on-bill loan program research - michigan · customer engagement and satisfaction • inform policy...

PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COMPUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM

Energy Waste Reduction CollaborativeApril 16, 2019

On-Bill Loan Program Research

PUBLIC SECTOR CONSULTANTS @PSCMICHIGAN PUBLICSECTORCONSULTANTS.COM

Presentation Overview

• Overview of the research approach• Research results• Conclusions• Discussion

2


Research Overview

3


Research Partners and Objectives

• Understand customer interest in on-bill energy-efficiency financing options and influence on decision to invest

• Identify impact of program offerings on customer engagement and satisfaction

• Inform policy discussions with regulators and stakeholders

• Guide future program development

• Document customer journey/experience• Identify opportunities for improving

program design or delivery• Explore avenues of expansion or growth

for the On-Bill Loan Program (OBLP)

4


Data Collection

5

SurveyResponses

31 out of 58 responded

Nine out of 18 responded

Focus Group Attendees

Seven out of 31 attended

One out of nine attended

OBLP Participants

OBLP Nonparticipants


Research Questions

• How did participants become aware of the OBLP?• What drove their decisions to participate in the OBLP?• What were their experiences applying for the OBLP?• How does OBLP impact the decision to make energy upgrades?• What energy savings and other nonenergy benefits do participants observe as a

result of their energy upgrades?• What would participants have done in the absence of the OBLP?• What did customers who elected not to complete the loan process do?• How does the program impact participants’ perceptions of their utility

providers?

6


Research Areas

• Energy-efficiency and program awareness • Energy-efficiency investment decision making• Program experience• Program and utility satisfaction

7


Energy-efficiency and Program Awareness

8


Program Awareness

9

City of Holland23%

Holland Energy Fund website

18%

Advertising (e.g.,

newspaper)14%

A contractor 12%

A friend or neighbor

8%

Direct mail17%

Social media 5%

Community event/town hall meeting

3%


Knowledge of Ways to Manage Energy Costs

10

0

1

2

3

4

5

6

Very Low–One Two Three Four Very High–Five

Num

ber o

f att

ende

es

Knowledge level on scale of one to five

Average = 3.6


Energy-efficiency Investment Decision Making

11


Impact of Financing Availability

12

68%

55%

45%

32%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Would not have been ableto make improvements

without financing

Was able to makeimprovements sooner

Increased the number ofenergy-efficiency measures

Was able to select higher-efficiency technologies

Didn't impact my decisionto make energy-efficiency

improvements

Perc

ent o

f res

pond

ents


Reason for Choosing the OBLP

13

13%

19%

32%

35%

42%

55%

65%

90%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Loan application does not require a credit report

Loan does not appear on credit report

Ability to qualify for a loan based on utility bill payment history

Supporting a local program

Ease of application

Favorable interest rate

Length of loan term/lower monthly payment

Convenience of paying on my monthly energy bill

Percent of respondents


Alternative Modes of Funding Energy-efficiency Improvements

14

42%39%

26%

16%

10%6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Would not have madean investment inenergy efficiency

Home improvement orhome equity loan

Cash/check Credit card Financing fromcontractor

Financing fromMichigan Saves

Perc

ent o

f res

pond

ents


Reasons for Making Energy-efficiency Improvements

15

20%

34%

40%

49%

49%

51%

51%

51%

66%

66%

0% 10% 20% 30% 40% 50% 60% 70%

Make my home safer

Prevent damage to my home

Conserve natural resources

Protect the environment

Ability to pay for home upgrades on my monthly utility bill

Manage energy use

Increase value of my home

Replace aging or failed equipment or appliances

Make my home more comfortable

Availability of home energy retrofit incentives

Percent of respondents


Top Reason for Making Energy-efficiency Improvements

16

Reduce my monthly energy costs

29%

Make my home more comfortable

29%Take advantage of Holland

Home Energy Retrofit incentives

15%

Replace aging or failed equipment or appliances

12%

Prevent damage to my home6%

Conserve natural resources6%

Increase value of my home 3%


Barriers to Investing in Energy EfficiencySurvey

• Cost of efficiency upgrades (58 percent)• Lack of information about which energy-efficiency upgrades are most

beneficial (39 percent)• Unable to find qualified or reliable contractors (19 percent) • No significant barriers to energy efficiency (19 percent)

17


Barriers to Investing in Energy EfficiencyFocus Group

• Limited contractor options• Contractors were unresponsive• Limited awareness from marketing• Lack of communication about programs• Uncertainty that upgrades would save money• Program expiration dates• Income (ability to afford upgrades)• Ability to perform work while living in the home

18


Program Experience

19


Program Satisfaction

20

8.9

8.08.6 8.4

8.8 8.68.2

9.1

6.7 7.0

7.9

0

1

2

3

4

5

6

7

8

9

10

Availability ofinformation

Application process Contractoravailability

Contractorperformance

Energy-efficiencymeasure

performance

Closing of the loan Amount of monthlyloan payment

Loan paymentprocess

Mea

n sa

tisfa

ctio

n sc

ore

Participants Nonparticipants


Loan Process

• Participants received information from multiple sources (e.g., the contractor, the City of Holland, and the Holland Board of Public Works) and felt that it would be helpful to have a single point of contact

• There was a lack of clarity about the need for a credit score as part of the loan application

• The program could be improved by streamlining the loan process (e.g., not requiring participants to print documents, ensuring that all materials can be signed and filed at one time)

21


Contractors

• Survey respondents generally gave high marks for contractor availability and performance—some noted the lack of options- None of the approved contractors were headquartered in Holland

• Focus group participants reported mixed experiences with contractors’ knowledge and helpfulness- Lack of clarity about options for—or choice of—subcontractors (i.e., heating and

cooling providers, window vendors)

• One contractor has completed 90 percent of all projects to date- While participants gave relatively high satisfaction scores for contractor

performance, only one of six focus group attendees said they would be likely to recommend the contractor

22


Energy-efficiency Measure Performance

69%

51%46%

29%

14%11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

More comfortablehome

Reduced energyconsumption

Change in energy bill Improved homeappearance

Reduced maintenanceor repair costs

Improved home safety

Perc

ent o

f res

pond

ents

23


Change in Energy Bill

My energy bill has

decreased significantly

38%My energy bill has

decreased slightly

56%

My energy bill has increased

slightly6%

24

• Nearly half of the survey respondents who madeenergy-efficiency upgradessaw a change in theirenergy bill—most of those reported bill reductions


Rating of Home Efficiency

2.1

4.1

0

1

2

3

4

5

Before After

Mea

n ef

ficie

ncy

scor

e

Efficiency rating on a scale of one to five

25

Two-point increase in perceived efficiency

ncrease in perceived efficiency


Program and Utility Satisfaction

26


Likelihood of Recommending OBLP

33%

80%

33%

10%

33%

10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nonparticipants

Participants

Promoters Passive Detractor

27

Net Promotor Score®

70

0


Impact on Utility Satisfaction

33%

53%

22%

17%

45%

30%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nonparticipants

Participants

Much more satisfied Somewhat more satisfied Neither more or less satisfied

28


Conclusions

• The early stages of the program participation process can be difficult for some customers to navigate, which results in program dropout

• Financing is essential for enabling project progress • The importance and convenience of repaying the loan on the utility bill is

unclear, but participants are clearly interested in seeing energy savings in relationship to their investment

• Expanding the pool of qualified contractors would create benefits for future participants

• Offering on-bill financing has a positive impact on customers’ satisfaction with their utility provider

29


Contacts

30

Jason [email protected]

Anne [email protected]

Mary [email protected]

Jill [email protected]

mailto:[email protected]





Questions and Discussion

31


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on-bill loan program research - michigan · customer engagement and satisfaction • inform policy...

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