Wednesday 20 June 2012

Less is (worth) More – Why House Builders should be Selling Sustainability

“Housebuilders could make more money if only they properly sold the lower running costs of new homes to their customers.”

So says a recent report from the influential NHBC Trust, Today’s attitudes to low and zero carbon homes, which shows how house-builders are losing out because they lag behind their customers in their views on energy efficiency and renewable energy.

It’s an impressively thorough piece of research, based on a large number of interviews with the general public and group sessions with occupants of new and low-energy homes.  The report is full of information on current attitudes and views towards energy efficiency, renewables and buying homes.  Knowing that all readers of the solarblogger are important and busy people, who might struggle to find the time to digest the whole 130 pages, here are some key points from the report.

Energy Matters

People are becoming more and more aware of energy costs and their impact on the environment.  Fully 96% of people surveyed said that their energy costs were important to them, 65% saying they were very important.

Surveying people who had moved into new homes, an overall majority said that the energy efficiency features made the home more attractive.  Those living in homes that had been built to a higher level of energy efficiency placed even greater emphasis on this.

People will pay

The house-building industry has been so concerned about the additional costs of building to higher levels of energy performance, it is missing out on an opportunity.  The survey indicates very strongly that energy efficiency does influence people's buying decisions.  Rather than seeing energy efficiency measures as a costly inconvenience, house builders could turn this on its head and promote the benefits to prospective customers.

Energy efficiency was the equal sixth most important factor in choosing a home to buy or rent.  Although location, number of bedrooms and other traditional factors achieved higher scores, energy efficiency still achieved a score of 3.7,  with 1 being not at all important and 5 being very important.

One of the most surprising outcomes from the study is illustrated in the chart below.  When asked the question "If the price of an energy-efficient home were £10,000 more than another similar home that was not so energy-efficient, but it offered to save you £750 a year on your energy bills compared to the other home, would you consider paying this?", 69% of people said yes.

The chart also shows the breakdown by age group, with younger (first time) buyers being more likely to be attracted to an energy efficient home.  However, in all age groups the majority would consider paying more for a home that saved them on energy bills.

It is possible that the forthcoming Green Deal will make the value of energy efficiency even more evident to people.  The cost of insulating a solid wall property to achieve performance approaching that of a new home is around £12,000.

People Place More Value on Familiar Technologies

Solar panels (both solar heating and solar electric) and low-energy lighting are the energy saving features with the highest awareness among buyers - 84%.  Awareness falls quickly for other energy generating technologies such as heat pumps - 31% and mechanical ventilation with heat recovery (MVHR) - 17%.

High awareness feeds through into desirability (with the exception of wind turbines).  The chart below shows which eco-features are the most likely to make a new home attractive to a potential purchaser.

Tips for Marketeers

1. Avoid confusing terminology 

People overwhelmingly preferred the term Energy-efficient home to Eco-home, Zero-Carbon home or Green home. Green or Eco was thought to convey the impression of alternative, ultra-modern home with non-traditional materials. Zero carbon causes doubts whether anything can be truly zero-carbon.

Confusing or Negative Associations
More Positively Received
Zero-carbon home
Green home
Energy efficient home
Draught-free and warm
Grey water recycling
Waste water re-use for toilet flushing
Biomass boiler
Wood chip/pellet burning boiler
Mechanical Ventilation and Heat Recovery
System for introducing fresh air from outside while retaining the heat from expelled air
Solar Thermal
Solar heating
Solar electric

2. Emphasise the energy savings

The survey found that people were motivated towards energy efficiency mainly for the positive impact it has on their household finance.  Protecting scarce resouces came second and helping combat climate change came a distant third.

Marketing should emphasise the financial benefits of living in a new home relative to other choices, with simple comparisons that make the savings clear.

The survey showed that people are confused about the sources of CO2 emissions, with many not rating energy use in homes in the top three sources.  Industry, cars, planes and even livestock were often selected ahead of homes. If people were aware that housing accounts for 30% of energy use and more energy is used in housing than in industry, road transport or aviation, this might influence their buying decisions.

3. Choose visible technologies 

A home with visible technolgies such as solar panels gives the sales team a hook on which to hang the many other features (such as higher levels of insulation and draught-proofing) which are not so evident to a buyer viewing a property. 

4. Choose technologies to meet targets that buyers find attractive

Some technologies clearly are more attractive to buyers more than others.  The cheapest option for achieving compliance with building regulations may not be the most attractive to prospective buyers.  Homes with more attractive packages of energy efficiency technology may sell more quickly or achieve higher prices than those that are simply cost-optmised to meet regulations.

5. Consider offering enhanced efficiency as a cost option

When selling off plan it is common to offer better kitchens, or bathrooms or other features at an extra cost.  Why not give the customer the option to increase the energy efficiency of their home beyond regulations to lower their bills further?  For example, meeting regulations with a solar heating system, but offering the option to add a solar electric system alongside.


"People won't pay for all this stuff"

House builders often claim that their experience is that people won't pay more for homes with "eco-features".  They might say they will (perhaps to market researchers compiling reports), but when it comes time to sign the cheque they won't spend the money.

But have they really tried to sell efficiency?  Are the sales people knowlegeable about the features and benefits?  Does the marketing material explain the features in simple terms and the benefits in a meaningful way?  Has the package of energy efficiency technology been chosen to appeal to buyers?

Please add your thoughts and comments below.