Incentives distorted business strategy

The locus of decarbonizing homes is the relationship between an HVAC contractor and the homeowner. We call this ‘The Church of the Kitchen Table’

Presently, all may not be well at This ‘Church of the Kitchen Table’. For one, the relationship has a lot of friction, because homeowners usually want the cheapest piece of equipment installed as fast as possible. Contractors - knowing this - have built a business model around turning a quick sale using only equipment they are familiar with. And when utility or government incentive programs layer on top of this, they end up simply adding more friction to this process by narrowing the solution space and giving homeowners and contractors yet another element to grapple with at the kitchen table.

The kitchen table transaction is also fragile - because of a deficit of trust. Homeowners - worried about being upsold through aggressive sales tactics - respond poorly to contractors that might recommend low-carbon equipment, especially when there’s a price difference heatpumps and air-conditioners or a standard gas-furnace. Meanwhile contractors are reluctant to recommend low-carbon systems, because they do not want to be held liable for failure of equipment that they might not be as familiar with.

Therefore, a shared goal between policymakers and HVAC contractors can be - reducing the friction and fragility at the kitchen table. One way of achieving this goal is for HVAC professionals to pivot from the volumetric sales oriented process - to a more diagnostic or consultative business model.

Some discussion questions fellow Boundary Spanners: 

• What do policy interventions look like for improving trust between parties at the kitchen table? What upstream incentives can make heat-pumps the status-quo installation?
• What is the role of policy in supporting HVAC professionals that are seeking to pivot to a consultative business model?
• Who are the early adopters that are building successful business models around electrifying and decarbonizing homes across US and Canada? How can policy support their work and how can their success be replicated and scaled? What lessons can we learn from their experience and how can such learning be mobilized to help transform HVAC industry or inform consumers?

Boundary Spanners is a podcast and a blog on residential decarbonization by Nate (@energysmartohio), the “blue-collar” CEO of HVAC 2.0 and Abhi (@akantamn), a “white-collar” policy researcher based in Canada. Nate and Abhi are taking tacit (unspoken) knowledge in the white and blue collar worlds and making it explicit (out loud) for residential decarbonization. Follow Boundary Spanners on Youtube (show), Substack (blog) or wherever you get your favorite podcasts from.