Post on 31-Mar-2015
EQuilibrium*HEALTHY HOUSING FOR A HEALTHY ENVIRONMENT
Qualitative Consumer & Industry Market Research
October 2006
* EQuilibrium is an official mark of CMHC
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Outline
Background and Objectives Existing Programs and Previous Research Approach Results of Consumer Focus Groups Results of Industry Interviews Implications
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Background and Objectives
Goals of the EQuilibrium Initiative are to: Develop a clear vision and approach to achieve high quality,
Healthy HousingTM and sustainable communities across Canada Increase the national capacity of Canada's housing and renewable
energy industry sectors for the long term delivery of zero impact sustainable housing in all regions of Canada
Foster market awareness, acceptance and delivery of Healthy HousingTM and sustainable communities
Enhance Canada's domestic and global leadership in sustainable residential community design and development, leading to Canadian business opportunities in international markets.
EQuilibrium concept is based on five key principles that guide the design and construction of sustainable housing and communities: Health, Energy, Resources, Environment, and Affordability.
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Background and Objectives
Objective of the market research was to inform a marketing strategy by: Assessing overall interest Determining which benefits and features are most appealing Identifying key factors impacting acceptance Obtaining input into development of value proposition Exploring perceptions regarding brand positioning
Targeted early adopters pre-disposed to invest in energy efficiency and environmental features
Focus on initial market introduction - after the first demonstrations
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Approach
Background Paper Lessons from existing programs and previous research
Consumer Focus Groups 6 cities (Toronto, Calgary, Whitehorse, Vancouver, Montréal,
Halifax) 2 sessions in each city (5-9 participants per session) Participants recruited to fit early adopter profile 90 participants (47 Women, 43 Men)
Industry Interviews 11 builders participated (3 AB, 2 BC, 2 ON, 3 QC, 1 MB) Mix of custom and mass market builders
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Observations drawn from various sources Characteristics of Early Adopters
Consumers are buying their second or third home; they are more educated than the average; they have higher incomes; and they report adopting other environmental habits (e.g. recycling, using transit, etc.)
Builders are often smaller custom builders; however mass market builders may also be interested under the right circumstances
Features and Benefits that Resonate with Consumers Most important features are: overall construction quality; energy
efficient or renewable energy features (windows, high-efficiency furnace, solar PV, etc.); indoor air quality (IAQ); and location.
Most important benefits are: saving energy costs; durability; less maintenance; good neighbourhood; reduced environmental impact.
Existing Programs and Previous Research
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Features and Benefits that Resonate with Builders Most important benefits are: keeping up with latest technology;
brand differentiation; responding to consumer demand for better quality and lower operating costs.
Environmental and energy features must compete with luxury features but even so many builders intend to implement more of the former.
Most popular features are: windows; furnaces; water heaters; toilets; air tightness; insulation.
Less popular are advanced features such as solar PV.
Factors in Acceptance of Energy Efficient Housing For home buyers, key incentives are: energy and cost savings;
quality; uniqueness of design; indoor air quality; security of supply. For home buyers, key barriers are: initial cost; maintenance issues
and competition with other features.
Existing Programs and Previous Research
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Factors in Acceptance of Energy Efficient Housing For builders, key incentives are: product differentiation; keeping
up with technology; message of quality; brand recognition and reputation.
For builders, key barriers are: lack of consumer demand; overhead costs of certification programs; technical and regulatory difficulties with grid connections; risks of non-performance.
Existing Programs and Previous Research
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Canadian Programs R2000 – Limited acceptance with mass builders – primarily
because of risk associated with pass-fail nature of the program, cost and complexity. However the brand is well known by builders and continues in several provinces.
EnerGuide for Housing - Not a building program but a rating scheme. Level of interest has been good and is growing – perhaps seen as indicator of quality.
Energy Star (ON), Novo-Climat (QC), Built Green (AB, BC), Power Smart (MB) - These programs have replaced R2000 as the premium program in selected provinces (they are generally less demanding). They are achieving significant success, almost breaking into mass market. Overall trend towards standardization and quality control may be factors.
Healthy HousingTM – awareness of program is generally low.
Existing Programs and Previous Research
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U.S. Energy Star – Has been successful in becoming the national
standard. Factors in success include: quality; strict standards; partnership with established organizations; incentives; marketing; technical assistance; and training. Note: standards are lower than in Canada.
Building America is responsible for the “Towards Zero Energy” program – Successes include involvement of industry members and recruitment of mass market builders to pilot the concept.
Japan Market is more advanced due in part to broad acceptance of grid
interconnection and time-of-day pricing. Other factors include marketing that focuses on cost-performance and quality; mass production with customization options; brand name associations with well-established companies.
Existing Programs and Previous Research
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Results of Consumer Focus Groups
Perspectives on Energy Efficiency and Healthy HousingTM Consumers were aware of a myriad of technologies, appliances,
materials, equipment and best practices to save energy, improve indoor air quality and reduce environmental impact.
Some of the most common mentions included energy efficient light bulbs, insulation and energy efficient appliances - Participants quickly focused on specific energy saving products that they owned or had heard of with a focus on saving money on utility bills.
They had some idea of renewable energy technologies but were vague on technology details and are confused by terms like passive, PV, etc.
They recognized there is a responsibility to future generations. They expect government to lead but a few were sceptical or
cynical about government intentions/capabilities.
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Results of Consumer Focus Groups
Awareness of Other Programs Widespread familiarity with Energy Star (but mainly appliances). About half were familiar with EnerGuide (though more in relation
to equipment). Many (but less than half) knew of EnerGuide home inspections
(few knew the name). Many (but less than half) knew of One-Tonne Challenge. A few knew of R2000 but vague on details. Many knew of regional programs (B.C. Hydro, Hydro-Québec,
Energy Solutions in YK, Novo-Climat in QC). Few were familiar with Healthy HousingTM. Overall low awareness of program names – but some awareness of
specific products (e.g. B.C. Hydro giving away energy efficient light bulbs).
Most felt that motivation for these programs was combination of saving $ and protecting the environment.
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Results of Consumer Focus Groups
Initial Reaction to EQuilibrium Concept Strong interest and curiosity. Sounds “too good to be true”. Widespread view that this will be expensive (perceived high cost of
renewable technologies, experience with the high cost of home renovations).
People want more information (e.g. will it really work; cost and savings; what would it look like?).
Widespread concern (especially in Toronto, Montreal, and Vancouver) that it would only be applicable to new, suburban developments.
Would this be applicable to retrofits of existing homes? Renewable energy and grid connection sounds intriguing – how
would it work? Will it require the occupants to make significant changes in their
lifestyles?
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Results of Consumer Focus Groups
Key Benefits (Top Three by City)
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Calgary Halifax Montreal Toronto Vancouver Whitehorse
Wei
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Vo
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Lower energy bills
Healthier living
Reduced pollution
Reliable energy
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Results of Consumer Focus Groups
Key Benefits (Overall)
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100
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Lower energy bills Healthier living Reduced pollution Reliable energy Greater comfort Affordable
Wei
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Vo
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Results of Consumer Focus Groups
Key Benefits Though not on the list, quality of construction was of very great
interest. Men tended to focus on the cost savings. Women tended to focus on health benefits (e.g. reduce allergies
and asthma) first and then linked these to environment benefits. Calgarians made the link not just to environment but to resource
conservation (anticipating future scarcity). Participants in Whitehorse and Halifax had more interest in
security/reliability of energy supply given more frequent blackouts. There was some confusion about liveable neighbourhoods with
many wondering how this was related.
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Results of Consumer Focus Groups
Key Features (Top Three by City)
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Calgary Halifax Montreal Toronto Vancouver Whitehorse
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Sustainablecommunity design
Renewable energysystems
Energy and resource-efficient construction
Climate specificdesign
Natural daylighting
Energy-efficientappliances andlighting
Water coservationand re-use
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Results of Consumer Focus Groups
Key Features (Overall)
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Renewableenergy
systems
Energy andresource-efficient
construction
Climatespecificdesign
Naturaldaylighting
Passive solarheating and
cooling
Watercoservationand re-use
Energy-efficient
appliancesand lighting
Sustainablecommunity
design
Land andnatural habitatconservation
Indoor AirQuality
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Results of Consumer Focus Groups
Key Features There was great interest in the possibility of residential renewable
energy systems but a general lack of understanding of what the different systems were (e.g. PV, geothermal).
In Calgary and Whitehorse, climate-specific design resonated well. In Vancouver, participants were more sceptical of solar energy
(not enough sun). None of the features were perceived as negative but there were
questions about scope of water reuse. People liked the idea of liveable neighbourhoods but either did not
see how it applied to individual homes being “net zero” or they were sceptical that it might be too utopian.
Low interest in IAQ features seems to contradict high interest in benefits related to healthier living.
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Results of Consumer Focus Groups
Financial Barriers & Solutions Expectations are that houses will cost 25-100% more ($50-200K). Most believe costs will come down over time but that it will take 20
years or more before it becomes available for the mass market. People willing to pay more if savings justify it - general willingness
to pay $15-20K more – some would go as high as $50K. Some wondered if savings would depend on extensive lifestyle
changes. Some were concerned about finding the extra up-front capital
even if it could be shown that the savings justified it. When informed that cost might be $10-30K more, people were
surprised – some accepted it, others remained sceptical and wanted to know how. Most felt that if the added cost of a EQuilibrium house was that low, they would consider buying one if they were in the market.
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Results of Consumer Focus Groups
Financial Barriers & Solutions Most want to see evidence of both costs and savings – need to
publish detailed financial information. Many suggested a need for government subsidies – at least in
beginning (e.g. reduced CMHC mortgage insurance rates, property tax rebates, etc.). Also interest in cost savings guarantees.
People in Halifax and Whitehorse were less concerned about cost. It was suggested that application of the concept to multi-unit
residences would help spread the costs and lower the cost per unit.
Some suggested obligatory disclosure of energy costs for all house sales.
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Results of Consumer Focus Groups
Other Barriers & Solutions Reliability, durability and maintenance - Suggested building model
homes - Get personal testimonials - Provide information, clarify benefits, costs and risks.
Willingness/ability of contractors to build quality - Change building codes to enforce higher standards - Provide guarantees on materials, systems, etc.
Location and availability of land - Provide different types of models (e.g. multi-unit models, in-fill models).
Aesthetics not a significant barrier. Most (but not all) thought Government involvement would provide
greater confidence. CMHC has a good reputation and the CMHC imprimatur gave added credibility to the concept.
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Results of Consumer Focus Groups
Program Positioning Most participants thought the energy component and the Healthy
HousingTM component should have equal weight. There were mixed views on the “net zero energy” aspect – some
thought it would sound too good to be true – some thought it sounded too much like accounting – some thought it might be useful if it could be achieved – many thought it sufficient to focus on very low energy use.
Most frequent suggestions for marketing were: home shows/exhibitions, articles in magazines, internet, brochures in banks and real estate agencies. Several participants suggested sponsoring a TV series or a documentary.
Some felt program needed to leverage existing programs and names (e.g. Energy Star, Novo-Climat).
Others thought it should be a new name: focus on health, on environment, on energy, on costs, on future generations.
Quick suggestions included: “smart”, “enviro”, “natural”, “R3000”, “total energy”.
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Results of Industry Interviews
Profile of Participants Build between 5-1200 homes/year. ¾ are focused on single detached market. 50% are custom builders; 30% are mass market; remainder are
both. 90% consider themselves “green builders”.
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Results of Industry Interviews
Market Trends Demand exceeds supply – consumers want larger, more luxurious
homes on smaller lots – some energy efficiency is expected. Main innovations are: more integrated designs, better materials
and more efficient systems, beginning to see more ground-source heat pumps.
New building codes in some provinces, municipal interpretation varies.
Energy price increases not yet fully transmitted to consumers in many provinces.
Shortage of building lots is squeezing builders. Interest in higher density urban construction is beginning to grow. Premium energy efficient programs are catching on.
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Results of Industry Interviews
Participation in Current Programs Most common are R2000 and provincial equivalents. Key reasons for participation: build reputation; lead the
competition; improve brand recognition. Not yet translating into market share or profit, consumers not yet
demanding these programs in large numbers, but builders do expect to eventually measure success in terms of increased sales.
Many participate because it is the right thing to do and they get satisfaction from building a quality product.
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Results of Industry Interviews
Current Product Positioning Products feature both energy efficiency and Healthy HousingTM
attributes as very important. Key messages are: quality; cost performance; green product;
benefits of third party certification (i.e. assurance of quality). Key promotional channels are: verbal discussions with buyers (by
far most important); features in promotional materials; websites.
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Results of Industry Interviews
Promotion of EQuilibrium - Key messages should be: quality cost performance third party certification green product specific features (e.g. renewable energy systems) These are not substantially different from current messaging but
may be different in degree – other factors such as off-grid reliability are not considered important
Features that Resonate - Most attractive are likely to be: IAQ features Renewable energy systems Energy efficient appliances and lighting Home as a complete integrated system
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Results of Industry Interviews
Barriers Biggest barrier remains the up-front cost Perceived risk (complexity of systems, performance and durability)
in particular as it relates to the renewable energy systems Utility regulations re: grid connections Municipal inspection practices and expectations (i.e. awareness
and understanding of improved designs) Solutions include
Improved financial incentive through appropriate pricing of energy Need ongoing institutional/government support for innovation and
market introduction Build awareness and understanding of municipalities Develop framework for third party verification Need subsidy and marketing assistance for early stages
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Results of Industry Interviews
Value Proposition – needs to be based on Stay ahead of the technology curve Improve product quality Improve brand recognition Establish market share in new niche area Ultimately there will have to be an expectation of increased sales
Program Positioning There were no dominant themes Some suggested associating with brands for existing programs
(e.g. Built Green, Novo Climat, etc.) Others suggested associating with larger concepts such as “One
Planet Living”
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Comparison of Focus Groupsand Interviews
In most respects, builders have correctly assessed the perspectives of consumers and views are consistent Key benefits (quality, cost performance, healthy living, green
product) Key features (renewable energy systems, energy efficient
construction) Key barriers (price, risks)
Some differences Although consumers rated healthy living highly as a desirable
benefit, IAQ features did not resonate with them – builders thought it would
Consumers doubt industry’s capacity to deliver these products Many consumers believe that governments should regulate
EQuilibrium-like standards for all housing
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Implications
Interest is there among both consumers and builders Target:
Mass market Should give equal or more attention to high density development
in the urban core as well as single detached homes in greenfield areas
Need to design product to provide seamless transition from traditional design in both form and function
Product Positioning: focus on… Quality of construction (link to third-party certification) Cost savings Healthy living Reducing pollution “Not as expensive as you might think”
Features: highlight… Renewable energy systems Integrated “whole house” design
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Implications
Overcoming Barriers: Scepticism regarding costs and savings Provide demonstrations Make detailed technical and financial results widely available Arrange testimonials and third-party coverage (e.g. selected
periodicals)
Overcoming Barriers: Concerns about reliability and durability, maintenance, etc. Provide access to model homes Arrange testimonials Provide guarantees
Overcoming Barriers: Concerns about contractor capabilities and trustworthiness Need government sponsorship and oversight in early market
penetration period
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Implications
Overcoming Barriers: High Initial Costs Encourage provinces/utilities to price energy appropriately Encourage provinces to raise minimum performance standards for
all housing Consider financial incentives – if/when needed to facilitate early
adoption Overcoming Barriers: Regulatory Barriers
Facilitate resolution of grid connection issues with provinces/utilities
Facilitate resolution of municipal inspection issues in cooperation with FCM
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Implications
Value Proposition (Consumers) - For minimal extra cost up-front, EQuilibrium will deliver: Significant cost savings Improved construction quality A healthier indoor environment Equal or better convenience, comfort, aesthetics
Value Proposition (Builders) - For modest investment in improved design, materials, craftsmanship, and renewable energy systems, EQuilibrium will deliver: Significant early share in a growing market Head start on the competition Enhanced reputation for quality and brand recognition Understanding and experience with key emerging technologies Increasing sales
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Implications
Program Positioning Give equal weight to energy and Healthy HousingTM Focus on ultra-low energy use and on-site green energy
production – as opposed to “net zero energy”
CMHC as facilitator Sponsor demonstrations Lead marketing (home shows, media, etc.) Facilitate process of overcoming barriers Information clearinghouse