Best Practices for Program Design and Implementation

How utilities can create successful energy-efficient residential new construction programs

Over the decades, ENERGY STAR has worked with more than 100 Utilities and Other Program Sponsors across the country to create successful energy-efficient residential new construction initiatives. Read on for expert tips on designing and implementing a program of your own. 

Interested in expanding your program to include multifamily buildings? Learn more about utility support of energy-efficient multifamily construction. >>

Program Design

Conduct market research

Markets can vary. Some geographies have only small regional and custom builders, while others are dominated by large production builders. A strong home energy rater network may be present, or minimal to no rater infrastructure at all.

Consult the annual reports of top regional builders and national home builder publications for housing starts and typical builder size, type, and geographic distribution. (Two helpful resources are the ENERGY STAR Partner Locator — useful for finding local builders, developers, verification professionals, and sponsors — and this database of credentialed HVAC contractors in your service territory.) Determine the regional availability of key energy efficiency technologies (e.g., high-efficiency equipment, windows, etc.).

Assess local energy rating infrastructure

Energy Rating Companies (ERCs) are third parties that inspect homes to earn the ENERGY STAR. Some Utilities and Other Program Sponsors may need to establish a strong ERC network from scratch. Consult the ENERGY STAR Partner Locator for a list of ERCs in your area or nearby states.

Evaluate market capacity to verify HVAC system requirements

HVAC performance is critical to a home’s efficiency, comfort, and durability. The ENERGY STAR program has two tracks for improving HVAC performance, relying on trained Raters or HVAC contractors with a special credential.

Consult with local ERCs to search for Raters trained to assess HVAC systems. The Credentialed Contractor page also has a list of HVAC companies eligible to verify the installation of HVAC systems.

If talent is scarce, some Utilities and Other Program Sponsors may choose to invest in expanding the pool of trained Raters and/or credentialed contractors by offering incentives, training, and outreach. 

Benchmark construction practices

With experts from the rating community, compare ENERGY STAR standards with local practices around insulation installation, HVAC duct sealing, and other construction processes. Evaluate the cost of key energy-efficient technologies and construction methods and examine the rigor and enforcement of the prevailing energy code.

Identify potential barriers to program participation

Many markets have one or more of the following barriers to building more energy-efficient homes: 

• Industry resistance to change and concerns with risk,
• First-cost decision making which ignores utility cost savings and improved comfort, durability, and indoor air quality,
• Lack of experience or skills around selling energy efficient homes,
• Inadequate consumer awareness and demand, and
• Deficiency of technical infrastructure for construction and verification.

Conduct local market research and consider your overall objectives to develop a program that effectively addresses any barriers you may encounter. This Best Practices Checklist (PDF, 69 KB) offers some specific tips.

Program Implementation

Delivering a successful energy-efficient residential new construction program may include day-to-day administration, a strategic incentive structure, technical and sales training, a strong marketing and communications strategy, data collection and tracking, quality assurance processes, and continuous evaluation. 

Before launching your new energy-efficient residential new construction program, be sure to submit a signed Partnership Agreement and Commitment Form. Once you are a partner, you can create marketing materials with the ENERGY STAR logo and access useful resources for recruiting and training builders and raters. 

Marketing

Develop compelling messages that attract builder partners and build consumer awareness. For builder audiences, emphasize the value of the program against business objectives (e.g., market share, competitive advantage, reduced liability). For consumers, simplify the message to homeownership benefits (e.g., better homes for lower cost of ownership). 

Strategize where and how frequently to place your message (e.g., multiple advertisements  vs. single events). Take advantage of the polished ENERGY STAR marketing tools and materials, which can be co-branded with your logo.

Strategic incentive structures

Incentives can “jumpstart” program participation and, if strategically designed, create a healthy, self-sustaining market. Enticements can include direct monetary payments, such as rebates; indirect monetary assistance such as free ratings; or non-monetary assistance such as free training. 

The cash value of incentives offered for ENERGY STAR certified homes does not necessarily correlate with market penetration. Therefore, although incentives can influence the success of a program, other factors such as healthy competition between builders and raters, consumer education, and homebuyer demand are often equally if not more influential.
 

Training

Effective training can help establish viable energy rating infrastructure, prepare various local subcontractors for success, set clear expectations and requirements for builders, train sales agents and real estate professionals, and educate buyers on the benefits of energy-efficient homes. 

Trade allies are critical for success of your ENERGY STAR program. HVAC contractors, architects, insulators, and roofing and foundation contractors may need additional training to see value in the enhanced requirements of ENERGY STAR and adopt new practices correctly. As a sponsor of an ENERGY STAR Certified Homes program, you can:

• Deliver individual mentoring or group training on program requirements,
• Facilitate local training events through industry-recognized trainers, or
• Direct partners and allies to ENERGY STAR training materials to use on their own.

Communication strategy

Develop and nurture strong relationships with all program stakeholders (e.g., consumers, builders, home energy raters, HVAC contractors, real estate agents, appraisers, and related homebuilder and trade associations). 

Create procedures and expectations, involving stakeholders in important decisions and milestones, and periodically communicating through newsletters and e-mails. Be sure to allow long lead times, typically at least six months, to educate partners about upcoming changes to requirements or incentives. 

In the face of limited resources, identify respected “champion” builders whose participation will leverage the greatest growth and attract competitors to join.

Quality assurance protocols

Robust quality assurance oversight for building and rating practices is critical and helps to: ensure the integrity of the ENERGY STAR label; add an important additional layer of oversight beyond the quality assurance activities provided by the rating industry; promote a mature, self-sustaining high-performance building industry; ensure that participants are meeting program guidelines; confirm that incentives are being properly awarded; and ensure savings claimed are accurate.  

Key elements of a robust quality assurance protocol include:

• Participation agreements that clearly delineate expectations and requirements
• Incentive application review
• Data file review (including rating reports and inspection checklists)
• In-field inspections
• Corrective action process resulting in removal of non-compliant participants
• Training based on QA/QC findings

Measurement & Evaluation

By setting up, tracking, and regularly evaluating metrics of success, sponsors assess whether goals (e.g., actual energy savings, peak-demand reduction, cost effectiveness) are being met while improving the impact of incentives, home verification processes, training efforts, and marketing strategies. Sponsors can communicate critical performance metrics to regulators and rebalance investments to optimize future returns. 

The most successful programs evaluate performance against key savings and peak load reduction targets. Metrics can include: the number of homebuilder and rater program partners, the amount of new ENERGY STAR certified homes, measurements of peak energy use for certified vs. noncertified homes, and utility bills of certified vs. noncertified homes.