Free home energy upgrades (for profit)

FreeHomeUpgrades

Part one of a two-part post series based on Brand Cool’s conversation with Claire Tramm, one of the most daring energy efficiency innovators out there and the CEO of Effortless Energy, a Chicago-based home energy performance company. Part two will focus on the implications of Effortless Energy’s model for energy efficiency program marketers everywhere.

Claire Tramm must go through a lot of lip balm, because she spends a lot of time staring into the windy chasm beyond the bleeding edge of home energy performance.

I caught her presentation during a plenary session at this year’s MEEA conference and was struck by her and cofounder Matt Gee’s vision for their company, Effortless Energy, which offers a turnkey service that exemplifies the growing trend of private, for-profit companies stepping into the home energy performance marketplace. Claire was gracious enough to get on the phone and tell me more about her company’s approach to selling energy efficiency, why it’s different, and why it works.
WHAT’S DIFFERENT ABOUT EFFORTLESS ENERGY
Perhaps the most notable difference between Effortless Energy and a typical home performance program is in product positioning. Public sector and utility home performance programs typically market home energy upgrades as a set of energy-saving improvements you make to your home—the kind that require you to either pay thousands of dollars upfront or take on a loan in return for energy savings over time.

Instead, Effortless Energy sells energy efficiency as a service focused on adding value for the customer. Even better, by taking cues from the power purchase agreement and on-bill financing models, Effortless Energy is able to offer its services for free (in this case, meaning no upfront charge) and then make money by sharing in its customers’ energy savings. This process is explained elegantly on Effortless Energy’s website. It’s bone simple and groundbreaking.

“Why are we looking at energy efficiency programmatically instead of creating a product that people actually want and marketing it in a way that they want?” Claire said. “Most energy efficiency programs don’t offer the sort of market-driven solutions that solve the customer’s pain points and build a process around the customer’s needs.”

HOW IT WORKS
At every step, Claire, Matt, and their team crafted Effortless Energy to take the, um … effort out of the usually laborious process of upgrading a home’s energy performance. To give a sense of how it works, let’s take a look at the process from the customer’s perspective (I’ll call her Betty):

  • Betty visits the Effortless Energy website, where she shares her contact information and answers a few basic questions about her home and energy use.
  • Betty gets a phone call to set up a time for one of Effortless Energy’s Energy Geniuses (a.k.a., their technicians) to perform a walk-through assessment of her home.
  • The Energy Genius gathers more detailed information on Betty’s home and its energy use (e.g., what kind of furnace does it have?) and inputs data into Effortless Energy’s cloud-based energy modeling app.
  • The app generates a tailored package of cost-effective home upgrade recommendations (using back-end software wizardry to factor in things like historic energy use and weather data).
  • The Energy Genius is then able to sign up Betty right on the spot for a service agreement where she’ll be billed monthly based on realized energy savings. However much Betty saves on energy (relative to how much she would have spent pre-upgrade), Effortless Energy bills for a portion of this—guaranteeing that Betty sees a financial savings immediately.
  • Betty pays a bill and saves energy; enjoys a more comfortable, easier-to-control, more valuable, healthier, and greener home; and lives happily ever after.

THE BRILLIANCE OF KEEPING IT SIMPLE
The grunt work is notably absent from Betty’s upgrade process: surfing muddled energy program websites, applying for program assistance, dealing with financing (and the stack of paperwork typically associated with it), mulling a multi-page scope of work, haggling with contractors, and writing a big check of any kind.

From Claire’s perspective, this remarkable simplicity stems from a single, basic assumption: Effortless is responsible for making energy efficiency happen, period.

“It’s on us to deliver the energy savings,” Claire told me. “Customers just pay us per unit of energy saved at a rate lower than what they would be paying to use that energy, so they start winning on day one. The work, the risk, the diagnostics, and the analytics go to us, the service provider. The customer just pays for the service of having energy efficiency out of the actual savings it creates and at the same time reaps all the home comfort, remote controllability, value, and health benefits that energy upgrades provide.”

But what about the financing, program incentives, quality assurance, etc.? They’re all in there. Effortless works with whatever program funding is available, factors incentives into each project, handles financing, and manages QA by analyzing data from customers’ smart thermostats, which Effortless installs as part of its home upgrade package. The customer gets all the perks and none of the hassle.

WHAT DOES IT ALL MEAN?
Businesses like Effortless Energy have important implications for the future of utility and public energy efficiency programs. Stay tuned to this blog for our second post discussing how progressive energy efficiency business models can shape the way we think about and facilitate energy savings.