Following significant population growth and economic prosperity in the last decade, Nevada was hit by the economic downturn with some of the highest rates of foreclosure and unemployment in the country from 2011 to 2014. The state’s unemployment rate was particularly high for home improvement professionals.
To combat these challenges, EnergyFit Nevada (EFN) used $5 million in seed funding from the U.S. Department of Energy's Better Buildings Neighborhood Program to grow the workforce and upgrade homes in the major metropolitan areas of Las Vegas, Henderson, Reno, and Sparks, Nevada. The program’s goals included creating the foundation for a self-sustaining program that would help the state meet its goal to upgrade 5% of all single-family homes in Nevada by 2021.
EFN was a collaboration of nonprofit organizations, municipal governments, and universities. The University of Nevada conducted market research, identified target markets through focus groups and homeowner surveys, engaged financial institutions, and provided job training programs and Building Performance Institute (BPI) certification courses. The City of Las Vegas spearheaded marketing and outreach efforts. EFN provided quality assurance, processed rebate payments, and assisted customers through the program.
EFN also targeted two diverse populations within the state: the Reno and Sparks metropolitan area in northern Nevada and Las Vegas and Henderson metropolitan areas in southern Nevada. Serving these two regions, which are 400 miles apart and have different climates, housing stock, and energy needs, posed a significant challenge. A local presence in each region helped the program offer consistent opportunities and maintain equally high standards for quality assurance, contractor recruitment, training, and marketing. Read more in the EFN final report.
EFN experimented with a combination of financial incentives, marketing techniques, and workforce development to promote home energy upgrades.
- Residential Program Design: At first, EFN employed an energy assessor-based model, where independent assessors were responsible for driving customers to install improvements. Although these energy professionals completed many assessments, with no real incentive or program materials, they did not market the program or encourage customers to continue with upgrades. As a result, conversion rates from sign-up to upgrade under this model were very low. EFN adapted the program to a contractor-based model, which proved to be more successful at driving program participation. Unlike independent assessors, high-volume installation contractors had a stake in encouraging customers to undertake upgrades. EFN also standardized the assessment cost and offered contractors an incentive for submitting paperwork, which allowed EFN to follow up with customers and help them engage in the upgrade process. In this way, the assessment became a tool to feed the program instead of operating as a standalone step, and the conversion rate increased significantly to 38%.
- Marketing and Outreach: To drive consumer demand for home energy upgrades, EFN experimented with different marketing approaches, including internet and social media, as well as more traditional outlets such as direct mail, newspapers, and television. Several municipalities and the State of Nevada declared EnergyFit Nevada days in 2012 and 2013 in celebration of October as ENERGY STAR® month and to encourage residents to participate in the program. The program reached out to major employers, churches, civic organizations, retailers, homeowners associations, and real estate groups. Realizing that homeowners were much more likely to complete upgrade projects through the program if they heard about it from a trusted source, EFN created a referral system whereby residents who were enjoying the benefits of an energy upgrade encouraged their neighbors to get an energy assessment by providing them with a referral card. EFN also put up yard signs at participating homes to promote assessments and upgrades among neighbors. As more homeowners made improvements, interest in the program increased.
- Financing: Access to financing is a common barrier for Nevada residents seeking to undertake energy upgrades. To address this challenge, EFN partnered with local nonprofit Green Chips, the City of Las Vegas, and Nevada State Bank to design a loan program with a low-interest rate of 2.3% for eligible homeowners. In addition, some contractors offered participants in-house financing, where upgrades could be incorporated into mortgages or refinancing. EFN also tested and adapted different strategies for incentives and rebate amounts, and found that a performance-based program structure linking incentives directly to estimated savings correlated to higher participation rates.
- Workforce Development: From spring 2011 to spring 2013, the program offered training and BPI certification. EFN also offered contractors free training in business development, which included bridging the gap between leads and sales; providing heating, ventilation, and air conditioning services under Home Performance with ENERGY STAR; and marketing through social media and website use.
In addition to switching its model from an assessor-based approach to getting contractors to encourage upgrades, lessons EFN learned include the following:
- Invest in building relationships with customers. As the program was driven by customer referrals, putting significant time and resources toward customer service paid off in the long run.
- Use all available marketing channels. Faced with limited funding, EFN spread program awareness through diverse and creative low-cost channels, such as its website, social networking, and earned media, as well as paid advertising. EFN also targeted large employers, churches and civic organizations, retailers, homeowners associations, and real estate groups, and participated in events including farmers markets, art events, and home shows.
- Sweeten the deal for contractors. EFN implemented a Web-based project management system to simplify paperwork, provided training opportunities for contractors who joined a trade ally network, and changed the loan process so contractors could be paid promptly for their work.
- Incentivize contractor training. Initially, EFN provided contractor training in northern Nevada without a means of linking the training to the EFN program. As a result, the training efforts were not helping to build a network or support the program as intended. EFN implemented a training reimbursement component to ensure that newly trained contractors would have an incentive to partner with the program.
EFN continues to actively engage Nevada homeowners, home performance contractors, and other program partners and is making progress toward establishing a sustainable market for energy upgrades.
- EFN staff continue to explore new opportunities to leverage public and private funding sources that will help grow the market for home energy performance in Nevada.
- EFN is considering implementing changes such as hiring an in-house mortgage facilitator, conducting internal staff training and external training with partners such as lenders and realtors, and creating print media for partners to share with customers.