The consumer case for the Home Star program

The House and Senate are in the process of discussing the merits of the proposed Home Star program (also known as Cash for Caulkers).  The program essentially offers to cover half the cost of energy efficient home improvements, ranging from adding insulation and air sealing to upgrading HVAC units and water heaters.  Lots of terrific statistics have been floated about the benefits of this program to the beleaguered building industry (which sits at 24.7% unemployment), but perhaps not enough has been said about why this is a really motivating thing for consumers, and why they’ll be interested.

Here’s the scoop:

• Our Energy Pulse study has shown us two years in a row that consumers feel like they’d have to see their monthly utility bills go up, on average, $129/month (a 70% increase) before they’d feel compelled to make energy efficient home improvements.

• Thus, though we see a high desire on the part of consumers to make EE home improvements the reality is low.  Our projections, based on five years of tracking consumer intentions vs. actual actions, is that only 6% of the population is currently very likely to install extra insulation anytime soon, and only 8% are very likely to upgrade their HVAC unit.

• The single biggest concern amongst consumers, even green leaning ones, right now is the economy.

• Our Fall 2009 Energy Pulse study also reveals that, given the choice of spending $10,000 on aesthetic home improvements vs. EE home improvements, consumers will go with the granite countertops most of the time.  Pretty trumps efficient.

The story here is that most consumers simply don’t feel enough utility bill pressure right now to sink a bunch of money into energy efficient home improvements.  And they’re afraid to spend money on anything for fear they might need it later.  If they had the extra money to spend on home improvement (so for upper middle class consumers), they’d spend it on aesthetic improvements.  Thus, Home Star is a game changer.  It creates a Limited Time Offer for consumers to get some upgrades made for half the price they’d normally pay.  And it changes a consumer’s inclination to put off improvements, and forces consumers to consider re-prioritizing EE improvements over aesthetic ones.

Half Price is a compelling message.  And, make no polyanna bones about it, that offer alone will not make us all rush out and add insulation to our homes.  The end consumer benefit MUST still be marketed (i..e. increased comfort, feeling smart, etc.).  But it gives us marketers a really compelling starting point.  Those of us who do this for a living can take a Half Price offer and make advertising hay with that, ultimately moving consumers forward.

So, on behalf of the energy efficient home product manufacturers in America, I hope this legislation passes.  And I hope our elected officials have enough sense to also budget some marketing dollars along with the rebate money.  If both of those pieces are approved, we should see actual market transformation.

Home Star, then, is a game changer.