Market Realities and Change Management to Accelerate ... › buildings › ... · VOC Co ectionT...

Cost Effective Energy Retrofit Team

Market Realities and Change Management

to Accelerate Adoption of Cost Effective

Residential Energy Efficiency Retrofits

Update August 10, 2011

Cost Effective Energy Retrofit Team Jeff Alcott, Dow Chemical

Elena Enache-Pommer, Dow Chemical

1



Jeff Alcott, Dow Chemical Teresa Angsten, Dow Chemical

Elena Enache-Pommer, Dow Chemical Chris Hall, Kent County Habitat for Humanity

Brian Holton, Ferris State University

Mike Mazor, Dow Chemical Arn McIntyre, Ferris State University Energy Center

Dr. Tim Mrozowski, Michigan State University

Gary Parsons, Dow Chemical Kaethe Schuster, Dow Chemical

Dr. Matt Syal, Michigan State University

Dr. Suk-Kyung Kim, Michigan State University

2


Project Update

1. Research Objective

2. Roadmap

3. Process stages

3


Research Objective Building America Implementation STC

The Building America goal is for 1.3 million homes to have energy efficiency retrofits by the end of 2013

Past experience shows we need a new way of accelerating the adoption and implementation rate of energy efficiency retrofit best practices to achieve our goal.

Research Priorities: • Value Chain • Best Business Practices • Information Delivery Mechanisms • Business Models to achieve success

4


Research Objective

Develop a sustainable "Business model“ that

increases the adoption rate of Residential

Energy Efficiency Upgrades using Building

America knowledge

5


Roadmap

Design for Six Sigma Methodology A development process that identifies and uses CUSTOMER

NEEDS / REQUIREMENTS and data-based decisions to drive

to a SUSTAINABLE SOLUTION

6


Roadmap

Design For Six Sigma

Development process stages: 1. Define - Plan 2. Measure - Collect & analyze Voice-of-the-Customer data

We are here - (Measure stage is about 50% completed)

3. Explore - Formulate & qualify solution concepts 4. Develop - Establish & validate the ideal solution 5. Implement - Execute plans to sustain-the-gain

7


Roadmap Comments

• Continuous efforts through Six Sigma to achieve predictable process results • Characteristics that can be measured, analyzed, improved and controlled • Achieving sustained quality improvement requires commitment from the entire organization, including top-level leaders • A clear commitment on making decisions on the basis of verifiable data, rather than assumptions

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Process Stage: DEFINE

Project Plan

Project Charter

Research Goal: Sustainable "Business model“ that increases the adoption rate of Residential Energy Efficiency Upgrades using Building America knowledge

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Esta h terview ams av ility r O cott x nfirm am calendar r collection cott x entify ‐ sites rgets gs ten x resa contact c conf m use

recuiter set ce‐ ‐ ce interviews Angs ten

?

Negotiation with NREL to obtain TO2 singature Ma zor & Mitch

x

Establish VOC Recuiter agreement Angs ten x Establish Homeowner & Contractor screener for Recuiter Angs ten

x

Complete VOC Interviewer training fro Interview Team Angs ten

x x

Finalize Interview guide (Interview Topics & Questions by audience & review with interview Teams Angs ten

x x

Obtain camera (4) & digital recorder (4) for site visits Al cott

x

Identify a transcription service for digital recorded VOC discussions Al cott

X

Determine VOC data analysis possibilities with MSU & FSU Enache

x

Confirm VOC data analysis process (& consultant?)

Angsten/Mazor/E nache

Quantitative VOC collection (MSU??) Angs ten

Lansing interviews (Lansing Team review at end of each day) Syal

x x x

Detr oit interviews (Detroit Team review at end of each day) Mazor

x x x

Fort Wayne interviews (Fort Wayne Team review at end of each day) Angs ten

x x x

Grand Rapids interviews (Grand Rapids Team review at end of each day) McIntyre

x x x

Chicago interviews (Chicago Team review at end of each day) Parsons

x x x

Review meeting all Interview Teams to capture key learnings. Al l

x

Interview Teams complete Influencer telephone interviews Al l

x x x x x x x x x x x x x x x x x x x

VOC data analysis & Customer Needs ID Tea m

Solution design concepts by December 31, 2011

Proposed solution & implementation plans by June 1, 2012


Process Stage: MEASURE (current status)

Value Chain Flow of Knowledge

Flow of Money Value Chain members at the table

Flow of Materials when the decision is made: Homeowners(10 diagrams) Contractors

Retail/Lumber yard

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Value Chain Stakeholder

Interview objectivesinformation needed to define customer needs

Who to interview

How to interview Interview Topics Interview Questions

Ex s ng research data to

support?

VOC Verbatims from interviews

(used to define Customer Needs)



Voice-of-the Customer Collection Plan

Who, Why, What, When & How Reviewed & received input from Building America

Expert meeting June 1, 2011

Value Chain Stakeholder

Interview objectives‐‐information needed to define customer needs

Who to interview

How to interview Interview Topics Interview Questions

Exiisttiing research data to

support?

VOC Verbatims from interviews

(used to define Customer Needs)

HoHommee ownowneerrss (&(& RenRenttaall//LLeaeasseess PrProoppeerrttyy OOwwnenerrss/O/Opeperraattoorrss))

1.1. WhWhaatt wwillill momottiivvaattee hohommeeowneownerrss toto pupurrcchashasee ththee ininssttaallallattiioonn ofof EEEE rerettrrooffitit

HoHommeeoowwnneerrss QQuuaall.. VOVOCC ArAree yoyouu sasattiisfsfiieedd wiwitthh ththee heheatat && ccoooolinlingg cocommffoorrtt inin yoyouurr homhomee??

PlePleaassee tetellll usus aboabouutt yoyouurr ccuurrerrenntt lelevevell ofof ssaatitissffaacctitioonn wiwitthh ththee iindondooror tetemmppeerraattuurree anandd aassocssociiaatteedd comcomfforortt lelevevell inin yoyouurr hohommee..

2.2. WhWhaatt wwillill momottiivvaattee hohommeeowneownerrss toto pupurrcchashasee andand ininssttaallll EEEE rerettrrooffititss (D(DIIYY))

HoHoww mumucchh dodo yoyouu spspeenndd onon enenererggyy uuttilitilitieiess??

InIn ththiinnkikinngg ababoouutt yoyouurr mmoontnthlhlyy enenererggyy uuttiliilittyy bbillsills,, cacann yoyouu tetellll meme onon avaveerragagee whwhatat yoyouu spspeenndd inin ththee summsummeerrttiimmee?? InIn ththee wiwintnteerr mmoontnthshs??

3.3. WhWhaatt wwillill hehellpp enenssuurree ththee hohommeeowneownerr susussttaaiinn thethe gagainin (f(feeeeddbbaacckk // seserrvviiccee coconnttrraacctt // ongongooiinngg ffeedeedbbaacckk memecchhaanniissmm // lolonngg teterrmm rerelalattiioonnsshhiipp))

WhWhaatt woulwouldd mmootitivavatete yoyouu inin imimpprroovviningg ththee enenererggyy sasavviinnggss ofof yoyouurr hohommee??

WhWhatat wowouulldd mmootitivvaatete yoyouu momosstt toto imimpprroovvee ththee enenererggyy efefffiicceennccyy ofof yoyouurr hohommee?? ProProbbee afaftteerr ininititiaiall rreespspoonnsese:: InIncecennttiivveess,, rerebbaatteess,, bbillill sasavviinnggs,s, imimpprroovveedd hohommee cocommffoorrtt,, enenvviirroonnmmeennttaall imimppaacctt,, etetcc..

YY

4.4. WhWhaatt vavalliiddaattiioonn ofof ththee bebenenefifitt oror cocosstt sasavviinnggss isis ththee homhomeeowneownerr expexpeeccttiinngg

WhWhaatt dodo yoyouu ththiinnkk yoyouurr hohommee nneedeedss forfor grgreeaatteerr enenererggyy efefffiicciieennccyy??

WhWhatat iimmpprroovvememenenttss cocouulldd yoyouu mamakkee toto yoyouurr homhomee toto mamakkee itit momorree eneneerrggyy efefffiicciieenntt??

5.5. WhWhaatt woulwouldd sasattiisfsfyy ththee hohommeeowownenerr toto knknooww ththaatt ththee EEEE reretrotroffitit hashas bbeeneen cocommpplleetteedd cocorrrreeccttllyy

WhWhaatt araree yoyouu wwiillinllingg toto spespenndd onon enenererggyy efefffiicciieennccyy iimmpprroovvememenenttss??

WoWouulldd yoyouu bebe wwillinillingg toto spspeenndd monmoneeyy toto mamakkee yoyouurr homhomee momorree enenererggyy efefffiicciienentt?? IfIf soso,, hohoww mumucchh (w(wiitthhiinn aa titimmee frfraammee,, toto lolowweerr enenererggyy bbiillslls byby X%X%,, etetcc.. ‐‐ nneedeedss aa poipoinntt ofof rereffeerreennccee))

6.6. WhWhaatt dodoeess enenererggyy eeffifficciieenncycy memeaann toto ththiiss ststaakkeehhoollddeerr??

WhWhaatt isis ththee vvaaluluee//rerettuurnrn yoyouu expexpeecctt wiwitthh EEEE trtrooffiitt imimpprroovveemmeennttss??

WhWhatat wowouulldd bebe aa memeaanniinnggffulul rerettuurnrn onon yoyouurr ininvveessttmmeenntt inin mamakkiinngg yoyouurr hohommee mormoree enenererggyy efefffiicciienentt?? ThThaatt isis,, whatwhat wowouulldd mamakkee yoyouu ffeeleel lilikkee ththee monmoneeyy yoyouu spspeenntt wawass aa ggoodood ininvveessttmmeenntt.. ProProbbee:: SaSavvee sasammee amamoouunntt inin uuttilityility cocossttss inin aa cecerrttaaiinn amamoonntt ofof titimmee ‐‐ whwhaatt isis ththaatt titimmee ‐‐ rereffeererennccee nenexxtt quequessttiioonn

7.7. WhWhaatt araree thethe bbaarrierrierrss toto EEEE rerettrrooffitit?? EEmmoottioionnaal,l, momoninittaarryy,, phyphyssiicacall,, titimmiingng

WhWhaatt papayybbaacckk titimmee peperriioodd wowouulldd yoyouu expexpeecctt wiwitthh EEEE rerettrrooffitit imimpprroovveemmeennt?t?

YY

8.8. IsIs ththeerree aa pprreeffeerrerredd seseqquueennccee toto enenaabbllee EEEE rerettrrooffititss (tr(truusstt,, cceeddiibbilitility,y, rerelalattiioonnsshhipipss,, inin adadddiittiioonn toto tetecchhnonollooggyy andand pprrooductsducts e.e.gg..))

WhWheerree dodoeess enenererggyy eeffifficciieenncycy iimmpprroovvememenentt fifitt inin yoyouurr hohommee bbudgeudgett prpriioorriititieess??

InIn teterrmmss ofof alalll ofof ththee thithinnggss onon aa toto‐‐dodo lislistt foforr yoyouurr hohommee,, whewherree dodoeess enenererggyy efefffiicciieennccyy falfalll onon ththaatt lislistt ‐‐ isis itit hihigghh,, loloww,, mimiddddllee prpriioorriity,ty, notnot yeyett ccoonnssiidderereded?? WhWhaatt cocommeess bebeffoorree enenererggyy efefffiicciienenccyy iimmpprroovvememenenttss onon thethe lislistt??

9.9. WhWheerree areare yoyouu ggeettittinngg yoyouurr ininffoormrmaattioionn?? (tr(truusstt??))

UUndenderr whwhatat ccoondindittiionsons wowouulldd yoyouu tatakeke ououtt aa hohomeme eqequuiittyy loloaann toto paypay foforr enenererggyy sasavviingngss iimmpprroovvememenenttss??

IfIf yoyouu wewerree ccoonnssidideerriningg mamakkiinngg enenererggyy efefffiicciieennccyy imimpprroovveemmeenntsts toto yoyouurr homhomee,, whwhiicchh ofof ththee ffoollollowwiinngg optoptiionsons wowouulldd yoyouu mostmost lilikkeellyy ccoonnssidideerr//uuttilizeilize inin teterrmmss ofof paypayiinngg forfor ththee mamatteerriiaallss oror papayiyinngg aa coconnttrraactctoorr toto dodo ththee worworkk:: PaPayy wiwitthh cacasshh,, ususee aa crcreeddiitt cacarrdd,, homhomee eqequuiittyy loloaann,, peperrssonalonal loloaann,, ototheherr..

Qualitative VOC 50 face-to-face VOC

interviews with Value Chain decision makers

(Detroit, Chicago, Lansing & Grand Rapids)

50 telephone VOC interviews with Value Chain Influencers

Quantitative VOC (tbd based on qual. VOC)

11



Voice-of-the-Customer Data Collection Preparation

Interviews guides for each Interviewer training Interviewee recruiting & schedulingValue Chain stakeholder

• Homeowner • Contractor • Retail/Lumber yard

Date Time

7-19 10:00 AM

7-19 2:00 PM

7-19 2:00 PM

7-20 8:30 AM

7-20 10:00 AM

7-20 10:30 AM

7-20 2:00 PM

7-20 3:00 PM

7-21 8:30 AM

7-21 10:00 AM

7-21 1:00 PM

7-21 3:30 PM Edmundo Q. Homeowner XXX

Katherine I. Homeowner XXX

Tom C. Homeowner XXX

Matt Z. Contractor -

General Remodeling

XXX

Ashraf A. Contractor - Areas

HVAC knowledgeable

XXX

Ira R. Lumberyard Employee XXX

Michael R. Homeowner XXX

Katherine D. Homeowner XXX

Mike S. Contactor -

General XXX

Lyle S. Contractor -Remodeler XXX

William (Bill) M. Contractor -General XXX

Christine R. Homeowner XXX

Segment Meeting Place Address Name

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Voice-of-the-Customer Data Collection (~50% completed)

Completed: Face-to-face Qualitative VOC interviews with Value Chain decision makers- Homeowners, Contractors & Retail / Lumber yards (Detroit, Chicago, Lansing & Grand Rapids)

In-progress: • Face-to-face VOC interviews with Utilities companies (new)

• Telephone VOC interviews with Value Chain Influencers (bldg material suppliers, energy auditors, industry associations, DIY websites, govt, bldg science experts, realtors, consumer advocacy groups)

• Quantitative VOC (tbd based on qual. VOC)

13


Process Stage: MEASURE (Next Step)

Voice-of-the-Customer data

CustomerAffinity process

Needs [ to achieve Research Goal ]

Needs Features

Measures

Quantitative VOC Collection Plan

(Margin of error target: +/-5 pts @ 95%conf.)

14


Process Stage: MEASURE (Next Step)

House of Quality Design Measures

Critical Customer Requirements

Customer Needs

Customer Needs (from Qual. VOC) <‐

‐‐Impo

rtan

ce Rating (1 ‐5 most impo

rtant)

Time to

find

EE retrofit info/services (hou

rs)

% Sales

call efficien

cy (w

ork contracts/sales calls)

BBB ratin

g of

service prov

ider

Time to

iden

tify EE

retrofit op

portun

ities

(hou

rs)

EE re

trofit To

tal Cost ($)

Time to

validate EE

retrofit saving

s (hou

rs)

Hom

eowne

r cash flo

w ($

/mo.)

Hom

eowne

r payba

ck period (yea

rs)

No.

of financing

options

available

Relationships matrix

Design Measures

Time to

com

plete fin

ancing

(hou

rs)

Cred

it ratin

g change

with

fina

ncing

Cost

of follow‐up correctio

ns &

repairs

($)

Time to

com

plete im

prov

emen

t installatio

ns (h

ours)

Cost

of corrections/rep

airs

not

in service

quo

te ($

)

Time to

con

firm

cod

e compliance (hou

rs)

CO2 level (pp

m)

VOC (ppm

)

% EE retrofit material in de

aler/retailer stock

Customer Perception Rating of Current Situation [from Quant. VOC]

HO Weatherization service readily available to homeowner

Di rec ti on of Improvement ‐‐>

4 ❾

↓ ↑ ↑ ↓ ↓ ↓ ↑ ↓ ↑ ↓ ↔ ↓ ↓ ↓ ↓ ↓ ↓ ↑ 1 2

*

3 4 5

Strong

HO Weatherization service has convincing value proposition 5

❾ O ③ ③ ❾ ❾ ③ ③ O O O * Medium

HO Confidence in contractor/service company 5 ③ O O O O O * Weak

WC/HO Efficient way to identify specific energy saving options for each home 4

❾ ❾ *

WC/HO Efficient way to validate specific energy savings for each improvement option 5

❾ ❾ ③ ③ *

HO

HO

HO

Guaranteed positive cash flow of retrofit

Easy process for financing

Will not affect credit rating

5

5

3

❾ ③

③ ❾

❾

*

* *

WC/HO

HO

Efficient plans to implement each improvement option

Valuable installation warranty

4

3

③ ③ ③ ③ ③

❾

❾ ③ O O

*

*

HO

WC/HO

WC/CO

Work causes no additional damages

Quick improvement installation

Complies with building code

2

3

4

③ ③ ❾

❾

O

❾

O

*

* *

HO

WC

WC

No health concerns (CO2, radon etc)

Easy to complete (DIY)

Materials readily available

4

4

4

③ ③ ❾

❾ ❾

❾

*

*

* DR

Design Targets: [from VOC / other]

Know what materials will sell

Technical Competitive Assessment:

4

Difficulty Rating:

Relative importance:

<0.25

36 102

75% >B+

20 61

<0.5

O

?

48 86

<0.5 >$20

117 87

<5 3

15 65

[Select CCRs]

<0.25 0

27 39

0 <16

119 30

0 <0.1

53 45

N.D. N.D.

45 36

100%

*

Targets & requirements

Quantitative VOC data (Margin of error target: +/-5 pts @ 95%conf.))

15


Process Stage: EXPLORE (By end of 2011)

Critical Customer Develop Design ConceptsRequirements Functional Analysis

Critical Customer Requirements Functions Secondary function Secondary function

Time to complete improvement installations (hours) Selects right installation technique Understand situation Confirm construction details Time to confirm code compliance (hours) Complete FMEA CO level (ppm) Plan job Define removals VOC (ppm) Define installations

Define materials Complete improvements Obtain materials

Complete procedure Clean‐up Determine final performance

Time to identify EE retrofit opportunities (hours) Identifies right customers Define housing demographics Understand housing ages Understand housing constructions

Time to validate EE retrofit savings (hours) Identifies right improvements Define defects Define situation Determine initial performance

Define opportunities Identify opportunities Evaluate tradeoffs Confirm improvement opportunities Define net energy savings

Homeowner cash flow ($/mo.) Saves money & Incentivizes purchase Define savings Calculate cost savings Homeowner payback period (years) Define costs Calculate material costs EE retrofit Total Cost ($) Calculate labor costs Time to complete financing (hours) Calculate overhead costs

Define financing Check lender financing options Select best financing option

% Sales call efficiency (work contracts/sales calls) Identifies right sales/cost saving message Define message Define value proposition

Define improvements Establish credibility

generate concepts [ to achieve Research Goal ]

Functional analysis

Functions [that satisfy the CCRs/Customer Needs]

A B C . . .

1 2 3 . . . .

Design Concepts [Business model characteristics that meet all customer requirements/functions]

Expert system +

Delivery system

+ y

Difficulty 2

Savings 3

Time 1

Cost 3

Resources 2

A 9 9 4 7 3 76 B 7 5 3 9 5 69 C 4 1 1 10 8 58 . . . . . . . . . . . . . . . . . . . . .

Criteria & Weight Concept Sum

Best-fit Concept Selection

Best “Business model” Concept

16


Process Stage:

DEVELOP (1H 2012)

• Develop detailed “business model” design

• Functional capability assessment

• Validation

• Implementation plan

Implementation to be decided 2H 2012

17


THANK YOU! Questions?

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