PGE Water Heater ET Final Report - FINAL.pdf - Emerging ...

PG&E’s Emerging Technologies Program ET12PGE3191
of a qualified product. The program approach relies on point of purchase messaging
through signage and trained salespeople that relate to targeted customers.
Cost
The program concept addresses consumer, PG&E, and channel costs that impact success.
The consumer faces the incremental cost of the efficient water heater, which is partially
offset by the PG&E rebate. Rebates and program administration are important PG&E’s
costs. The retailer’s cost of participation has to be returned through increased revenue and
profits. Program design levers to simultaneously address these cost concerns are rebate
amount and program timing. Additionally, PG&E’s administrative costs and some of the
retailer’s cost of participation can be managed by leveraging existing water heater program
plans, work papers, and field services infrastructure.
In the near term, a scaled down test program assesses different marketing tactics to prove
market-focused concept and achieve market penetration goals. Retail channel engagement
during test gets retailers’ buy-in on the concept and input on program design. Since
retailers sell installation services and have relationships with plumbing contractors, lessons
learned from the retail effort apply to execution of a contractor channel program. Following
proof of concept, the program can be directed at additional retail segments and marketfocused
design concepts can be extended to the contractor channel.
BACKGROUND
Water heating is a major energy use in most Californian’s homes. It accounts for 49
percent of natural gas consumption and 3 percent of electricity use.
California Residential Household Electricity Use California Residential Household Natural Gas Use
Source: 2010 California Residential Appliance Saturation Survey, 2009 Data
The installation and use of efficient electric and natural gas water heaters represents a
unique and strategic opportunity for Investor-Owned Utilities (IOUs) to contribute to savings
goals throughout the program cycle. Traditionally, energy efficient water heaters have been
incented in the California market through downstream rebate programs, where consumers
receive a rebate via mail-in application for qualifying water heater models.
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