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Creative Ways Utilities Are Attracting Customers

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"Creative Ways Utilities Are Attracting Customers"

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by Brendan O’Donnell and Mathias Bell, cross-posted from the Rocky Mountain Institute

This is part three in a three-part series published at RMI on Turbocharging energy efficiency programs.

When you see the blue ENERGY STAR logo plastered on the side of your TV, you probably think of two things:

  • This is an energy-efficient television.
  • The federal government is providing me some assurance that the energy savings are real, the latter being more vague—I know the government is behind this somehow…

What you may not know is that some electric utilities are working hard to increase the number of ENERGY STAR appliances being bought.

Traditional utility energy-efficiency programs, especially those targeting mass-market residential customers, have enticed participation mostly through rebates. If a customer saves the receipt for an appliance and mails it in, the utility will cut a check. The ENERGY STAR product is made cheaper for the customer and the utility gets credit for the energy savings.

But for many customers, rebates are a hassle that require a lot of time and effort. As a result, participation rates fall short, even though buying the ENERGY STAR appliance is the smart choice.

To make things easier for customers, some utilities have wisely begun to work upstream with manufacturers, vendors and retailers. Instead of offering the customer rebates, the utilities are providing incentives to product suppliers to ensure that store shelves are stocked only with ENERGY STAR appliances. One upstream program that we think is particularly effective is the Northeast Energy Efficiency Partnership’s (NEEP) Retail Products Initiative.

NEEP is among the programs examined in Turbocharging Energy Efficiency Programs, a new report from Rocky Mountain Institute that examines the best ways for electrical utilities to boost efficiency.

NEEP is a nonprofit organization that promotes energy efficiency throughout the Northeast and Mid-Atlantic regions. The Retail Products Initiative leverages the cumulative buying power of the region’s homes and businesses. Rather than relying on individual campaigns, NEEP’s utility partners negotiate cooperative promotions of efficient lighting, appliances and services with retailers in seven states. The utilities and retailers agree on “buy-downs,” which decrease the final price seen by the consumer. Cooperation among organizations has made promotions consistent across utility territories and has facilitated effective statewide campaigns in Vermont, Connecticut and Massachusetts.

The results have been impressive. In 2010, more than 4,000 retailers stocked their shelves with ENERGY STAR products as part of the initiative. These retailers sold almost 175,000 efficient appliances, with 60-90 percent of the refrigerators, clothes washers and dishwashers on their shelves carrying ENERGY STAR ratings. Utilities paid $23.3 million to achieve these numbers, and customers will save 5 million MWH throughout the products’ lifetimes, which is the equivalent of energy needed for 450,000 homes for a year.

With aggressive energy-efficiency targets, progressive utilities are finding more creative ways to sell and fund their energy efficiency programs. RMI’s Turbocharging Energy Efficiency Programs highlights innovative utility programs and strategies. These utilities are looking to break the mold and achieve dramatically higher savings from their programs. In this report, we include more information about what makes NEEP’s program so effective and also include information on programs administered by:

  • New York State Energy Research and Development Authority (NYSERDA)
  • Energy Trust of Oregon
  • Pacific Gas and Electric
  • Xcel Energy
  • Palm Desert’s Set to Save

This is the last of three articles to be featured on RMI’s Outlet blog on Turbocharging Energy Efficiency Programs. The first article in the series was written by RMI consultant Mathias Bell and National Resources Defense Council staff scientist Dylan Sullivan. The second article written by analyst Brendan O’Donnell discussed how utilities can achieve higher levels of savings by going broader and deeper.

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