Up, Down or Midstream Incentives?

Offering coupon-based or point-of-sale discounts on energy-efficient consumer products is a tried-and-true method for program administrators to achieve energy savings. Yet, increasingly, administrators are asking whether mid- and upstream approaches might be more effective.

Recently, Efficiency Nova Scotia retained Dunsky to conduct research into the feasibility, benefits, and opportunities for developing midstream and/or upstream pilot programs, i.e. programs in which incentives are provided to retailers or manufacturers rather than end-users.

By reviewing a range of best-in-class programs across North America, our team identified what makes mid- and upstream programs successful. It turns out that these strategies are particularly effective for products that consumers are less familiar with. In other words, products for which they are more inclined to ask questions – and seek the recommendations – of store salespeople. This means that a one-size-fits-all approach for instant savings programs may not be the most effective way to achieve energy savings.

One of the outcomes from this research is that mid- or upstream incentives may not be the best model for many lighting products. Rather, they can be more valuable for big-ticket items or for products that have a wide variety of features/options from which to choose from (such as TVs or larger appliances).

Of course, each location is different. Still, the Dunsky team looks forward to adapting these findings to other DSM programs, ensuring that we continue to offer programs that meet both customers’ and program administrators’ needs.