In the spring of 2017, ERS collaborated with Northeast Energy Efficiency Partnerships (NEEP) and Energy Future Group (EFG) to publish a market characterization report for ductless mini-split heat pumps (DMSHP) in the state of New York. ERS and its partners were tasked with providing the New York State Energy Research and Development Authority (NYSERDA) with a current baseline for DMSHP as well as an analysis of market activity. ERS addressed a variety of key topics, including market actor awareness of DMSHP, barriers to the adoption of DMSHP technology, customer motivations and satisfaction, market characteristics, and program intervention potential. NYSERDA hoped that this study would help them to create effective assistance for the adoption of DMSHP in New York.
The study’s primary research was conducted through interviews of three key market actors: manufacturers, distributors, and installers. Their responses supplied firsthand industry insight. Additionally, to further characterize the market, the study surveyed and analyzed other jurisdictions’ evaluations and DMSHP sales data from Heating, Air-conditioning and Refrigeration Distributors International (HARDI).
The published report described a diverse and nuanced market that is ripe for program intervention and has great potential for growth. With that said, there were a variety of barriers identified for DMSHP that included lack of consumer awareness/education, lack of installer awareness/education, limits to technology capabilities, inadequate controls, and upfront costs to customers. Interviews with market actors uncovered that customer awareness of DMSHP technology is low, but end users are still motivated to purchase the product due to the need for space cooling and heating, the desire to utilize “green” technology, and the goal to save money. Satisfaction with the product for those who installed DMSHP is very high. Installer awareness of DMSHP technology was also found to be average, but a deep, educated understanding of the technology is low to very-low on how/where to install, product benefits, how to sell, how to repair, and how to instruct customer usage. This barrier presents an additional issue in that improperly installed technology will not perform at its highest efficiency, limiting the savings returned to customers.
The identified barriers opened the door to suggestions for potential market intervention on multiple fronts, for example: creating better efficiency and installation standards, developing means for installer education and customer awareness, and providing incentives. The areas of potential market support stressed by market actors were customer incentives plus targeted marketing and public education to increase customer awareness, knowledge, and motivation to adopt DMSHP technology. Furthermore, targeted tech training for installers and architects/designers, specifically for multifamily and new construction, could contribute to improved performance of DMSHP and increased sales.
ERS and its partners concluded that in a market characterized by complex motivations for installation, limited general knowledge of the technology, and potential for improved growth there is great opportunity for stakeholders to take initiative to address barriers and come up with smart solutions. In the words of one interviewee, “Everyone has a role to play”.