Lighting Programs: Still One of the Most Important Parts of Your Energy Efficiency Portfolio

Tue, 11 Sep 2012 10:57:00 -0600

With EISA compliance beginning and CFL market penetration improving, some utilities have found themselves defending the value of their lighting programs to regulators and CEOs who question the cost effectiveness of including them in a residential portfolio. The following are common questions utilities are hearing, along with key points to help overcome these objections:

WILL EISA DIMINISH THE SAVINGS FROM A LIGHTING PROGRAM TO A POINT WHERE IT IS NO LONGER COST EFFECTIVE?

This is a common misunderstanding. While the savings associated with efficient bulbs (CFLs, LEDs, and 2X) will be reduced as a result of EISA, our analysis shows that lighting will still be on par with appliance recycling as one of the most cost effective residential programs in a portfolio.

ARE LIGHTING PROGRAMS ONLY FOR GENERAL PURPOSE CFLS?

We are entering into the next generation of lighting programs which include LEDs and 2X, both of which are just being introduced into the market. In addition, specialty CFLs carry significantly lower market share relative to general purpose CFL bulbs and need further support. This means lighting programs will become less dependent on general purpose CFLs, and we will see the transition away from them occurring over the next three years. 2013 will focus on introducing the right LED, 2X and specialty bulbs to ensure residential customers have a good experience with the bulbs they use, and in 2014 we project a large percentage increase in LEDs, 2X and specialty bulbs. In 2015 the transition from general purpose CFLs to newer efficient technologies and bulb types will be complete.

DOES THE MARKET NEED AN INCENTIVE?

Price remains the leading consideration in light bulb purchases for consumers, according to a recent Ecova study of over 2,000 customers across three utilities. Additionally, new technologies carry large price premiums that will not allow them to cross the early adopter threshold without incentives. However, they need to be the right incentive levels. Recent analysis by Ecova has helped us understand the price elasticity of both existing and new technologies that help identify how incentives move demand.

ARE LIGHTING PROGRAMS JUST ABOUT INCENTIVES?

The lighting market is going through tremendous change: New laws, new technologies, and new labels with different information. All these changes result in confusion and increase the probability of consumers making inefficient choices until the new lighting options are more familiar. The educational function of lighting programs has become increasingly important, as has choosing the right bulbs to include in the product mix. Comparing lumens and new technologies to what customers understand clearly shows how efficient lighting can meet their needs, while selecting the best-in-class bulbs to incent ensures a positive customer experience with new technologies so utility programs do not make the same mistakes they made with CFLs early on.

In closing, a lighting program will continue to be one of the most cost effective options in a residential portfolio for years to come. The importance of lighting has in fact increased as the next wave of technologies attempt to cross the chasm into the mainstream market and there is rampant consumer confusion. A utility is once again poised to be the trusted advisor to their customers, helping them navigate the endless array of options, making it more affordable to purchase efficient lighting, and saving on their energy bills.

Want to know more about new LED technology? Check out Ecova’s recent Best-in-Class LED Reflector Lamp research.

Energy Efficiency: Engaging the New Energy Consumer

Fri, 31 Aug 2012 09:39:00 -0600

There’s no denying it—we live in a connected world, one that provides increasing opportunities for consumers to engage with companies, and through that engagement, influence its products and services. At the same time, the energy landscape itself is evolving with concerns over climate change, volatile energy prices, and security of supply taking center stage.

Although it may not be initially obvious, the two are connected. An April report from Accenture explores the relationship between energy providers and the ‘new energy consumer’ as it relates to fostering engagement. Given the rapidly evolving marketplace energy providers face, the need to ‘connect’ with the consumer becomes essential, which may require moving beyond the energy-as-a-commodity mindset.

The Accenture report surveyed over 10,000 residential utility consumers in 19 countries to determine values and perceptions related to their electricity providers. Overall, the study found that consumers want products and services that align with their values, including options that encourage energy efficiency and prefer ‘low-touch’ channels for transactional interactions (e.g., online bill pay or signing up for new services), as well as the option to engage through social media.

The study found that more than one-third of the survey respondents “interact or plan to interact with their electricity provider” using social media, while 47 percent would join an online community if it offered energy-related product information or tips on how to reduce energy bills. While these figures may not be overwhelmingly high, they do suggest that interest in social media is growing and that utilities are positioned well to benefit from the interaction. While the onus seems to lie with utilities, the report ultimately concludes that the “energy landscape is increasingly defined by the values and preferences of the new energy consumer.”

This type of consumer engagement amounts to exciting times, as it fosters innovation and moves us further along the energy efficiency continuum. It also positions utilities as a key communication channel regarding energy management. A utility’s ability to use new communication avenues such as social media will be important to furthering the energy dialogue and driving additional savings.

Ecova’s Home Energy Plan initiative is an example of a true partnership between energy consumer and utility, and how an active dialogue between the two encourages the adoption of energy efficiency measures that result in widespread benefits. Still, the Accenture report is a good reminder of the need to maintain an active dialogue and that our options to ‘connect’ are only just beginning.

Energy Efficiency Solutions

Lighting Programs: Still One of the Most Important Parts of Your Energy Efficiency Portfolio

Energy Efficiency: Engaging the New Energy Consumer