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

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PG&E’s Emerging Technologies Program ET12PGE3191 Rheem and American Water Heater are also leading electric resistance water heater manufacturers. American Water Heater is the OEM for Kenmore, Whirlpool and dozens of other electric heater brands. Models (AHRI 2012) 200 180 160 140 120 100 80 60 40 20 0 Number of Electric Water Heater Models by Manufacturer and Energy Factor Original Equipment Manufacturers Eleven original equipment manufacturers produce 32 electric heat pump models, according to AHRI database of certified water heaters. A.O. Smith and Rheem have nearly 40 percent of these models. Percentage of Heat Pump Models by Manufacturer (AHRI 2012) 9% 9% 27% 9% 12% 9% 18 3% 9% 3% 6% 3% ≥.93 .9-
PG&E’s Emerging Technologies Program ET12PGE3191 Retailers The Home Depot, Lowe’s, and Sears are the leading retailers of residential water heaters. They sell directly to consumers who do the installation themselves or use one of the retailer’s installation service providers. These retailers also sell to the construction and plumbing trades. In PG&E’s service territory, the three leading retailers have 217 stores. Table 5 shows the distribution of these stores in PG&E’s designated areas. PG&E Areas Channels (Count) Plumbing Home Code Population HVAC Depot Lowe's Number Center Contractors Distributors Stores Stores Sears Stores AREA1 San Francisco 392 10 5 3 2 AREA2 Oakland 553 15 16 7 10 AREA3 San Jose 577 12 16 5 9 AREA4 Fresno 581 2 19 10 14 AREA5 Stockton 363 14 11 8 12 AREA6 Sacramento 833 27 24 12 17 AREA7 Napa 399 13 7 2 8 Total 3,724 93 98 47 72 Wholesale distributors and contractors are not as concentrated as retailers. There are nearly 100 distributors and thousands of installation contractors. More than 70 percent of the contractors are small business establishments with fewer than 10 employees. WATER HEATER CUSTOMERS Customers for replacement residential water heaters are homeowners and rental property owners and managers; builders are the primary customers in new construction markets. In the current economy with low rates of new home construction, about 90 percent of water heater sales are for replacement of old units. 16 Water heaters are replaced every 10 years or so, therefore most people will only have a couple customer experiences with water heaters in their lifetimes. Furthermore, water heaters are “low touch” or “out of sight – out of mind” products, unlike refrigerators and other durable goods with which customers interact regularly. These factors have implications on customer purchasing behavior related to energy efficient water heaters and related marketing strategies. DECISION MAKING In a market-focused water heater program, a critical factor for success is an understanding of the purchase process from the homeowner’s point of view. The fundamental buying 15 Sources: U.S. Census, PG&E, Reference USA, Retailer web sites. 16 Verinnovation Inc., “2011 Water Heater Market Update,” REPORT #12-234, Northwest Energy Efficiency Alliance, January 16, 2012, p. 7. 19
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