According to Lawrence Berkeley National Lab, utilities spent $6.9 billion in 2012 on rebate programs – all designed to nudge Americans to make energy efficiency (EE) upgrades to their homes and adopt EE behaviors. From our years of marketing such programs, we’d say roughly 5 percent of that total went toward sales and marketing efforts – so $350 million.
Again, from our experience and observations, the vast majority of that $350 million has been used to convince Americans they’ll save money by being energy efficient. The problem is this: They don’t believe it.
In fact, they have such disbelief that they don’t even pay attention to the message. After all that spending, 67 percent of Americans are still unaware that utility rebate programs even exist. We could fault the lack of creativity of the message, and certainly that’s a problem in many cases. But as the authors of Influencer point out, there are two conditions required to create change (and being energy efficient is a behavior change):
- A belief that I can actually do the thing being asked of me
- A belief that it’s worth it
Our challenge in the EE world is belief #2. Our most recent Energy Pulse study revealed that “improving resale value” is a key driver for homeowners to make improvements to their homes. Energy Pulse also revealed that this would be a great message to get homeowners to make EE improvements … but today, most homeowners DON’T believe it’s true.
The real estate industry has done an excellent job of pounding into the collective consciousness that we’ll all improve resale value by upgrading the look of our kitchens and bathrooms. The industry simply has not done a good job of pounding into the collective consciousness that we’ll all improve resale value by upgrading the energy efficiency of our homes. And that is, in fact, true.
A recent California Berkeley/UCLA study of 1.6 million home transactions found that green labeling improved selling price. Controlling for all other factors, such as location, school district, crime rate, time period of sale, views and amenities, researchers found that the 4,321 homes sold with ENERGY STAR, LEED or GreenPoint rated labels commanded an average price premium of 9 percent.
Americans are not clued in to this juicy fact. Nor are they considering how the lack of EE improvements could perhaps screw up a sale. Follow our logic here: According to HanleyWood’s Housing Continuum Study, more than 70 percent of people who purchased existing homes knew they were going to do some remodeling to the home and, in fact, knew what they were going to remodel before they even closed on it. But the basics like HVAC and water heater upgrades or added insulation are NOT what new homeowners want to spend their money on. Most people don’t want to spend their initial remodeling budget on energy-efficient improvements … they want to spend it on the pretty things that make their house feel like their home.
So as we move into 2014, let’s start spending that big pile of EE marketing dollars on convincing Americans that they’ll increase the resale value of their homes AND they’ll avoid screwing up a sale. Those are two really compelling reasons to believe energy efficiency is worth it.