$7 billion later …

by Dec 3, 2014

Lawrence Berkeley National Lab published a study in January of last year which quantified that, as of 2011, utilities were spending a collective total of $6.7 billion annually on customer-funded energy efficiency programs.

“Customer-funded programs” are the ones where utility customers are charged a small monthly fee on their utility bills, and all that money goes into a $6.7 billion pot that gets used for rebate programs to encourage people to buy more efficient products. Given that the cost of building new power generation starts at about $1,000,000 per megawatt (for the cheapest fuel sources),

and, according to the EIA, we built out 13,506 megawatts of power in 2013 (so we spent north of $13.5 billion), the notion of spending $7 billion/year to get people to actually use less energy, thereby eliminating the need for some of that new generation in the future, makes sense.

There’s just one tiny problem: most Americans have absolutely no clue these utility efficiency programs exist.

This year’s recently released Energy Pulse study revealed that only 20% of Americans knew their utility offered rebates, cash incentives or low-interest loans for energy-efficient products or home improvements, and only 41% knew their utility offered information on products and habits to improve a home’s efficiency.

How can that be? How can we be spending nearly $7 billion a year and not be making a bigger dent in the public consciousness? Three reasons:

  • We use language that doesn’t resonate or make sense. In the utility efficiency arena, most advertising loudly promises that you’ll “save money” if you engage with their programs. But our Energy Pulse study reveals every year that a majority of Americans report their utility bills are going up, not down, despite the things they do to make their homes more efficient. So it’s a message that’s not believable and, therefore, not committed to memory. We also throw around a lot of jargon the average American doesn’t understand. According to this year’s Energy Pulse study, even seemingly basic terms like HVAC are simply not correctly, confidently understood by 76% of the population. If they don’t understand what we’re talking about, they can’t engage, mentally or financially.
  • We keep trying to “educate the market,” instead of trying to engage the market. When we frame our marketing as “education,” it gets really boring, really fast. And a boring message is also one people never really see.
  • We keep advertising the drill bit. There’s an old adage in the marketing world: “Nobody wants to buy a ¾-inch drill bit; they want to buy a ¾-inch hole.” But we scream about the availability of programs (the drill bit) instead of promising the benefits of comfort, control, peace of mind, better health and resale value (the hole).

So if we want to get some mindshare for the $7 billion we’re spending (and it is, in fact, your money) we need to engage, delight, promise the benefits people care about and talk in human language. If all utilities and their program implementers start doing that, we’ll all be more engaged, and we’ll all see a little more return on our investment.

Dig into these insights further via our latest Energy Pulse report by clicking here.

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About the Author

Suzanne Shelton

Where Suzanne sees opportunity, you can bet results will follow. Drawing on her extensive knowledge of both the advertising world and the energy and environment arena, Suzanne provides unparalleled strategic insights to our clients and to audiences around North America. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz, and she speaks at around 20 conferences a year, including Sustainable Brands, Fortune Brainstorm E and Green Build.

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