2003 Single-Family Home Rebate Program Evaluation

1. 2003 Single-Family Home Rebate Program Evaluation Summary of Final Evaluation Report Prepared by: John Cavalli, Itron Tami Rasmussen, KEMA Kenneth James, PG&E July 26, 2006

2. Evaluation Objectives Participation Assessment • Identify measures contributing to savings Program Verification • Verify that measures were installed and program-qualifying Process Assessment • Examine program awareness and customer satisfaction. • Assess retailer and contractor involvement. Measure Assessment • Detailed characterization and assessment of program influence for Programmable Thermostats, Central Air Conditioners and Windows.

3. Program Targets and Accomplishments • Overall, the program fell short of its electric savings goals, but met the majority of its gas and HTR goals. • Energy and demand savings: • HTR accomplishments:

4. Program Accomplishments • Programmable Thermostats contributed over a third of the program’s kWh and Therms accomplishments. • Pool Pumps contributed 20% of the program’s kWh accomplishments. • Clothes Washers contributed a quarter of the program’s Therms accomplishments.

5. Program Verification Results Overall the accomplishments reported to the CPUC were accurately reported and installed. • Applications – were entered correctly and invoices verified program qualifying equipment. • Measure Accomplishments and Ex Ante Values – were verified comparing tracking data, CPUC Final workbooks and PIPs. • HTR Accomplishments – were verified comparing tracking data and CPUC Final workbooks. • Measure Installations – were verified through 1,065 telephone surveys, and were determined to be program qualifying through 76 on-sites. • 98% of surveyed participants recalled receiving their rebate • 98% still have their measure installed • 100% of measures were verified on-site

6. Process and Measure Assessments • Interviews with 742 Participants • Interviews with 42 HVAC contractors, 40 windows contractors, and 21 retailers.

7. Sources of Program Awareness • Retailers remained the primary source for program awareness.

8. Where Participants Obtain Rebate Applications • Retailers also provided participants with rebate applications nearly half of the time. • Significant increase in obtaining applications online

9. Satisfaction • Compared to 2002 • Participant satisfaction with rebate turnaround time increased, reflecting IOU efforts to streamline application processing. • Bill savings continued to receive the lowest satisfaction score.

10. Process Assessment - Retailers • Retailers continue to be a key market actor in moving the energy-efficient appliance market. • Appliance purchasing participants tend to learn about rebates through retailers. • Nearly 75% got an application at a retailer. • 89% recalled speaking with a retail salesperson. • 67% recalled in-store advertising. • Nearly all retailers interviewed were aware of the program.

11. Retailers – Point of Sale Rebates • 44,000 Energy Star Programmable Thermostats were rebated through point-of-sale discounts. • 67% of the retailers interviewed supported expanding POS rebates to additional measures: • Clothes washers, whole house fans, room air conditioners, and pool pumps • POS Retailers believed sales for other program-qualifying equipment could increase by 25% if POS were expanded. • The most significant benefits of the POS approach: • Customers receive their rebates instantly and avoid the hassle of filling out a rebate form. • The greatest drawbacks of the POS approach: • Retailers must rely on the utilities for payment, • Smaller retail establishments are not equipped to handle POS rebates.

12. Process Assessment - Contractors • Contractors figure prominently into making participants aware of program-qualifying heating and cooling measures. • Nearly half of the heating and cooling measure participants: • Became aware of the program through a contractor. • Obtained their application from their contractor. • Over 80% of the contractors interviewed were aware of the program. • Over half of the contractors interviewed said they actively promote rebates. • 70% of HVAC contractors fill out rebate applications on behalf of their customers.

13. Energy Star Programmable Thermostat Assessment • 24,000 participants submitted an application for an Energy Star programmable thermostat rebate. • 7,000 installed on their own (DIY – do-it-yourself) • 17,000 had a contractor install • 44,000 participants received a point-of-sale (POS) discount from a participating retailer. • Tracking data were not collected for these customers, and only 25 participants were surveyed.

14. P-Stat: Existing Equipment and Sales • According to contractors, • 44% of their customers have a programmable thermostat • 21% of their customers have Energy Star-qualified thermostats. • Many Participants replaced existing programmable thermostats • 26% of Contractor installs, 17% of DIY and 12% of POS • HVAC contractors claim installing Energy Star programmable thermostats has become standard practice • 74% of contractor thermostat installations are Energy Star. • However, contractors say only a third of their customers ask for Energy Star-qualified thermostats.

15. P-Stat: Usage • Nearly half of participants claim to use their air conditioner/furnace less after installing their new thermostat • About 40% do not use the programmable features: • Very few use the factory settings (about 10%). • Contractors tend to program the unit for their customers and show them how to use it, according to both contractors and participants.

16. P-Stat Influence: Contractor Installations The Program is having a limited influence on contractor installed units: • 63% of participants claim they would have purchased an Energy Star thermostat in the absence of the program • Only 23% said the rebate was very influential • However, 41% were somewhat influenced • Contractors also indicate program is having limited influence on what they recommend and install. • 95% of contractors replace thermostat when installing AC • 78% install an Energy Star Programmable Thermostat • Contractors report sales of Energy Star Programmable Thermostats would decrease by only 9% if the program discontinued.

17. P-Stat Influence: DIY Installations The Program is also having a limited influence on DIY installations: • 69% of participants claim them would have purchased an Energy Star thermostat in the absence of the program • Only 27% said the rebate was very influential • However, 50% were somewhat influenced

18. P-Stat Influence: POS Installations The Program appears to have more influence on POS installations: • 43% said the rebate was very influential • Only, 16% were not at all influenced • However, 62% of participants claim them would have purchased an Energy Star thermostat in the absence of the program • Retailers report that: • Only 54% of the units they sell are programmable, and only 35% are Energy Star. • Discontinuing the program would reduce sales of Energy Star thermostats by as much as one third

19. Central Air Conditioner – Program Influence • Participants claim they are not very influenced by the program. • 88% say they would have purchased an energy efficient CAC without the rebate. • 37% of participants were not at all influenced by the rebate, and only 18% were very influenced. • 67% claim their primary reason for purchasing a new CAC was to replace an old, broken or poorly-performing unit. • Contractors are much more influential on CAC purchase decisions than the rebate. • 49% of participants claim that their contractors were very influential and only 22% said that they were not at all influential.

20. Central Air Conditioner – Program Influence • The program’s influence on the CAC market is seen more directly on the actions taken by contractors that actively promote the program than on consumers. • Contractors are recommending and explaining the benefits of high efficiency equipment to over 75% of participants • Contractors are filling out the application on behalf of the participant (70% of the time). • Participants are not very knowledgeable about SEER and/or Energy Star ratings for HVAC equipment (only about a third are knowledgeable) • Most participants (55%) do not initially request high efficiency equipment from their contractor. • Contractors claim their sales would be significantly reduced without the rebate. • By as much as a third for Tier III equipment.

21. Windows – Program Influence • Rebates for high-performance dual-pane windows do not appear to have any significant influence on whether or not customers purchase these types of windows. • 90% of participants said that they would have purchased high performance windows absent the rebate • 43% said that they were not at all influenced by the rebate, • Only 10% said that they were very influenced. • Window contractors claimed that high-performance windows accounted for 80% of their total installations. • Even contractors unaware of the rebate program claimed that high-performance windows accounted for 78% of their total installations. • Both aware and unaware contractors almost always recommend high performance windows.

22. Free Ridership Assessment • An assessment of free ridership was made using three participant self report modeling scenarios. Ranges of free ridership were as follows: • Energy Star Programmable Thermostats: 42 – 78% • Windows: 62 – 91% • Central air conditioners not modeled, as it is believed the contractors were primary influencing factor.

23. Recommendations • Reassess the cost-effectiveness of the programmable thermostat rebate • Reassess the program’s gross per unit energy savings estimate for programmable thermostats • Consider eliminating window rebates • Continue central air conditioning rebates • Consider moving the CAC rebate upstream, as the program appears to directly influence contractors, but not customers • Attempt to identify POS rebate participants and better assess the program’s influence on this delivery mechanism.