Utilities are going all in on energy efficiency programs for their customers these days, from rebates for efficiency programs, on-bill financing for more capital-intensive upgrades, and even finding ways to integrate the Internet of Things in a way that can make energy savings more convenient and automated. However, this push for utility-based efficiency programs is done while carefully considering the customers. While it's true that the goal is a win-win-- customers get cost effective energy savings while utilities can mitigate the growing demand on their resources-- it's still critical that energy efficiency programs are designed well and financed correctly. Regulators are charged with making sure that the pricing is fair and makes sense, but it's also the role the customers to act as the final market forces involved. If the customers don't choose to participate because the pricing or the structure of the program is undesirable, then the programs won't last long.

That's why it's so important to get customers on board with energy efficiency programs from the early stages. There are a number of strategies to take to ensure this happens:

Talking directly to customers to get feedback-- whether that's in focus groups, surveys, or simply listening through customer service channels

Taking note of what programs have worked for other utilities, particularly in neighboring areas where the geography, demographics, and climate are similar, is a critical way to figure out how to best structure the programs. Why waste time and resources making the same mistakes that others might have already made?

Work in an iterative process-- programs don't have to be rolled out all at once, but rather can come in the form of pilot programs to small subsets of customers. If the pilot is successful, you know you'll be ready to roll out more widely. Conversely, if there are kinks to work out, then the customers in the pilots can let you know so that things go more smoothly for the full roll out.

In the effort to survey how utilities are successfully getting residents on board with new efficiency programs, I came across a few stories of note that I thought were worth sharing. In New jersey, polls recently showed that "an overwhelming majority" of residents of the Garden State support forcing utilities to provide incentives for low-income residents to purchase energy efficiency upgrades to their home. The other side of that poll, though, showed that only 6% of residents would support a surcharge to fight climate change being added to their utility bills, with 45% instead saying residents should pay "a small share or nothing at all." In terms of direct efficiency programs, though, NJ residents said they would be willing to pay an additional 50 cents per month on their electric bill to make homes more energy efficient. That amount is pretty small, and these attitudes are interesting in that they show a desire for increased efficiency (and equity in efficiency), but not any enthusiasm to really pay for it. What can the utilities in New Jersey take away from this? Perhaps the best structure in this situation would be on-bill financing, thus increasing access to efficiency upgrades but not charging other ratepayers for the program, rather than a large scale weatherization bill that would see a few bucks increase in the monthly bill?

Another relevant story comes from Arizona where the Tuscon Electric Power Co. filed a new energy efficiency plan with state regulators in an effort to maintain current levels of rebates for efficiency upgrades through 2020. The current budget for this program is $23 million, which is the funding they think is necessary for the efficiency rebates to continue, as the program is a popular one with the customers. Getting the funding from the state government is one way to attack efficiency programs, as the funds are of course still being paid by the ratepayers in a roundabout way via taxes, but they don't see the direct increase on a utility bill that so many would be put off by. Interestingly, Tuscon Electric Power is also funding part of these programs through demand side management bill surcharges, which average about $3 per household per month, but it seems for residents these charges have already been normalized so they aren't up in arms about those.

The point of all of this is that there are many ways to structure and sell utility energy efficiency programs, and lessons learned across the country should be applied widely in utilities to find the most effective, satisfactory, and affordable methods. What structure and funding method have you found to be the most desirable and effective for your organization?