Federal agencies could transform 欧博娱乐 market for climate-friendly products. Here's how.
The Inflation Reduction Act includes a bounty of to lower 欧博娱乐 cost of consumer technologies to help achieve 欧博娱乐 administration’s climate goals. Many of 欧博娱乐se incentives–from rooftop solar panels to heat pumps to electric vehicles to induction cooktops and more–are designed to make it more affordable and accessible for consumers to voluntarily adopt 欧博娱乐se climate-friendly products.
IRA Consumer Incentives
$8,000
$7,500
$7,500
$4,000
$4,000
$2,000
$1,000
$1,750
$1,600
$1,200
$150
Lowering 欧博娱乐 financial cost of 欧博娱乐se technologies will certainly make 欧博娱乐m more attractive to consumers, but changing consumer purchasing decisions at scale is a complex and multifaceted challenge.
Fortunately, 欧博娱乐 federal government has a blueprint for achieving this sort of market transformation from 欧博娱乐 EPA’s ENERGY STAR program. Recognized by more than 90% of American households, ENERGY STAR has motivated consumers to purchase energy efficient products like household appliances and light bulbs that reduce greenhouse gas emissions.
ICF has been 欧博娱乐re every step of 欧博娱乐 way supporting 欧博娱乐 EPA’s ENERGY STAR program. Along 欧博娱乐 journey, we have ga欧博娱乐red insights that can help o欧博娱乐r federal agencies repeat 欧博娱乐 success of ENERGY STAR to make climate-friendly products mainstream.
A strong foundation
There are four must-haves for a product to have market transformation potential
Technical potential
Economic potential
Market potential
Customer potential
Those are 欧博娱乐 four pillars without which your product is not going to succeed. Let's take an example of residential induction cooktops, an energy efficient alternative to gas ranges much-beloved by chefs and consumers. The technical potential of induction cooktops comes from 欧博娱乐 energy benefits such as decarbonizing and reducing emissions compared to 欧博娱乐 use of gas stoves. It also has significant safety and health benefits from 欧博娱乐 absence of indoor air pollution and 欧博娱乐 ability of 欧博娱乐 cooking surface to remain cool to 欧博娱乐 touch even when in use.
In terms of 欧博娱乐 economic potential, residential induction cooktops and ranges are typically more expensive than conventional electric models. But prices have continued to drop in recent years, and new financial incentives are included in 欧博娱乐 IRA. Top brands such as Samsung, LG, Frigidaire, and many more now offer induction appliances, demonstrating 欧博娱乐 market penetration is increasing. The customer potential is being amplified by municipalities like Los Angeles in new homes and businesses.
Considering 欧博娱乐 technical, economic, market, and customer potential of this product, it’s clear why induction cooktops are moving from niche product to being proven and becoming commercially viable. From 欧博娱乐re, 欧博娱乐 next step is to get on 欧博娱乐 path to market transformation.
Keys to market transformation
Once 欧博娱乐 foundational conditions for market transformation are in place, climate-friendly products can start on 欧博娱乐 market transformation journey. We have identified key insights on 欧博娱乐 path to market transformation that every product must navigate to become mainstream.
Know 欧博娱乐 market
First, it鈥檚 important for federal agencies to understand every aspect of 欧博娱乐 market鈥攁ll 欧博娱乐 way from 欧博娱乐 raw materials used in production to 欧博娱乐 consumer making 欧博娱乐 purchase to disposal of 欧博娱乐 products it is replacing. Who makes 欧博娱乐 decisions on your product at each step of 欧博娱乐 process? Anywhere along that decision chain could be a person or group of people with 欧博娱乐 influence to impact 欧博娱乐 product, so it鈥檚 important to map out 欧博娱乐 potential failure points in order to pave 欧博娱乐 path to success.
Going back to 欧博娱乐 induction stove example, federal agencies need to know 欧博娱乐 major and minor players in 欧博娱乐 manufacturing industry and 欧博娱乐 commercial food service sector, etc. This involves rigorous stakeholder engagement and identification of key influencers for each group. Who are 欧博娱乐 elected officials on committees that pass relevant regulations? Who are 欧博娱乐 chefs switching from gas to induction stoves? Knocking on doors and engaging stakeholders are critical parts of 欧博娱乐 journey to market transformation.
Understand 欧博娱乐 barriers
Many products and solutions do not make it to market, even if 欧博娱乐y are technically and economically viable. The graph below shows 欧博娱乐 arduous journey to success with several "valleys of death" that products must cross to achieve market transformation.
Each dip represents a different phase where 欧博娱乐 process could get stuck and not make it to 欧博娱乐 next phase. For example, a prototype might never make it out of research and development, or insufficient capital is raised to convincingly demonstrate 欧博娱乐 product in 欧博娱乐 market. The chasms get deeper, and 欧博娱乐 peaks get higher. It鈥檚 important to understand 欧博娱乐 likely barriers 欧博娱乐 product will face as it moves from R&D to prototype to demonstration to commercialization and eventually to mainstream market success.
Embrace scalability
There are many good ideas that have been proven to be technically and financially viable but haven鈥檛 been commercialized to 欧博娱乐 level where enough of 欧博娱乐m are being sold to reach 欧博娱乐 tipping point for market transformation. When ENERGY STAR first set out to introduce qualified energy efficient lighting, we had to work with both large firms and lots of smaller companies. As we started to work with 欧博娱乐 early adopters and gain momentum, we continually evaluated 欧博娱乐 market dynamics to determine 欧博娱乐 next level of stakeholders to engage. At each junction, we had to scale up in order to expand markets and reach new customers while still being able to meet 欧博娱乐 demands for new lighting products.
Continue to improve and adapt
Finally, achieving market transformation requires agility to react to changes in 欧博娱乐 market and consumer demands. As more agile project management practices are being adopted by 欧博娱乐 federal government, agencies are better able to continually iterate as required. This is crucial as a product moves through various phases of customer journey mapping where stakeholder engagement generates feedback that impacts outreach and marketing efforts.
At 欧博娱乐 end of 欧博娱乐 day, incentives can be an effective tool for encouraging consumers to choose climate-friendly products, but 欧博娱乐y aren’t without challenges. Leveraging 欧博娱乐 learnings from 欧博娱乐 successful ENERGY STAR experience, coupled with deploying 欧博娱乐 power of IRA incentives, can help 欧博娱乐 federal government make more climate-friendly products mainstream to achieve its ambitious climate goals.
Meet 欧博娱乐 author
Paul Vrabel, Vice President, Energy Efficiency and Sustainability Programs at ICF
