Understanding The Home Upgrade Market

  

Business ventures are now catalysing market actors to capture a share of the $150 billion market for energy performance improvements (which would have even greater potential if the energy savings captured from efficiency measures could then be sold into energy markets like electricity). Despite some gains over the past few decades, empirical evidence indicates it is difficult to achieve significant energy performance improvements in the U.S. residential sector. It turns out that the supposed low hanging fruit of climate change mitigation energy efficiency is not so low because it necessitates multiple actions among the approximately 51 million single family homeowners in America alone, concurrently encounter a disaggregated and uncoordinated market for home energy upgrades. As a result, energy upgrades do not seem worth the effort to homeowners, and solution providers do not appear to offer products or services that homeowners like.

Standing in parallel with the meager uptake of energy performance improvements is the fact that consumers increasingly want a constellation of changes to their homes such as greater comfort, health, connectivity, renewable power, and affordability that energy performance improvements can fully deliver. The bridge that energy upgrades could provide connecting the current (underwhelming) performance of U.S. homes with what Americans want from their homes appears, however, to be an unknown or insufficiently inspiring narrative to most homeowners. 

According to our survey there is a disconnect between what programs market and deliver, and what people think they need, to create value in their homes. It’s up to us to develop new and innovative programs that are so attractive and beneficial to homeowners that they are drawn to something they never before knew they wanted or needed. 

 

Roadblocks exist that prevent homeowners from both taking the first step to cross this bridge and from completing the journey. A homeowner might dismiss the investment immediately due to being unaware of the multiple benefits of energy upgrades, an absence of norms that make high performance a standard expectation, a belief that enough has been done already to improve home energy performance, or a general dissatisfaction with the range of products available in the market today. Alternatively, a homeowner might want to make the investment, but then not complete the process due to a lack of readily available financing, multiple decision-making points (which each contain their own complexities), or underprepared local contractors. Today, a homeowner has to interact with every person in this room to perform an energy upgrade. It has to be easier to give people what they want and it’s up to us to strip out the confusion.Many factors therefore limit the uptake of energy performance improvements both before and after a homeowner makes a decision to proceed with an investment in energy upgrades undermining the broader uptake of energy performance improvements nationwide. Strong attendee engagement at the Residential Energy+ Workshop showed that the most powerful market actors agreed we cannot keep doing the same thing and expect different results. We have many of the pieces we need to make a relevant home energy upgrade industry, but we suffer from the inability to get players to play together. Collaborative and organized efforts are needed to get us unstuck, and define where we next go and how we create success.

  

To identify and coordinate near and long-term opportunities for impactful market interventions aimed at motivating, simplifying, and monetizing homeowner investments in energy upgrades, several projects are pitched for collaborative, market-based interventions, receiving firm commitments to provide data, time, funds, or expertise from diverse industry representatives with the will and the means to bring ideas to impact.

Now the real work begins. Over the coming years industry leaders should continue to  rapidly test ideas, pursue “quick wins,” and refine solutions generated by continuing to work directly with market actors. Exciting opportunities to unlock the residential market and catalyze tangible efforts can help consumers to make their homes more comfortable, healthier, smarter, renewably-powered, affordable, and an overall better place to live.  Overall what will continue to drive us forward is collaboration and good old-fashioned competition. The sustainable upgrade sector needs to continue their efforts to reach their goals to have  some real teeth to solve the home energy challenge.

Reference – RMI 

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s