Marketing Solar Water Heating: Innovative Methods To Heat Up Consumer and Contractor Interest
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1 Marketing Solar Water Heating: Innovative Methods To Heat Up Consumer and Contractor Interest Alice Appleton ACEEE Hot Water Forum May 13, ICF International. All rights reserved.
2 Agenda Oncor s SWH Program Barriers to market engagement Solutions for growing the market Results 2
3 Oncor s SWH Program Oncor launched SWH incentive in 2009 to reduce demand and consumption; ICF implements Program 1 OG-300 system reduces peak demand by.42 kw in Oncor territory 1 OG-300 system reduces annual consumption by ~ kwh Incentive is for Oncor customers (all sectors) Participating installer is Program point of contact Existing buildings must use electric water heating; new construction requirements vary Incentive levels based on predicted system performance (kw and kwh savings) no cap ~$1,700-$2,500 for residential systems (OG-300 systems) ~$2,000-$4,000 for non-residential systems (with OG-100 collectors) 3
4 Barriers to Market Engagement High installed costs ($4,500-$9,000 for OG-300 systems), with no state incentives Recession drop in WTP and new construction Limited implementation budget Minimal consumer awareness/interest Water heaters are crisis purchase Consumers are excited about solar PV Many consumers don t realize that a second solar technology is available to them 4
5 Barriers, cont. Minimal workforce involvement Installers and training opportunities concentrated in Austin Installers concentrate on PV or general plumbing; SWH is 10% of business they work to make a sale, not to make a SWH sale Crucial data not available Location of all-electric communities Location of Oncor s territory past the zip-code level 5
6 ICF Task How can the Program motivate installers to focus on the sale of qualifying SWH systems to qualifying target customers? Approach consumers through direct marketing efforts Approach manufacturers and other contractors to create a network of interested businesses Approach installers with sales and marketing assistance including geo-marketing techniques 6
7 Solutions for Growing the Market: Direct Marketing Online advertising Radio reads Grassroots marketing No direct mail 7
8 Solutions for Growing the Market Manufacturer engagement Overlapping goals and relationships with installers another contact to encourage installer engagement Program cross pollination ICF implements Oncor s ENERGY STAR Homes, Home Performance with ENERGY STAR, and HVAC Programs Cross market programs to consumers and contractors Facilitate networking among contractors Sales & marketing assistance to installers Program marketing collateral Distribution of customer leads Marketing Guide 8
9 Solutions for Growing the Market: Geo-Marketing Techniques Focusing sales and marketing efforts on the geographic areas that contain high concentrations of the target demographic Using available tools to identify these areas up front and save time and money in the field The concept is not new to Oncor s markets, but the execution is 9
10 A free online search engine which presents demographic data from various sources (e.g., U.S. census) at the neighborhood and zip-code level A powerful tool for creating a shortlist of target neighborhoods Ultimately, nothing replaces a neighborhood visit before investing marketing dollars 10
11 Relevant Demographic Metrics Age distribution for residents, homes, and neighborhoods Percent rented vs. owned Percent single family vs. multifamily Home value (market vs. taxable) Heating fuels Household income and education Number of occupants per home and marital status Unemployment data trying to build a typical Solar Water Heating client 11
12 Defining the Target Customer Established Variables: Homeowner High utility bills/energy consumption/hot water usage Electric water heating Environmentally aware House built since the 1980s Assumed Variables: Home value of at least ~ $170K Household income of at least ~ $60K Older customer with sufficient disposable income 12
13 Example: Compare with (both Arlington, TX) ,000 people 8,600 SF Homes Largest % homes built 1960 s 60/40 electric/gas HH Income ~ $30K Mean Home Price ~ $80K ,000 people 12,640 SF Homes Largest % homes built 1980 s 77/23 electric/gas HH Income ~ $66K Mean Home Price ~ $167K 13
14 Results Sample of Participating Installers A: SWH installer B: General plumber C: General contractor D: PV contractor E: General contractor F: Austin-based SWH contractor SWH as % of Historical Business Oncor 2010 Projected 60% % % % n/a % YTD Oncor
15 Results Installer A: SWH Installer Created short list of target neighborhoods using geomarketing techniques Attended events within those neighborhoods Posted door hangers Hired sales team for door-to-door sales 2010 projected is 3x 2008 actual 2010 YTD actual is 2x 2009 actual SWH as % of Historical Business Oncor 2010 Projected 60% YTD Oncor 15
16 Results Installer B: General Plumber Created short list of target neighborhoods using geomarketing techniques Attended events within those neighborhoods Became the only certified green plumber in North Texas Currently hiring to grow SWH business With the Program, built major service offering from 0 installs in projected has already been exceeded SWH as % of Historical Business Oncor 2010 Projected 10% YTD Oncor 16
17 Customer Profile Database So who buys? Crucial to collect data during end-to-end sales process Validate/refine target customer assumptions Rework short list of target neighborhoods ICF is building a database for all of its utility programs Plan to share database with active installers 17
18 Thanks! Alice Appleton www ICF International. All rights reserved.
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