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Knowing Our Trade Allies and How They Work

Cross-program Trade Ally survey results 2018


Introduction Welcome to the third DNV GL national Trade Ally survey, where we take the pulse of the national Trade Ally community to measure the industry’s challenges and opportunities. DNV GL’s 20 years of experience developing and managing these networks across the United States allowed us unparalleled access to this community for this survey.

This project has been funded through our annual research allocation, because we know how important a robust Trade Ally network is to the success of our utility partners. A well developed and engaged network is the backbone of a solid energy efficiency program and we work every day to nurture and build those networks.

An engaged Trade Ally network is well informed and highly productive; gauging their views on key issues is important to maintaining a strong and lasting relationship, while building a robust network. Trade Allies are trade professionals – contractors, distributors, engineers, and designers – that help raise awareness for and encourage participation in utility energy efficiency programs. Trade Allies help identify and implement energy efficiency improvements and apply for program rebates.

Debuting this year is a new section that focuses on a Trending Topic in the market. In each future survey, we will select a new topic to gauge Trade Ally interest on an issue that is important to our customers. This year’s topic is training; as energy efficiency programs mature, training programs should evolve to meet new challenges and opportunities for both utilities and Trade Allies.

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Table of Contents

Executive Summary

4

Business Snapshot

6

Trending Topic: Training

8

Project Rebates

10

Sales and Marketing

12

Outreach 14 Barriers to Customer Participation

15

Key Conclusions

16

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Executive Summary

Energy efficiency programs drive customer engagement and satisfaction. Trade Allies provide a direct link to customers and are a key channel for delivering program benefits and increasing satisfaction levels. They have relationships with customers and can influence energy efficiency perceptions and decisions, while expanding the reach of a utility deeper into a customer’s decision making process. This document summarizes survey findings and provides key insights about this important group of stakeholders. In this, our third Trade Ally survey, we have begun to see a significant shift in how Trade Allies view the barriers to customer participation. Those barriers center on communication and access to customer senior management, with an emphasis on capital constraints and financing – 90% of respondents believe that customer capital constraints are the primary barrier.

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The survey also identified a high demand for training, with demonstrated potential to improve some sector performance with improved training for underperforming sectors. Trade Allies value the training utilities are already providing, and want more, with 68% indicating that they wanted more than the minimum that is required for licensing. Trade Allies across all 50 states participated in the survey. Commercial businesses, specifically industrial, warehouse, and manufacturing comprised the largest percentage of the participants’ customer base. Lighting remains the most common project across Trade Allies; however, it dropped by 11% in the overall landscape of projects. If you are interested in talking with DNV GL about Trade Ally strategy and program design, contact us at sustainable.energy.use@dnvgl.com.


The survey explored Trade Allies’ activities and motivators that influence program success and design, including:

Outreach and marketing

Trade Ally benefits and support

Education and training

Barriers to customer participation

The largest barriers Trade Allies face when selling energy efficiency projects are customer capital constraints and the availability of energy savings data to sell projects to upper leadership. As energy efficiency technologies have evolved, so have the dialogue and business revolving around them. No longer is the decision to invest in a technology or measure the sole domain of the facility manager. More and more that decision lies within the C-Suite and as such, is competing with other business priorities for finite financial resources. Having access to and the appropriate energy savings data for the C-Suite is a key challenge. Trade Allies not only take advantage of utility-provided training to keep up with the requirements to maintain professional certification, but also want additional training to expand their opportunities.

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Business Snapshot

The utility and Trade Ally relationship is a healthy symbiotic relationship which allows both parties to pursue business objectives while fostering energy efficiency as a business driver within a service territory, making them a valuable partner for utilities in delivering energy efficiency. Trade Allies typically generate 75% of a utilities’ annual kWh savings. At the same time, Trade Allies report that utility rebates are important to selling energy efficiency projects, making their relationships with the utilities an important dynamic in their businesses. The perspective of the survey participants provides a broad view of Trade Ally needs that is representative of contractors who work in all 50 states. Confirming the utility’s importance to Trade Ally businesses, more than half of the survey respondents (those taking the time to complete the survey) hold roles such as business owners, C-suite, and senior management. Engagement at this level within businesses demonstrates that the business leaders are engaged with energy

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efficiency and are well aware of the individual businesses participation in the utility programs. Trade Allies are well informed, with 60% of respondents reporting following state energy efficiency legislation to inform their business strategy. DNV GL’s national Trade Ally survey is a market research project designed to monitor industry trends across Trade Ally networks. We received 694 responses to our third Trade Ally survey; first conducted in 2014, the previous two surveys captured responses from approximately 350 cross-program Trade Allies. This survey includes responses from Trade Allies in programs not managed by DNV GL to gain additional perspectives that inform our national viewpoint. The survey participants represent a diverse mix of business size and project activity.


The respondents’ companies represent a diverse mix of primary service providers that include contractors, consultants, and suppliers. The contractor category contains specialists in lighting, HVAC, motors, compressed air, plumbing, and building envelope. We know that Trade Allies support end customers in a variety of sectors and work with all sizes of businesses and projects. 67% of respondents came from unique firms, with some 694 trade allies participating in the survey, representing all 50 states.

Industrial /Mfg/ Warehouse

Food Process/ Grocery/Agriculture

Retail/ Hospitality

Healthcare/ Biotech

26.0%

17.4%

14.3%

11.2%

Residential/ Multi-family

Office

Education

Technology

8.9%

7.9%

4.5%

9.8%

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Trending Topic: Training

Professional Development Given the complexity of many energy efficiency solutions incentivized by utilities today, Trade Allies have an ongoing need for training and education if they are to improve their service offerings and grow their businesses. Utility training courses are an ideal source to fulfill required continuing education credits to maintain licenses or expand service offerings. Trade Allies recognize this need; 68% provide employee training beyond what is required to maintain licenses and at least half of those companies pay for courses conducted through outside or third-party organizations. After on-the-job training, the top three resources used by the Trade Allies surveyed include: 24% Industry and professional organizations 14% Utility courses 10% Trade schools or associations

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Some 24% of survey respondents reported that they are most interested in lighting fixtures, lamps and control. All other topics lagged behind in interest level: „„ Lighting fixtures, lamps, and controls „„ Motors, pumps, variable frequency drives „„ HVAC equipment „„ Building energy management equipment or controls Utilities can use training as a form of workforce development for the Trade Allies, if they were to view them as an extension of the utility staff, albeit specific to energy efficiency programs. Training offers the opportunity for existing Trade Allies to learn the skills they need to grow their businesses, and it offers local contractors the opportunity to gain the knowledge necessary to become Trade Allies. It allows utilities to cultivate the skill sets they need in this third party partner, to deliver energy efficiency goals while improving the end customer experience.


The Trade Allies reported not knowing about rebates for certain measures. This may be due to a lack of rebates in their given sales territories, or it may be lack of education within some territories.

Farm equipment

Training and communications on the following rebates may improve Trade Ally awareness and program performance:

Industrial studies

Commercial kitchen equipment

Energy audits

68 %

Industrial process equipment

Trade Ally firms indicated that they want training beyond what is required to maintain licenses. 2018 Trade Ally Survey 9


Project Rebates

Project Activity More than 75% of Trade Allies report that they actively or very actively promote utility energy efficiency programs in their sales territories. At least one-third of Trade Allies report using rebates for more than 50% of their projects.

To better understand what types of equipment Trade Allies sell, and if they use rebate programs for the equipment, we asked respondents to identify whether they sold a type of equipment in the last year.

In our last survey, Trade Allies indicated that they would expand their business into neighboring territories for better incentives. Our research indicates that they have strategically expanded their businesses. Trade Allies are now working in all 50 states and will go where they find customers’ projects, based on their responses. This indicates that utilities are now in direct competition for Trade Ally time and participation, indicating a shift in the power paradigm within some geographic territories.

Although lighting is still the most common type of project rebated, it dropped from 68% of projects in our last survey to 59% in this survey. It’s possible that this drop is a result of utilities’ increased efforts to market non-lighting projects. The survey provides an early indication of non-lighting project strategy success. Since the last survey, rebated projects with the greatest growth are HVAC equipment, EMS/building controls, and refrigeration.

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Equipment with the greatest potential for application growth: Ventilation equipment

Industrial process equipment

Commercial kitchen equipment

The equipment to the left are those most often sold without a rebate. Therefore, they have the highest potential for new applications. Trade ally respondents actively promote rebates with customers purchasing higher efficiency equipment for a variety of reasons. We identified that a strong 38% of measure purchases are made leveraging rebates and energy savings as key drivers. While the survey did not specifically poll the respondents as to the reason why they did not apply for rebates, we know from practical experience that there are a number of reasons: „„ No rebates available within that program

Farm equipment

„„ Customer was not eligible for a rebate „„ Time constraints didn’t allow for an application

Retro- and monitoring-based commissioning

„„ Lack of awareness that a rebate was available

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Sales and Marketing

Selling to Utility Customers More than 78% of Trade Ally survey respondents actively participate in utility rebate programs. As active participants, educating utility customers on higher efficiency equipment is a part of their job in delivering energy efficiency and closing the deal. Respondents indicated that reduced cost of operations is the key sales driver, with more than 50% of respondents citing it as the leading sales driver.

51% Reduced cost of operations 22% Sustainability and safety 21% Improved occupant comfort 6% Other

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Trade Allies rely on utilities to provide a variety of marketing and sales materials to help them make the case for energy efficiency. As in prior surveys, rebate charts are the most useful piece of marketing collateral, with 73% of respondents. Co-branded program brochures and technology fact sheets follow with 58% and 56%, respectively. We asked Trade Allies whether they think marketing materials branded with the utility logo and their logo (co-branding) is valuable. If it is available, 80% of Trade Allies believe that cobranded marketing materials, advertisements, websites, and sales cards will help their businesses sell more energy efficiency projects. We determined that Trade Allies with moderate participation levels place a higher value on cobranding as opposed to Trade Allies with higher participation levels, who rely more on their own sales support materials.


73%

56%

Rebate chart

Technology fact sheet

58%

47%

Co-branded program brochure

Case studies

Trade Allies responded positively to bonuses to encourage certain types of energy efficiency projects or to increase the overall level of program activity. In general, 60% of survey respondents prefer an incentive or kWh bonus over other types of customer segment or technology-specific bonuses.

Incentive or kWh bonus 59%

Technology-specific bonus 21% Customer segment bonus 12% Time-based bonus 8%

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Outreach

Engagement Outreach Professionals are a resource for Trade Allies, providing insight on selling measures, program rules, and customer engagement. Like the 2015 survey, 64% of Trade Allies value having a designated Outreach Professional available to them during the course of the program year. 33% Monthly

Of those, 33% prefer to interact with an Outreach Professional by phone, email, or in person at least monthly, and another 32% prefer to interact quarterly. Trade Ally respondents rely on multiple sources for their program information. While utility websites are the most popular source for information, Outreach Professionals are the second most popular source along with annual Trade Ally meetings.

32% Quarterly

12% Semi-annually 8% Annually 15% Other

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Barriers to Customer Participation

Trade Allies have always faced barriers in selling customers on energy efficiency projects. In past years, Trade Allies stated that their biggest hurdle was customers not understanding the value of energy efficiency. That shifted with this year’s survey. We found three barriers affecting Trade Ally sales:

„„ Customers have capital constraints and need financing to make projects possible, rated as a moderate to very high barrier for 90% of respondents.

90%

„„ Customers need more tangible energy savings data to up-sell projects to senior leadership rated as a moderate to very high barrier for 78% of respondents.

78%

„„ Trade Allies find it difficult to reach decision makers rated as a moderate to very high barrier for 75% of respondents.

75%

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Key Conclusions

Opportunity Lies with Senior Decision Makers and Education Trade Allies are the conduit between utility energy efficiency programs and customers. Engaging the Trade Ally network, and responding to its needs is vital to continued energy efficiency program success. For the first time since DNV GL began surveying Trade Allies, understanding the value of energy efficiency was not the biggest barrier to participation. The biggest obstacles Trade Allies face when selling energy efficiency projects are customer capital constraints and energy savings data to sell projects to upper leadership. Customer barriers to project participation remain and will always remain; however, this change in perception is an important milestone in energy efficiency in the US marketplace. This tells us that the investment in outreach and marketing is paying off. Why? Because the investment in promoting energy efficiency to

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the end customer has changed perceptions and attitudes. All of that hard work and investment have had a positive impact. As energy efficiency technologies have evolved, so have the dialogue and business revolving around them. No longer is the decision to invest in a technology or measure the sole domain of the facility manager. More and more that decision lies within the C-Suite and, as such, is competing with other business priorities for finite financial resources. The primary barriers to customer participation are capital constraints, project data appropriate and ready for senior management consideration, and access to decision makers. In other words, if we want more energy efficiency projects approved for development or installation, then we need to prepare Trade


s

Allies to elevate their game to gain access to and secure the approval of senior management of the customer. Most utilities already provide some level of training to their Trade Allies to keep them current with program rules and maintain a consistent level of quality and technical knowledge within their service territory. By providing a comprehensive training approach that wraps around the Trade Ally, a utility can provide both the technical training necessary to sell and install technologies in their territory. While simultaneously providing sales and business education skills that will allow a Trade Ally to grow their business and increase applications.

They are also telling us that capital constraints are a real barrier for their customers. This opens the door to Strategic Energy Management (SEM). Not only does SEM offer a strategic, multi-year energy management plan tailored to the customers objectives and needs, it provides predictable capital expenditure planning and reduced overhead in energy spending. It provides the customer with greater control and transparency of when and how energy efficiency spending will impact their capital budgeting. Clearly, utilities and Trade Allies have done their job in selling the value of energy efficiency. This brings an opportunity for utilities to increase penetration of energy efficiency, and possibly add more complex measures to the mix.

Trade Allies are demonstrating that they need business and training support from the utilities. Training that would allow them to better understand how to build a business case, how to better work with project data to make the case for the investment, and how to communicate in a manner that would more likely get the attention of senior management and secure funding.

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DNV GL DNV GL is a global quality assurance and risk management company. Driven by our purpose of safeguarding life, property and the environment, we enable our customers to advance the safety and sustainability of their business. Operating in more than 100 countries, our professionals are dedicated to helping customers in the maritime, oil & gas, power and renewables and other industries to make the world safer, smarter and greener. In the power and renewables industry DNV GL delivers world-renowned testing and advisory services to the energy value chain including renewables and energy efficiency. Our expertise spans onshore and offshore wind power, solar, conventional generation, transmission and distribution, smart grids, and sustainable energy use, as well as energy markets and regulations. Our experts support customers around the globe in delivering a safe, reliable, efficient, and sustainable energy supply. Learn more at www.dnvgl.com/energy. The trademarks DNV GL and the Horizon Graphic are the property of DNV GL AS. All rights reserved. ŠDNV GL 04/2018

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2018 Trade Ally Survey 18

Knowing our Trade Allies and how they work  

Cross-program Trade Ally survey results 2018

Knowing our Trade Allies and how they work  

Cross-program Trade Ally survey results 2018