-building industry in Wisconsin is dominated by widely-dispersed, hard-to-reach small and mid-
sized regional builders experiencing much slower growth than builders in warmer climates. Many
Wisconsin builders were constructing tight homes, but the HVAC vendors were providing extremely leaky
HVAC duct systems and were reluctant to change.
Key Barriers Targeted:
Lack of Technical Infrastructure
Most HERS raters had little experience working with new construction.
Industry Resistance to Change
Builders in Wisconsin had demonstrated the ability to built tight homes, but subcontractors were resistant
to tightening ductwork. Moreover, where homes could be built extremely tight and ducts located inside
conditioned space, duct leakage was not seen to be as critical to achieving energy-efficient performance
in this region.
Design Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, WECC's Program Design included:
Developing building performance standards and protocols based on the specific climate and housing
stock in Wisconsin and emphasizing the ability to build extremely tight homes with ducts inside the
conditioned space.
Focusing builder messaging benefits of reducing callbacks and limiting liability.
Focusing on strengthening the technical infrastructure. This included documenting construction
details and sharing information and technical training with the HERS industry.
Providing direct training for builders and subcontractors to help create market awareness
and increase recognition of rater skill sets and their value as a resource for building performance
consulting.
Investing resources in outside experts to train their existing infrastructure and bring greater credibility
to the program's standards and training curriculum.
Relying on leveraging partnerships within the building industry. This included partnerships with local
home building associations, product manufacturers, and suppliers who came to view the training
opportunities and program consultants as trusted resources working in their collective best interest.
This was successfully achieved by collaborating with association committees, co-sponsoring local
trade and home shows and providing participant scholarships for regional and national events.
Results:
During the 2005-2006 program years, WECC sponsored 26 training events, most delivered by
program consultants, for over 1,300 building professionals. Through training for builders, technical
exchange meetings for builders and raters, and train-the-trainer trainings for the HERS infrastructure,
WECC developed a trusted local group of recognized consultants and training programs and created
a platform for continuous program improvement.
Significant improvements in observed building practices have been attributed in part to the
educational programs.
To date, over 8,000 ENERGY STAR qualified homes have been built under Wisconsin's ENERGY
STAR Homes program, with total market penetration approaching 10 percent statewide.
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Module 2: Marketing and Implementation
2.1. Introduction
Program Implementation includes all activities needed to deliver the program,
including day-to-day administration, communication, marketing, and technical
and sales training.
Marketing is featured in the title of this module because program goals (e.g.,
energy savings, peak-demand reduction) are so dependent on effectively
motivating builders to join the program and increasing consumer demand for
ENERGY STAR qualified homes. Indirect benefits of marketing campaigns
can include driving competitors of program participants to join and increasing
opportunities to leverage support from a diverse array of stakeholders
motivated to be part a successful program.
A variety of marketing strategies have been used by program sponsors
across the country. Sponsors often begin with an aggressive marketing plan that employs a variety of
outreach activities and promotions tied to specific goals for qualified homes and consumer demand. As
these goals are met, sponsors can reduce implementation costs by reducing or phasing out program-
recruitment efforts, marketing support, training, and incentives. However, some level of ongoing
marketing support for the program is desirable to maintain consumer awareness and continue to motivate
builder participation.
2.2. Lessons Learned
Key lessons learned from successful program sponsors concerning Program Implementation and
Marketing include:
Effective marketing conveys benefits in simple terms that consumers can understand.
Effective marketing is frequent.
Training is so important that it is worth investing in experts.
Coordinate and co-market with green programs.
Leverage stakeholder support.
Incorporate a tracking system.
2.2.1 Effective marketing conveys benefits in simple terms that consumers can understand.
Conveying the benefits of energy-efficient homes to consumers can be a challenge. To engage the
average consumer, benefits must be stated clearly in simple terms they care about. They should answer
the question, "what's in it for me?" This often entails easy-to-understand analogies to simplify technical
concepts. Some examples are below:
Technology: Air Sealing and Insulation that Works
Consumer Benefit: Air leakage and improperly installed insulation can waste 20 percent or more of the
energy you pay to heat and cool your home. Typical homes have so many leaks, it's like having a
window open all the time, winter and summer. Weil-sealed and properly insulated wails, ceiling, and
floors help maintain even temperatures throughout the house and save you up to 20 percent on heating
and cooling costs. A tighter home also reduces the amount of humidity, dust, pollen, pests, and noise
that can come inside.
Technology: Duct Sealing
Consumer Benefit: Your home's ducts move heated and cooled air to the living areas to make you feel
comfortable. But in a typical house, 20 percent of the air that moves through the duct system is lost due
to leaks, holes, and poor connections. Leaky ducts also let dust, moisture, pollen, pests, and noise into
your home.
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Technology: Advanced Low-E Windows
Consumer Benefit: Windows are an important part of your home's beauty. But in typical homes,
windows made with older techniques are simply too cold in the winter and too warm in the summer
making you feel uncomfortable and wasting energy unnecessarily. ENERGY STAR windows, doors, and
skylights keep your home cooler in the summer and warmer in the winter, reduce moisture condensation
on window panes and sills, and minimize interior fabric fading.
2.2.2 Effective marketing is frequent.
A common sales axiom is that it takes numerous times for a person to hear a message before it is
retained. This rule of sales is the driving motivation for the ENERGY STAR for Homes Outreach
Partnership Campaign, in which EPA places eight to 13 weeks of advertisement (up to a funding limit)
when a group of at least three partners agree to place eight to 13 weeks of advertisements. This
campaign, as well as other sponsor-preferred marketing efforts that achieve frequency of messaging, are
needed to successfully increase consumer awareness and dramatically enhance other single-event
activities such as media coverage, home-show booths, home tours, and special speaker sessions.
2.2.3 Training is so important that it is worth investing in experts.
Effective training can help a program sponsor to:
Establish a viable home energy rating infrastructure.
Prepare local subcontractors for success.
Set clear expectations and requirements for builders so they can become satisfied program
customers.
Train sales agents and real estate professionals to effectively communicate the benefits of
energy efficient homes.
Educate homebuyers about the benefits of purchasing energy-efficient homes.
For the past decade, a broad group of building science and marketing experts have developed proven
techniques and curricula for this training. Program sponsors have indicated that investments in these
experts, both for direct training and train-the-trainer sessions, have paid large dividends that support their
growth objectives.
2.2.4 Coordinate and co-market with green programs.
Homebuilders and homebuyers today across the country are increasingly interested in green building.
But many are confused about what actually makes a home green. There are over 50 regional and
national green home labeling programs across the country. While each approaches green a little
differently, they all incorporate energy efficiency as a prominent part of program requirements.
It would be easy for energy efficiency program sponsors to get overwhelmed by this frenzy of green
activity. But it is important to recognize that energy efficiency accounts for much of the utility-bill savings,
comfort, durability, and indoor-air-quality benefits promised by green programs. As a result, program
sponsors should seek to proactively establish their ENERGY STAR Homes programs' prominent place
among these green programs and identify energy efficiency as the cornerstone of green. Regardless of
which of the many green programs is of interest in the market, builders and homebuyers should be
educated to look for the ENERGY STAR mark to ensure truly energy-efficient performance in their new
homes ("green begins with ENERGY STAR blue"). This often can be accomplished by looking for
opportunities to coordinate and co-market with emerging or established green programs.
2.2.5 Leverage stakeholder support.
There are many valuable partners with congruent interests in promoting energy-efficient building practices
and products (e.g., manufacturers, suppliers, local home builder associations) who can be leveraged to
fund/sponsor a wide array of actions (e.g., advertising, training, local events, and program evaluation).
This stakeholder support can substantially expand outreach and training efforts and significantly impact
the success of program implementation. Thus, the implementation process should devote meaningful
resources to recruiting and working with stakeholders.
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2.2.6 Incorporate a tracking system.
As discussed in the Program Design module, the design process should address evaluation needs,
including identifying data needed to measure growth and effectiveness of the implementation strategy.
Tracking systems need to be put in place for this data immediately upon program start-up, especially for
data establishing baseline conditions. The following data should be considered for tracking from the start
of program implementation:
Verification data (e.g., number of homes qualified, addresses, builders).
Number of home energy raters.
Utility billing data tracking system for ENERGY STAR qualified homes vs. control homes.
Peak demand measurements for ENERGY STAR qualified homes vs. control homes.
Consumer awareness (e.g., surveys, subdivision exit polls) at the beginning of the program
and at desired time intervals.
Builder use of marketing tools.
Attendance and satisfaction with training programs.
2.3. Marketing and Implementation Best Practices
Based on the lessons learned from program sponsors, best-practice recommendations identified for
Marketing and Implementation are provided in Table 4. 80 percent of meeting participants identified
educating consumers on the value of ENERGY STAR as a top-priority recommendation and 65 percent
identified incorporating builder sales training.
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Table 4. Marketing and Implementation Best Practices
1. High Cost
Provide incentives, but be sure to allocate a significant portion for marketing
Consider incentives for model homes promoting the ENERGY STAR brand
2. Lack of Consumer
Demand
Provide funding for builders to educate consumers (e.g., cooperative
advertising)
Educate consumers on the value of ENERGY STAR (e.g., public relations,
Web information, articles, ENERGY STAR Outreach Partnership Campaign,
advertising, bill inserts)
Link incentives to homes events (e.g., Parade of Homes)
Develop consumer testimonials
When growth is sufficient, integrate ENERGY STAR into regional MLS
Consider training for appraisers and lenders
Cross market with ENERGY STAR qualified products
3. Lack of Sales Skills
Develop builder sales agent/real estate agent training
Provide guidance on how to use available marketing tools
Develop train-the-trainer sales training programs
Promote ENERGY STAR Marketing Toolkit
Provide a homeowner manual or insert for builders
Consider linking incentives to the builder sales person to better motivate
him/her to sell ENERGY STAR
4. Industry Resistance
to Change
Consistently and effectively convey the value message
Promote incentives if offered
Provide partner recognition (e.g., awards, listing on the program Web site
and advertisements)
Publish articles in local HBA newsletter
Provide performance feedback to builders
Sponsor ENERGY STAR events
Promote successful builders to attract their competitors
5. Lack of Technical
Infrastructure
Recruit/nurture the HERS infrastructure
Consider facilitating a regional HERS association
Provide tight QA/QC for HERS verification
Provide technical support
Provide train-the-trainer technical training
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2.4. Success Stories
CenterPoint Energy - Houston. Texas
Background:
CenterPoint had implemented the 'Good Cents' program in years past, but was switching to ENERGY
STAR for New Homes.
Key Barriers Targeted:
Lack of Consumer Demand
Consumer demand for ENERGY STAR qualified homes needed to be increased substantially to meet
critical objectives.
Industry Resistance to Change
Builders needed motivation and recognition to meet ENERGY STAR requirements that were more
rigorous than the Good Cents program.
Marketing and Implementation Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, CenterPoint's Marketing and Implementation Strategy included:
Undertaking an aggressive broad-based marketing campaign to jumpstart the ENERGY STAR
Homes program in the market.
Utilizing a comprehensive multimedia advertising campaign that included outdoor billboards,
television commercials, radio spots, newsprint, a Web site, brochures, and collateral materials. The
advertising campaign prominently displayed the ENERGY STAR mark and achieved a combined
program reach of 96% with a frequency of 53.2x. This meant that 96% of the target audience saw
any of the media components at least 53 times during the campaign. Over 30 builders participated
with many of these builders featuring the mark in most of their own advertising.
Sponsoring a variety of promotions, including the Greater Houston Builders Association New Home
Show, the Texas Home and Garden Show, the Houston Home Show, and the CenterPoint ENERGY
STAR Golf Tournament.
Leveraging EPA's Outstanding Achievement Awards as a major event to provide recognition for
builder partners. Per a special agreement with EPA, each year the plaques for Houston builders are
provided directly to CenterPoint who distributes them at a special ENERGY STAR Awards Luncheon
to their builder partners. This event provides builders with added recognition, a great dining
experience at a prestigious local restaurant, and effective messaging about ENERGY STAR for New
Homes.
Results:
As consumer awareness of ENERGY STAR for New Homes increased and stimulated consumer
preference, Texas homebuilders felt compelled to build ENERGY STAR qualified homes in order to
remain competitive. This has resulted in the perception that ENERGY STAR qualification is a "must-
have" feature for consumers in the Houston market.
Not only did CenterPoint increase the number of qualified new homes (and their corresponding
energy reductions), but they also were able to decrease their builder incentives because of this
market transformation. Within three years, incentives were reduced by two-thirds while the annual
delivery of qualified homes increased.
In 2006, regulatory changes and a faltering housing market led CenterPoint to expect that half of the
builders would drop out of the program in 2007. Instead, their five years of effort in marketing and
implementation made the ENERGY STAR mark a valuable asset and resulted in such high consumer
demand that over 90 percent of builders stayed in the program and qualified over 20,000 new homes
as ENERGY STAR. Thus, successful marketing and implementation initiatives helped improve
stability during changing market conditions and allowed CenterPoint to meet annual program goals.
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Northwest Energy Efficiency Alliance (NEEA) and Energy Trust of Oregon
Background:
The utilities in the Pacific Northwest had promoted ENERGY STAR qualified products very effectively for
a number of years, achieving a high level of consumer awareness. During this same time, key states had
implemented very rigorous energy codes and large metropolitan areas were using strong residential-
development zoning laws to limit suburban sprawl.
Key Barriers Targeted:
Lack of Consumer Demand
Although the ENERGY STAR brand for products was well established in the Pacific Northwest, qualified
homes were new to homebuyers. Moreover, there were regional green building programs competing for
homebuyer interest.
Industry Resistance to Change
Program designers anticipated it would be very hard to engage the homebuilding industry in a rigorous
energy efficiency program while they were already addressing stringent energy codes and land-
development issues.
Marketing and Implementation Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, NEEA's Marketing and Implementation Strategy included:
A broad marketing strategy that engaged builders, developers, and home-performance specialists
(e.g., home energy raters), and also targeted other building industry allies (e.g., local green building
groups, home builder associations, real estate agents, HVAC contractors).
Initiating a cooperative-advertising program with builders, developers, and home-performance
specialists that allowed ENERGY STAR partners to combine their advertising budgets to more
effectively increase consumer awareness of ENERGY STAR.
Designing ENERGY STAR advertisements that featured program partners and developed a local
ENERGY STAR Homes Web site.
Offering marketing incentives and additional promotional assistance to designated "champion
builders" who could leverage the greatest market presence.
Providing sales and business development training to raters to support builder recruitment.
Partnering with local green building groups to co-brand marketing materials and sponsor training and
workshops to help industry professionals network.
Offering continuing-education classes to real estate agents, and adding ENERGY STAR qualification
as a searchable feature for online listings.
Collaborating with HVAC suppliers, distributors, and contractors to develop ways to increase sales of
energy-efficient systems.
Continually developing new technical and marketing opportunities for all stakeholders to generate
increased demand for ENERGY STAR qualified homes.
Results:
After a predicted slow start to overcome market barriers, effective implementation led to 2,300 homes
qualified in 2006, which was a 132-percent increase from the number of homes qualified in 2005.
About 237 builders were active in the program by the end of 2006.
More than 30 verifiers and 65 raters were added to the network in 2006 after attending regional trade-
ally training.
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Appalachian State University (ASU) Energy Center - North Carolina
Background:
ENERGY STAR for New Homes was experiencing steady but very slow growth in North Carolina for
several years without a strong sponsor or utility program and limited HERS infrastructure.
Key Barrier Targeted:
Industry Resistance to Change
The North Carolina State Energy Office wanted to maximize very limited resources to increase the state's
homebuilding industry interest in ENERGY STAR qualified homes.
Marketing and Implementation Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, the North Carolina Marketing and Implementation Strategy included:
Organizing a well-attended conference with great technical and marketing information for builders to
effectively use limited funds to jumpstart interest in ENERGY STAR.
o The State Energy Office hired the ASU Energy Center to implement an ENERGY STAR
Homes Conference, an annual state-wide summit. The goal of the conference was to
encourage networking within the building industry, educate stakeholders on topics related to
ENERGY STAR for New Homes, and ultimately help motivate the building industry to
increase the number of ENERGY STAR qualified homes in North Carolina.
o Developing breakout sessions during the conference featuring relevant hot topics in the
industry along with ample time for networking. Participants enjoyed exploring the
conference's exhibits, taking advantage of opportunities to take certification tests, and
meeting obligations for continuing education credits.
o Incorporating well-known speakers and an easy-to-access, premiere location were
established as important metrics for continual improvement of the ENERGY STAR
conference.
o Marketing the conference with proven low-cost techniques including blogs, e-mails, and
newsletters.
o Attracting conference sponsor funding by offering passes, exhibition space, and recognition.
Results:
Since its inauguration in 2005, the annual conference has attracted attendees from every arena of the
homebuilding industry, including builders, architects, engineers, HERS raters, product
representatives, researchers, appraisers, mechanical contractors, real estate agents, home
inspectors, building code officials, and utility representatives.
The conference's diverse programming and comprehensive appeal have led to increased attendance
in the first two years. As a result of this success, the ASU Energy Center plans to expand the
conference in the future to feature more ENERGY STAR programs, such as commercial construction.
Most importantly, the growth rate of ENERGY STAR qualified homes across North Carolina has
increased dramatically.
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Rocky Mountain Power - Salt Lake City. Utah
Background:
In 2005, Rocky Mountain Power's goal was to transform the building industry in the state of Utah. Market
research indicated that the homebuilding industry in Utah was lagging behind other neighboring
Northwestern states in applying building-science construction practices, particularly energy-efficient
HVAC installation and equipment and thermal-bypass air-barrier details. This was in spite of a climate
with very cold winters and hot summers that makes energy-efficient homes highly cost-effective.
Key Barriers Targeted:
Local Industry Resistance to Change
Local homebuilders were highly resistant to adopting energy-efficient building practices.
Lack of Technical Infrastructure
Local builders and subcontractors were not trained to meet the technical requirements of ENERGY STAR
for New Homes.
Marketing and Implementation Strategy:
Based on the knowledge gained through market research and targeting key regional barriers to builder
participation, Rocky Mountain Power's Marketing and Implementation Strategy included:
Communicating the benefits of the program (e.g., rebates) and the link between improved building
practices and bottom-line profits to builders. The resulting program strategy emphasized a high level
of communication, hands-on interaction (e.g., marketing and technical support) and relationship-
building with builders.
Implementing early, ongoing, and intensive training for builders and subcontractors, including training
HVAC contractors on tight-duct construction and training builders on the ENERGY STAR Thermal
Bypass Checklist.
Offering free registration for training, food, continuing education credits, and national expert speakers
whenever possible.
Results:
Rocky Mountain Power's recruiting efforts based on effective training and communication were so
successful that program participation outgrew the local HERS infrastructure and required additional
efforts to attract new HERS raters to the Utah market. This growth led to a tenfold increase in
ENERGY STAR qualified new homes in Utah within two years.
As builder participation increased, Rocky Mountain Power turned to educating the public and offering
cooperative-marketing opportunities.
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Module 3: Program Evaluation
3.1. Introduction
By incorporating evaluation practices into the Program Design
phase and putting tracking systems in place as soon as
implementation starts, sponsors and utilities will have critical
data needed to assess whether goals (e.g., actual energy
savings, peak-demand reduction) are met and to facilitate
continuous improvement in program elements like incentives, the
home verification process, training, and marketing strategies.
This will allow sponsors to demonstrate critical performance
metrics to regulators, and to rebalance program investments to
optimize future returns.
3.2. Program Evaluation Lessons Learned
Key lessons learned from successful program sponsors concerning Program Evaluation include:
Effective use of limited resources for evaluation requires discipline.
QA/QC of the home energy rating process is necessary to reinforce industry oversight.
Incorporate corrective action processes for nonconformance.
3.2.1 Effective use of limited resources for evaluation requires discipline.
In developing Program Evaluation plans, it often is tempting to want to collect data on a wide variety of
areas related to program implementation, market research, quality assurance, technology diffusion, and
customer satisfaction. With limited resources, collecting data on all of these elements may not be
possible. As a result, one of the first planning tasks should be to distinguish between what the program
staff needs to know versus what it would like to know. This can help to ensure that adequate funds and
staff resources are available to evaluate the most critical components needed to meet regulatory
requirements and secure feedback for continuous improvement. Similarly, it is important to determine the
appropriate sample size needed to ensure reliable results, rather than arbitrarily seeking as large a
sample as possible, thereby wasting resources. Sponsors can also save significant resources by
accepting lower accuracy for less important program metrics.
3.2.2 QA/QC of the home energy rating process is necessary to reinforce industry oversight.
Because program success is so dependent on homes consistently meeting technical specifications,
quality assurance oversight for building and rating practices is a very important evaluation component. In
particular, this serves as an important additional layer of oversight beyond the quality assurance activities
provided by the rating industry. Sponsors and utilities may want to consider purchasing an infrared
camera for this purpose so that low-cost diagnostics can be performed on homes in the field.
3.2.3 Incorporate corrective action processes for nonconformance.
Evaluation efforts are likely to uncover some nonconformance, even with the best programs. Sponsors
should engage in advanced planning to develop formal policies for resolving nonconformance issues
uncovered during evaluation. This includes setting up procedures to diagnose whether problems are
isolated or systemic, as well as to implement corrective action where systemic problems are identified.
These procedures should not be punitive, but developed as constructive guidance for builders to ensure
future compliance, protect the integrity of the program and desired goals, and continue providing valued
services to builder partners.
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3.3. Program Evaluation Best Practices
Based on the lessons learned from program sponsors, best-practice recommendations identified for
Program Evaluation are provided in Table 5. 'Establishing baseline energy costs' was cited most
frequently by meeting participants as a high-priority Program Evaluation component.
Table 5. Program Evaluation Best Practices
1. High Cost
Establish baseline energy costs with utility billing analysis
Evaluate energy savings with utility billing analysis
Evaluate actual peak-demand reduction
2. Lack of Consumer
Demand
Conduct customer surveys
Measure impact of all marketing efforts
Monitor frequency of and types of complaints
3. Lack of Sales Skills
Monitor effectiveness of all sales training
Monitor effectiveness of sales/marketing tools
4. Industry Resistance
to Change
Track program data (e.g., core metrics)
Conduct builder surveys to measure satisfaction and identify most useful
tools
5. Lack of Technical
Infrastructure
Evaluate integrity of the HERS process
Evaluate delivery of key technical measures (e.g., tight ducts, Thermal
Bypass Checklist)
3.4. Success Stories
Nevada ENERGY STAR Partners - Las Vegas. Nevada
Background:
In 2001, a diverse group of utility companies, HERS raters, builders, local builder publications and other
stakeholders joined forces to form the "Nevada ENERGY STAR Partners." These partners realized they
could be much more effective as a coordinated group than as individual companies and benefited from a
local housing-marketing consultant willing to lead the group.
Key Barrier Addressed:
Lack of Consumer Demand
Las Vegas was one of the first markets to experience dramatic growth in ENERGY STAR qualified
homes, but they lacked a single program sponsor to coordinate joint marketing. Without a utility driving
the program, evaluation of initial marketing efforts was vital to maintaining partner interest and guiding
best use of limited funds for continued improvement.
Evaluation Strategy:
The initial mission of the group was to develop a marketing campaign for ENERGY STAR that
generated maximum consumer interest through a coordinated set of activities among builders and
other partners. This led to a fully orchestrated and comprehensive marketing campaign combining
advertising, public relations, signage, Web sites, events and seminars.
A related effort focused on recruiting new builder partners to join the Nevada ENERGY STAR
Partners, to help augment their marketing budget.
The steering committee evaluated baseline metrics and program progress since the inception of their
campaign. This included the number of participating builders and business partners, the market for
ENERGY STAR qualified homes, and measured change in brand awareness among consumers.
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Consumer awareness was evaluated by marketing research and interviews at ENERGY STAR model
homes, which illustrated how well ENERGY STAR builder partners and other stakeholders promoted
ENERGY STAR to new prospects.
Results:
Today, this group has a very effective organizational structure headed by a steering committee and
full array of sub-committees (e.g., advertising, public relations, Web-site administration, and technical
and educational support) that have their own responsibilities and track their own goals.
By diligently integrating evaluation with marketing activities, the Nevada ENERGY STAR Partners
have been able to effectively measure their success.
Specific results since the program's inception in 2001 include: an increase in the number of
participating builders from five to 28; an increase in market penetration of ENERGY STAR homes
from 20 percent in 2002 to 67 percent in 2006; and an increase in consumer awareness for ENERGY
STAR qualified homes from approximately 40 percent to over 95 percent.
Evaluation results have proven invaluable to sustaining interest and motivation for this group of
professionals who voluntarily contribute significant efforts to promoting ENERGY STAR.
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California Independently-Owned Utilities
Background:
California's investor-owned utilities, including Pacific Gas & Electric (PG&E), Southern California Edison
(SCE), San Diego Gas & Electric (SDG&E), and Southern California Gas (SoCalGas), joined forces to
provide an integrated ENERGY STAR Homes program throughout California, where code Title-24 was
widely recognized as one of the most rigorous energy codes in the country. State-wide evaluation data
was required to meet the oversight needs of the regulatory commission and ensure participating utilities
were making good financial decisions for their programs.
Key Barriers Addressed:
High Cost
Empirical utility billing data was needed to verify energy savings with ENERGY STAR for New Homes.
Lack of Technical Infrastructure
California utilities needed assurances that the HERS process and energy-efficient technologies were
reliable.
Evaluation Strategy:
The California utilities set out to fulfill the following goals: 1) estimate specific program results; 2) fully
understand how the program results occurred so as to make recommendations for increased
effectiveness; and 3) fulfill state requirements.
To evaluate the performance of an ENERGY STAR qualified home, they measured energy usage
with various types of homes, construction, climates, and fuels. Due to the longevity of build-out time,
the evaluation period occurred over a two-year span. However, this schedule did not support timely
decision-making since the national ENERGY STAR specifications adjusted during the evaluation
period.
The group utilized an integrated model rather than a sequential model. Integrated evaluation occurs
throughout program implementation while sequential evaluation takes place at the end of a distinct
implementation phase.
A complete and accurate tracking system was necessary to evaluate the program effectively. To fully
understand savings, the team analyzed various measures, including energy bills, site-metered energy
consumption, and software modeling, each of which entailed its own advantages and challenges.
Results:
Overall, results showed that homes' energy consumption varies greatly as a result of orientation,
occupant behavior, type of structure, and fuel type. Thus, programs need to define "savings" to
include occupant behavior.
The study's results confirmed the value of the new, more rigorous ENERGY STAR for New Homes
requirements.
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Oncor Electric Delivery - Dallas. Texas
Background:
As a result of Oncor's successful program design and implementation, the local HERS infrastructure grew
from a single company to 16, with over 60,000 homes qualified as ENERGY STAR within Oncor's service
territory. With this growth, Oncor needed to evaluate the quality of the HERS rating process to ensure it
was meeting program goals.
Key Barriers Addressed:
Lack of Technical Infrastructure
Oncor's focus was to evaluate how effectively the HERS infrastructure developed and to ensure homes
met program specifications.
Evaluation Strategy:
The goals of the evaluation were to 1) validate the predicted kW and kWh savings reported to the
Public Utility Commission of Texas (PUCT) based on HERS raters' reports, 2) strengthen the
ENERGY STAR for New Homes brand, and 3) establish the integrity of the HERS rating industry in
their region.
Specific points of evaluation included how closely the raters were following Residential Energy
Services Network (RESNET) standards and confirmation that the homes were meeting the ENERGY
STAR performance specifications.
The methodology for the evaluation involved a large sample of data collected from modeling software
along with third-party, on-site verification of construction practices, testing techniques and building
materials.
After gathering the results of the study, Oncor implemented a corrective action plan that involved
identifying HERS raters found to have the most inconsistencies and working with them to improve
their performance. They also coordinated with the regional HERS association - the Texas Home
Energy Rating Organization (HERO), RESNET, and EPA to educate raters, disseminate best
practices, and resolve discrepancies in the national standards.
Results:
Over the course of three years, results have shown that discrepancies are decreasing and the quality
of HERS ratings is improving. In 2004, it was found that eight percent of homes reported as
ENERGY STAR qualified were not meeting ENERGY STAR specifications. By 2006, this number
dropped to less than two percent.
Oncor has confidence that its program performance results reported to the PUCT are valid. As a
result, it has maintained strong regulatory support for the program.
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Advanced Energy Corporation (AEC) - Phoenix Field Research Study
Background:
A large number of evaluation efforts had demonstrated the HERS verification process delivered
consistent compliance with ENERGY STAR. However, there was a lack of statistically-relevant empirical
data documenting that actual energy savings provided the carbon-reduction benefits promised by
ENERGY STAR.
Key Barriers Addressed:
High Cost
Cash-flow benefits could mitigate high-cost concerns, but were limited primarily to computer-modeling
results and quality-assurance studies of the HERS rating process. An evaluation study based on utility
billing analysis of actual energy savings provided the opportunity to substantiate reduced ownership cost
and carbon savings with ENERGY STAR for New Homes.
Lack of Consumer Demand
More information was needed to verify that energy-efficient homes also deliver the non-energy benefits
promised to consumers in a wide range of marketing materials.
Evaluation Strategy:
Phoenix was chosen to study the performance of ENERGY STAR for New Homes because the
metropolitan area included a large base of qualified homes built to the original ENERGY STAR
specifications.
AEC saw an additional opportunity for evaluation when it was discovered that a substantial population
of homes in this market were certified under a more rigorous building science program beyond
ENERGY STAR called Environments for Living (EFL). This was an important evaluation opportunity
because EFL homes effectively mimicked requirements in the new ENERGY STAR specifications. In
Advanced Energy's study, the EFL homes were referred to as "guaranteed performance" homes
because the heating and cooling consumption, as well as comfort, were guaranteed.
AEC partnered with EPA to evaluate the difference in actual utility bills between homes qualified
under ENERGY STAR and EFL programs versus a comparable set of baseline homes that were 20-
percent more efficient than the 1993 National Model Energy Code (MEC 93).
AEC took advantage of a related opportunity to partner with the US Department of Energy (DOE),
and local utilities (i.e., Arizona Public Service, Southwest Gas) to compare program homeowner
satisfaction to that of the baseline homes using a combination of qualitative and quantitative research.
Results:
The billing analysis study showed that during the cooling season in Phoenix, ENERGY STAR homes
were 16-percent more energy efficient than baseline homes. Since the baseline homes were
already about 20-percent above MEC 93, the ENERGY STAR qualified homes exceeded program
requirements calling for 30-percent greater energy efficiency than MEC 93.
Results also showed that the guaranteed performance homes saved up to 33-percent more energy
than baseline homes. Thus, homes meeting specifications approximating the new ENERGY STAR
requirements had more than twice the empirical energy savings compared to homes meeting old
ENERGY STAR specifications.
Customer survey results showed that, compared to baseline homes, homes meeting old ENERGY
STAR specifications increased homeowner satisfaction about 30 percent while guaranteed
performance homes approximating new ENERGY STAR specifications nearly doubled homeowner
satisfaction. This supported anecdotal findings that consumer satisfaction with a home rests on not
only energy efficiency but also comfort, perceived health, reliability, and economy.
Results from the study have helped EPA promote the value of the new ENERGY STAR for New
Homes program requirements to all stakeholders.
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References arid Sources
The content of this Guide largely references information exchanged
at the 2007 First Annual ENERGY STAR Residential Program
Sponsor and Utility Partner Meeting, as well as more than a decade
of EPA's experience working with and observing state and utility
partner programs. Materials from the meeting, including
presentations, agenda, and compilation of stakeholder feedback are
included in the appendices. In addition to these materials, the
following sources were referenced in the development of this Guide.
"Progress Energy Florida Awards Largest Incentive Yet for
Energy Efficiency in New Housing Construction." CNN
Newswire. July 23, 2007.
"ENERGY STAR New Homes: The Inside Story". DVD. Dist.
PG&E, 2007.
2006 Annual Report. NEEA. July 18, 2007.
EPA Office of Air and Radiation, Climate Protection Partnerships
Division. National Awareness of ENERGY STAR for 2006:
Analysis of 2006 CEE Household Survey. US EPA, 2007.
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Appendices
A. ENERGY STAR Qualified Homes Utility/Sponsor Fact Sheet - ENERGY STAR for New Homes:
A Proven Solution for Reducing Peak Demand and Improving Energy Efficiency in New Homes
B. First Annual ENERGY STAR Residential Program Sponsor and Utility Partner Meeting
a. Agenda
b. Presentations: Program Design
1.
Developing a HERS Infrastructure
2.
Reaching a Dispersed Builder Audience
3.
Incentive Options
4.
Augmenting Builder Skills with Technical Training/Education
Presentations: Marketing and Implementation
1.
Advertising, Promotions, and Awards
2.
Engaging the Market
3.
ENERGY STAR Homes Summit
4.
Builder Seminars/Recruiting
Presentations: Program Evaluation
1.
Quality Control Monitoring/Evaluations
2.
AEC Research Field Study
3.
Outreach Campaign Evaluation
4.
California Utilities Evaluation
e. Priority Ranking Feedback: Best Practices and Lessons Learned
C. WECC Homeowner Manual
D. 2006 North Carolina ENERGY STAR Conference Agenda
ENERGY STAR for New Homes Page 41 October 2007
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