Goal Setting and Scaling
Why It Matters
Determining your program’s goals and scale will shape what the utility will eventually create. Programs without goals are aimless and ineffective. Who is the utility trying to serve? Why? How will the utility do this? And just as importantly, how will the program be sized to best fit for the utility and the goals it aims to meet?
Goals
Beneficial electrification includes the application of electricity to end-uses where doing so satisfies at least one of the following conditions, without adversely affecting the others:
The utility needs to decide which goals are most important. And the utility may have other important goals to add, such as reaching low- to moderate-income members. While there are many models to emulate from other utilities, it is important to decide where to focus efforts. Will the utility take on transportation opportunities or buildings? Both? Does the utility have the appetite for a large-scale beneficial electrification program? How much assistance and guidance do you want to want to offer member-customers?
Is the program being created from scratch, or is it being built from existing offerings? For example, a goal could simply be to expand participation in an existing program to reach customers who have the greatest need for beneficial electrification’s energy savings. Tools such as financing may help expand the reach of the program to specifically target low- to moderate-income residents. If the program is being developed from scratch, goal setting is more involved.
Establishing two to three primary goals will help program administrators make program design decisions and prioritize resources. Let your goals lead your beneficial electrification program.
Guiding Questions
Please read the following list of program goals. Because most successful programs focus on a manageable set of goals, please rank these goals in order of importance to your organization.
Expand access to financing to individuals that do not qualify for products currently in the marketplace
Encourage member-consumers to invest in beneficial electrification measures
Lower member-customer total energy costs
Stimulate the local economy and create jobs
Maximize the number of member-customers making upgrades, regardless of the amount of financial savings per project
Maximize sales growth
Minimize operational costs
Reduce greenhouse gas emissions
Maximize the reduction of energy derived from nonrenewable fuels, such as heating oil and propane
Improve customer satisfaction
Incorporate rental properties
Meet a legal mandate
To reach a particular under-served type of customer
Other: ________
Which statement best represents your thinking about the potential program?
The program should be most concerned about maximizing total energy savings among all participants.
The program should be most concerned about maximizing energy savings per participant, requiring that each participant exceed a threshold level of energy savings.
The program should be most concerned about optimizing total energy savings among all participants while also ensuring that each participant exceeds a threshold level of energy savings.
Identifying Potential Barriers to Program Success
Once the goals are set, program planners should evaluate the barriers to reaching those goals. Some of these barriers will likely be obvious, and some will need to be identified through reflection and investigation. Program planners are encouraged to talk to stakeholders and fellow staff to identify potential issues that could trip up the program — and then work with these partners to identify possible solutions.
Barriers to creating and implementing a successful program will likely exist both within the utility and externally. Internally, are there any gaps in knowledge, enthusiasm, resources, or system processes? What are the lawyers going to worry about? Among the target customer base, what is holding them back from pursuing electrification measures on their own? It is likely some combination of unfamiliarity with new technologies, uncertainty of how to move forward, and financial challenges. But what are the specific concerns, and how can the program best address them? And finally, how does the program make sure that it has the third-party partners needed to be successful? Do the local installation contractors and auto dealers have the desire and capacity to help make the program a reality?
Some key potential barriers to consider include:
Developing Cohesive Internal Utility Support
Reaching the starting line can perhaps be the largest challenge. It can be difficult within any type of organization to align various parts of the organization in order to move in what may be a new direction. But organizational strength comes from a team of differing viewpoints (provided that there is a person or system that can channel differences in a productive way), and this can lead to a stronger overall program. Within this toolkit, various pieces are provided to help persuade different stakeholders within an organization about why a robust beneficial electrification program can be an important asset for the utility’s customers, community, and the utility itself.
Motivating Customers
As with any behind-the-meter program, the key to achieving any results is to spur action by the customer. Getting the word out to your members about a great program is vitally important to reaching scale and successfully helping your members save money through electrification. But also, it is just as important to craft a program and a message that resonates with customers and addresses their key barriers to action. Review the Toolkit’s Marketing page to learn more.
Finding the Right Financial Levers
Cost will be a major barrier for many customers to implement electrified end-uses, even for measures that are highly cost-effective. Rebates can be an important tool to incentivize electrification measures. But these will disproportionately motivate higher-income customers, who can afford the upfront costs and then wait for both the rebate and long-term investment returns.
To better reach the rest of the customer base, other financial tools will be necessary. Do customers have a reliable way to finance projects, perhaps through contractors, local lenders, or a statewide financing program? If not (or if these programs are insufficient or out of reach to customers with poor credit), a utility-backed financing program can fill an important gap. These can be run in-house or in partnership with a local lender. A common theme of successful programs, however, is that they are carefully crafted to emphasize inclusiveness and the specific needs of target customers. Of course, even the suggestion of creating a financing program within the utility may call many potential barriers to mind, particularly securing investment capital. Luckily there are resources and solutions available, including a 0% USDA loan program for rural utilities to relend to customers for cost-effective improvements. To learn more, see the Toolkit’s pages on Program Funding, Incentives and Financing, & On-Bill Financing.
Building Contractor Considerations
Understand that not all local HVAC contractors will be willing to be part of electrification programs, and may voice skepticism about heat pump technology. The cold weather performance of heat pumps has greatly advanced in the past 10 years, but many installers have limited experience or training opportunities with these new technologies. Their assumptions and business models may not have caught up to new realities. It is important to engage with potential installation contractors early on to determine their comfort and readiness with your project’s goals.
Auto Dealer Considerations
While auto dealers can be a natural industry partner for promoting EVs, not all dealerships are deeply knowledgeable or accepting of the nationwide transportation electrification transition. Misinformation and skepticism may be a challenge with some dealerships, however, there are many dealers who are welcoming the change, and understand the opportunity.
Legal Questions
Depending on the state, there may be a number of policy restrictions around fuel switching programs. It can be daunting, especially when developing an innovative approach that may not have legal precedent. Because there is such broad interest in electrification, chances are that the state energy office, state-level nonprofits, and other utilities have had similar questions. Consider reaching out to see if others can highlight legal pathways or barriers.
Scale Matters
What type of impact is your utility hoping to see? Accelerating an electrification program can compound benefits for the customer, community and the utility.
If the program doesn’t have ample scale, it is very challenging to create an impactful program. The Cumulative Power of BE Revenue Growth graph illustrates how a more aggressive program can yield substantial compounded revenue. If a program is not ambitious or large enough, utilities can lose the economies of scale. In order to keep a program alive and supported, the program’s team will need to be able to demonstrate impact.
Starting Small
If the team would rather keep it simple, what small, invigorating step can your utility take in the next 90 days towards beneficial electrification? A small step may focus on either building electrification needs or transportation electrification, and it can be an action just motivating enough for the utility to test the appetite for such a program.
For example, can your utility purchase an EV for your fleet to understand the customer benefits? This EV could even be offered for ‘ride and drive’ events where the utility’s customers are invited to test the vehicle. Alternatively, a small building electrification project to motivate your utility could involve choosing one home to help upgrade. By focusing on one low-efficiency home that also may rely on the utility for assistance with bill payments, the utility can highlight the benefits of their program, test out the program’s structure, and build natural community support through this helpful project.
The main trap with starting small is staying small. In order to build toward more impactful outcomes, it is important to have a clear plan for growth from the outset.
Going Big
If the team wants to go big, set targets and metrics for success by detailing the audience you wish to reach, and the duration of the program. What scale will be needed to create a cost-effective and self-sustaining program?
Consider how do you define your scale. Where is the scale decision made? How do you go after that? How will the utility create the most benefit to their community and members/ program participants?
More local jobs and economic stimulus can be created with greater amounts of local investment to improve the local economy with an aggressive program
Take time to research how other utilities have found success with their beneficial electrification initiatives, starting with the Toolkit’s case studies.