2004/2005 Single Family Energy Efficiency Rebate Program Evaluation * Findings and Recommendations *

1. 2004/2005 Single Family Energy Efficiency Rebate Program Evaluation* Findings and Recommendations * October CALMAC Meeting October 17, 2007 Contact Info Amy C. BuegeItron1111 Broadway, Suite 1800Oakland, California 94607510-844-2800amy.buege@itron.com Contact Info Christopher Dyson KEMA Inc. 122 W. Washington Ave., Suite 1000 Madison, WI 53703cdyson@kema.com

2. Lighting

3. Lighting Findings • Market Characteristics • CF product availability expanded substantially in last few years. • CFL market shares have increased steadily over last decade. • Consumer awareness of CFLs and CF fixtures has increased substantially in past several years. • 95% of general population aware of CFLs • Nearly a third of the population aware of CF fixtures • The average CFL purchaser household in CA has 7 CFLs installed (out of 41 sockets). • Nearly 60% of CFL purchasers are storing CFLs.

4. Lighting Findings • Market Barriers • CFL product quality continues to be concern for suppliers/consumers. • Many barriers to CFL purchase and installation continue to exist, no one barrier is dominant. • CFL brightness or price concerns (especially for specialty bulbs). • Both CFLs & incandescent in storage / waiting for bulbs to burn out. • Grocery store purchasers are price sensitive. • Most consumers unaware of specialty bulbs.

5. Lighting Findings • Program Design • More than 90% of incentives in ‘04/05 were manufacturer buydowns, rest point-of-sale rebates. • Easier for retailers, more value for consumers • Program incentives tied to lumens versus watt, consistent with national ENERGY STAR program. • Program Publicity • Program provided limited direct marketing support to participating lighting suppliers. • Suppliers preferred more rebate $$ and doing their own advertising. • Small retailers were less satisfied with this approach. • In-store CFL promotions have an impact on CFL purchases • One-third of consumers learned about CFLs from in-store displays.

6. Lighting Findings • Lighting Impacts • Gross impacts calculated based on consumer lighting on-site surveys (with random sample of 2004/2005 CFL purchasers). • Gross realization rate of 64% for kWh and 30% for kW savings. • 76% installation rate • Average hours of use estimated at 2.6 hours (vs. 3.5 ex ante) • Peak usage estimated at 7% (vs. 20% ex ante) • Net to gross ratio calculated based on participating supplier in-depth interviews combined with program tracking data. • Overall NTGR of 62% (i.e., 38% free-ridership) • Big box and home improvement stores – 66 to 75% free-ridership • Drug and small hardware stores – 42 to 51% free-ridership • Grocery and discount stores – 3 to 16% free-ridership • Net realization rate of 47% for kWh and 23% for kW savings. • 2 EULs will be used for lifetime savings estimates.

7. Lighting Recommendations • Direct incentives of low-wattage CFLs to channels where they are most needed in order to minimize free-ridership: • Reduce or eliminate rebates in big box and large DIY stores. • Increase incentive levels in grocery, drug and discount stores, where very low free-ridership exists and purchasers are very price-sensitive. • Give preferential incentive allocations to these stores that pledge to stock products year-round. • Increase efforts to raise consumer awareness and acceptance of specialty CFLs by: • Continuing to rebate specialty CFLs, ES torchieres and hard-wired fixtures. • Increasing incentive levels for specialty CFLs. • Increasing education and awareness efforts that focus on specialty CFLs. • Supporting quality testing for specialty CFLs.

8. Lighting Recommendations • Increase CFL installations among CFL purchaser households by: • Limiting the sale of promotional CFLs in multi-packs to keep installation rate from declining and to capture energy savings impacts sooner. • Encouraging consumers to replace working incandescent bulbs now rather than waiting for them to burn out. • Increasing Program focus on specialty CFLs to expand CFL installations. • Engage lighting manufacturers in collaborative working group process to find agreement on: • Uniform ways to provide CFL purchasers with disposal information. • Uniform ways to described mercury risk on product labeling. • Strategies for increasing CFL recycling rates.

9. Lighting Recommendations • Direct efforts to overcome issues regarding consumer perceptions of CFL quality and performance by: • Offering consumer education regarding improvements in CFL technology. • Ensuring specialty CFLs perform well to ensure acceptance by early adopters. • Continuing Program focus on lumen equivalence to help ensure consumers select appropriate CFL to incandescent wattage. • Consider offering marketing support to smaller retailers, and/or encouraging manufacturers who serve them to provide promotional materials. • Continue to collect and make available to evaluators complete and detailed tracking data for NTG assessments.

10. Lighting Recommendations • Continue to emphasize manufacturer buydowns over POS rebates since consumers and the Program get more value per dollar spent. • POS rebates may be offered for strategic reasons, e.g., recruiting retailers who are unlikely to participate via the manufacturer buydown. • Continue to calculate free-ridership and spillover using Supplier self-report approach. • This method generated defensible NTG ratio estimates by retail channel and product type and was preferable to attempting to estimate these rates from customer interviews. • Encourage participating suppliers to respond to evaluator requests for surveys and continue to collect and provide current supplier contact information.

11. Lighting Recommendations • Update Program per unit savings parameters to reflect installation rates of 76%, operating hours of 2.6 hours per day and peak usage of 7%. • Low electricity and demand savings for lighting measures were realized (64% of gross electricity, 30% of claimed gross demand savings). • Gross RR below 100% for most CF bulb categories due to lower evaluation-estimated operating hours and installation rate as compared to Program assumptions.

12. Non-Lighting

13. Non-Lighting Findings • Market Characteristics • California consumers rate themselves as fairly knowledgeable about conservation and EE – down since energy crisis • FYP Awareness continues to be high (52% aware, 37% took action) • Program Influence and Participant Satisfaction • Contractors have high level of influence on consumers decision to purchase EE equipment • 40% reported they were very influential, double that of other influences • Majority of Program participants (consumer and supply-side market actors) were satisfied with Program • Most satisfied with Program, equipment and contractor • Least satisfied with rebate turnaround time and bill savings • Appliance dealers and HVAC contractors believe Program needs to improve communications regarding changes

14. Non-Lighting Findings • Program Design • CA IOUs doing good job of promoting VSDs in residential CAC • 2/3 of HVAC contractors report Program has encouraged greater use of VSDs • Greatest barrier to expanding use of VSDs remains initial cost • HVAC contractors, pool retailers/contractors felt Program needs to increase rebate levels • Reported multi-speed pump rebate too low to encourage participation • Program has increased POS rebates for some measures • Reduces program administration costs and expands participation but may increase FR • Appliance dealers believe Program staff need to do more to enroll them in POS process • Program Publicity • Program has recently prioritized incentives over marketing • Main channels of awareness were utility mass marketing, retail salespeople/POS materials and contractors • More customers report getting rebate applications on-line • HVAC contractors and Pool retailers/contractors have low satisfaction with Program marketing • Retailers miss Program staff visits • Contractors would like more direct consumer marketing

15. Non-Lighting Findings • Program Impacts • Onsite audits found 97% of HEER measures were installed and qualifying • Non-lighting measures achieved roughly half of goals • 52% of net kWh, 49% of net kW and 46% of net Therm goals • Gross RR of 71% for kWh, 68% for kW and 46% for Therms • Overall NTGR of 62% for kWh and 65% for Therms • Net RR of 52% for kWh, 51% for kW and 37% for Therm savings

16. Non-Lighting Findings • Measure Level Impact Findings • Central ACs made up 8% and 17% of net kWh and kW savings • High estimated gross savings based on Eng analysis (exceeded estimates by 10-36%) • Insulation savings heavily weighted to SCG (78% kWh, 70% Therm savings) • SCG claimed per unit kWh and Therm savings 3.5x and 2.5x larger than other utilities -- Billing analysis found 55% of kWh and 23% of Therm savings • Clothes Washers accounted for 33% of net Program Therm savings • Engineering models found only 65% of the ex ante Therm savings • Discrete choice analysis estimated 19% FR for clothes washers • Pool Pumps made up ~17% of net Program kWh and kW savings and had Gross RR of 48% (kWh), 33% (kW) based on Eng and Billing analysis • Gross RR linked to model assumption changes re: Pgm mandated runtime and hp reduction • Ex Ante demand reductions difficult to achieve given size of baseline pumps • P-Stats made up > 34% of net Program kWh and Therm savings and had gross and net impacts lower than expected • Billing analysis found < ½ expected kWh, 10% Therm savings (models unstable) • DC and SR NTG estimated ~50% Program participants were free-riders • Heat pumps, dishwashers, gas furnaces, and water heaters had high levels of free-ridership (greater than 42%) based on SR NTG analysis

17. Non-Lighting Recommendations • Increase efforts to raise Program awareness, such as: • Ramp back up retailer support efforts • Leverage FYP more effectively by tying it to Program measures • Support Pool Pump standards changes: • Help develop educational campaign to prepare contractors for new standards • Increase awareness of utility training opportunities for PP contractors • Increase Rebate Levels for multi-speed pumps • Continue outreach efforts to trade allies to keep them informed • Consider increasing interactions with HVAC contractors and appliance dealers • Offer increasing incentive levels for VSDs to overcome cost barrier • Continue collecting POS data for further analysis • Include NTG ratio updates as key component in future evaluations • Ex ante NTG ratios appear to be high given current CPUC NTG definitions

18. Questions and Comments??