Messaging Comprehensive Retrofits

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Key Findings

• In an online choice experiment, homeowners tended to prefer comprehensive retrofit packages including heating/cooling system upgrades (7% increased preference), water heater upgrades (22% increased preference), and appliance upgrades (5% increased preference). Preferences varied by demographic segment; we identified six package types that were most preferred by the five demographic groups we identified. Primarily, packages included only efficiency upgrades, but one group (17% of interested homeowners) liked packages with rooftop solar and Level 2 electric vehicle (EV) charging.
  
• In our nationally representative sample of U.S. homeowners (N = 1,500), we found that 65% are willing and able to invest at least $1,000 in comprehensive energy upgrades. To maximize current programs, we recommend focusing marketing efforts on these homeowners. Typically, homeowners in this group are moderate-to-high income (household income >$50,000/year), college educated (undergraduate or higher), live in large homes (2,001–2,500 square feet), have lived in their homes for 6–10 years with no children at home, and own—or are considering buying—an EV. The Inflation Reduction Act (IRA) provides lower-income homeowners expanded incentives to help them receive home energy retrofits; these should be expanded to further assist homeowners who need it.
   
• Homeowners across all demographic segments rated upfront costs, bill savings, and home comfort as the factors most driving their home energy upgrade decisions. These three elements are the most important to target with marketing messages (with health being the fourth). However, other factors, such as the ability to install new smart technologies and/or to increase property values varied significantly by demographic segment and could therefore help further tailor marketing campaigns to make them more effective.
   
• Randomized experiments testing realistic scenarios showed that certain trigger points can increase the likelihood of upgrading, and that sometimes a step-by-step foot-in-the-door technique might help move a customer from a single upgrade to a more comprehensive package. 
  
• Though nearly two-thirds of homeowners were willing spend at least $1,000, comprehensive retrofits are generally more expensive. Among the financial incentives that we tested in one scenario, a zero-interest loan with no upfront costs was the only mechanism that significantly shifted behavior toward upgrading.
  
• We recommend tailoring comprehensive retrofit packages and marketing approaches based on the consumer segments we identify in this report, as well as offering comprehensive upgrades to those segments specifically after trigger points such as HVAC replacement or new home purchase. Moreover, incentives should be increased and creative financing solutions provided to maximize uptake of retrofit packages.