International Construction Specialty Conference of the Canadian Society for Civil Engineering (ICSC) (5th : 2015)

Value-oriented approach to home energy assessment process design Wu, FuJu; Riley, David R.; Leicht, Robert Jun 30, 2015

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5th International/11th Construction Specialty Conference 5e International/11e Conférence spécialisée sur la construction    Vancouver, British Columbia June 8 to June 10, 2015 / 8 juin au 10 juin 2015   VALUE-ORIENTED APPROACH TO HOME ENERGY ASSESSMENT PROCESS DESIGN FuJu Wu1,2; David R. Riley1; Robert Leicht1 1 Department of Architectural Engineering, the University of Pennsylvania, USA  2 fuw109@psu.edu Abstract: While significant investments have been made to advance energy auditing methods to reduce energy consumption in the residential sector, homeowners are still challenged to take action and realize energy savings on their utility bills. Key challenges facing homeowners in need of energy efficiency improvements were found to be: 1) lack of information, 2) lack of financing, and, 3) lack of skilled workforce (2009 CEQ report).  Recent research examining home energy auditing has revealed significant process waste, including audits that do not lead to energy upgrades; distrust between auditors and homeowners; a tendency for audits to lead only to one time improvements as opposed to continuous improvement. In response, variable types of home energy audit practices and strategies are emerging, including standardization of training and rating programs, as well as alternative methods to lower the costs of audits through partial “assessments.”  This research takes a value-oriented approach to study the energy audit process of residential homes, and seeks to elevate the effectiveness and efficiency of home energy assessments through process design.  The objectives of this research are: 1) To characterize “on-site” value delivery during a 90 minute home energy assessment, 2) to present relationships between building trust and deliver value via a model, and 3) to explore how these trust-value relationships influence homeowners’ decision making to take action in a manner of home improvements. In addition to home energy audit sectors, elevation of value distribution and trust relationship in a productive process, not only enhance distributing characterized value during operation, but also increase identification of linkages between specific tasks and the accumulation of trust leading to action on behalf of participants in the design and construction industry.     1 INTRODUCTION  The purpose of a home energy assessment process is to identify and prioritize opportunities to improve energy efficiency in a manner that leads to action on behalf of the home occupant.  Challenges facing the home energy assessment process include information barriers, available finances to invest in energy upgrades and trust relationship (Palmer, Walls, Gordon, & Gerarden, 2013). Past approaches in addressing these challenges have included homeowner outreach and education programs, weatherization training programs, and standardization of methods to characterize home energy assessment methods.  Many of these approaches focused on the physical characteristics of homes, instead of occupants conditions. Opportunities exist to improve assessment processes, based on unique conditions in homes and homeowners, in a manner to generating value for both homeowners and energy efficiency service providers.  Womack and Jones (J.P Womack & James, 2006) define value as: “a capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer.” Unlike objective characters of products, the provision of services has a nature of intangibility.  Customers often have little idea what to expect until they consume it, and typically perceive a service as a risk. Research into the exchange of value within service-focused industries has demonstrated that trust 264-1 helps raise consumer comfort in situations characterized by a high degree of risk, uncertainty, or lack of knowledge or information, during interactions between customers and service providers (Coulter & Coulter, 2002).    While significant research has been focused on standardizing the energy audit process, limited effort has been invested in subjective characters of service, such as trust cultivation during the audit process. Trust relationships are notable as a critical success factor in any service relationship ( Coulter & Coulter, 2002). This research focuses on value distribution related to build trust relationship during home energy audit processes, as well as to indicate the relationships between invested effort in a manner of time spend in an audit process and the measurement of value- trust conversion involving in homeowners’ decision making system that leads to energy related home improvements. The specific objectives of this research are to: (1) Define and characterize the value dimensions and value adding processes of a home energy audit, (2) Construct a value conversion model with uniquely defined trust attributes that can be used to indicate value- trust conversions taking place during an in-house walkthrough inspection. 2 RESEARCH BACKGROUND In the United States, the majority of residential housing is comprised of single family homes; and a large number of these homes were built prior to the development of energy codes. The U.S Energy Information Administration (EIA) states that the total energy consumption in the U.S, 2013 was 97.53 quads, or about 21.1% of the nation’s energy consumption came from the residential sector, followed by the transportation (27%), industrial (31.5%) and commercial (17.9%) sectors (EIA, 2013). In a study by the White House Council for Environmental Quality, key challenges facing homeowners in need of home energy efficiency improvements were found to be: 1) a lack of information, 2) a lack of financing, and, 3) a lack of skilled workforce to make home energy upgrades (2009 CEQ report).  Since the time of this report, significant investments have been made to reduce energy consumption of the residential sector, including training of home energy auditors and weatherization workforce, as well as incentives and aid programs for home energy upgrades.  While valuable opportunities, the role of the homeowner in making informed energy upgrade decisions is critical to the effectiveness of the outcomes.  The most well-known authorities in residential energy assessment are the Residential Energy Service Network (RESNET) and the Building Performance Institute (BPI).  Both have developed assessment approaches and certification for professional auditors.  However, the current energy audit approaches do not meet market demand, a survey of nearly 500 home energy auditors and contractors revealed that: 64% indicated that “homeowners lack an understanding about the information audits provided”; 50% stated that homeowners are “unaware that energy audits exist”; 74% stated that homeowners “cannot afford the upgrade that would be recommended”; 40% cited the high actual or perceived cost of audits; and close to 25% respondents believe the reason is due to a “lack of trust in the reliability and accuracy of an audit.” According to the research, almost 30% of survey participants stated that “half or more of their clients do not make any of the suggested improvements recommended in an audit.” (Palmer, Walls, Gordon, & Gerarden, 2013).  Riley et al. (2012) state that notable inefficiencies of the home energy assessment process involving barrier categories, these include:   Process waste:  Wasted effort conducting audits that do not lead to upgrades, extensive diagnostics that do not provide value or are not understood by the customer Information barriers: Incoherent/confusing delivery of energy assessment information to homeowners, lack of understanding by homeowners on how to pursue improvements Trust barriers: Distrust due to poor communication, lack of understanding of customer behavior / choices by auditors, and infrequent or one-off approach to customer service  In an effort to reduce these barriers during a home energy audit, a value-oriented light-touch home energy assessment is introduced to enable flexibility, efficiency and effectiveness of in-house walkthrough.  This approach emphasizes the execution of value adding processes that contribute to an efficient assessment process that maximizes the chance of action on the part of the homeowner. 264-2 3 THE OBJECTIVES OF THE NATIONAL ENERGY LEADERSHIP CORPS (NELC) The National Energy Leadership Corps (NELC) is an education and research program aimed at the transformation of how homeowners think and act regarding energy decisions in their homes and other buildings, and provides the platform to examine the improvement of value delivery that is discussed in this research. The NELC program is designed based on expert input from home energy audit and weatherization programs, and research conducted on multiple approaches to engage homeowners in the delivery of low cost, meaningful, and scalable home energy assessments.  The specific program objectives of the NELC are to:  1. Create a trusted network of 3rd party energy coaches who are capable of engaging homeowners in personalized home energy assessments;  2. Cultivate fundamental energy literacy for citizens through engagement of entry- level students and homeowners of all ages and demographics;  3. Enable scaled delivery of assessments at little to no cost to homeowners through the use of state-of-the-art practices and intelligent support tools; and,  4. Provide an on-ramp to credentials and careers in building energy efficiency and management.   These objectives are pursued through the development and deployment of curriculum, support tools and a supporting program infrastructure that enables instructors of multiple types of energy and sustainability-focused courses to integrate a student-led home energy assessment project into their curriculum.  The program includes: (1). online learning modules that provide self-paced on-demand learning, (2) flipped classroom model to enable discussion and hands-on training in class, and (3) technical tools to facilitate data collection and report delivery, such as an I-pad application, energy efficiency measurement database, and web-based energy profile for homeowners to track utility usage and home improvements. 4 DECISION-MAKING AND VALUE DEFINITION  The implementation of energy upgrades reflects homeowners’ decision making processes. The study of value distribution in a home energy assessment can be pursued through decision theory and decision making processes involving a value-based approach. The decision theory methods contribute to increased accuracy in decision making by building a systematic structure into data gathering and analysis (Claudio et al. 2014). Two key elements to approaching a decision making process include: 1) Identify alternative options, 2) Determination of expected outcome on each option and the expression of values. With this approach, the decision makers are allowed to prioritizing from among a list of probable consequences (R. L. Keeney, 1971). A preferred decision is “the option whose expectation has the highest value” (Hazelrigg, 1998), which reduces the level of uncertainty by individuals in complex settings. Uncertainty can be stated as lack of understanding, incomplete information, lack of experience, or having no clear preference among several alternatives (Claudio et al., 2011b). “Value adding process” is a term referring to a set of activities which transfer an input into an output that is has increased value.  Carol Sanford expands the term of value adding process as an ongoing value creation for stakeholders.  The creation of value depends on continual improvement on how well the process serves stakeholders (Sanford, C., 2011), including users, co-creators, the environment, community, and investors.    The complex nature of homes as systems, coupled with the unique settings of individual households, an approach to value distribution seeks to align value adding processes with the unique types of value needed to support decisions made by homeowners to implement home energy improvements. This research seeks to categorize value dimensions in a manner that allows customization for specific circumstances. Examples of unique circumstances that may inform assessment process design include: market intelligence about homes or homeowners, specific services being promoted by energy service professionals, and opportunities to implement regionally available weatherization assistance programs.    4.1 Effort and the Concept of Home Energy Assessment Efficiency When considering value in a home energy assessment, it is worthwhile to consider the effort invested in an assessment and the initial concept of assessment efficiency. As described in Lean principles, the goal of an assessment should be to maximize Value Adding Processes while also expending the minimal 264-3 Effort to be needed to enable these processes. “Effort” is introduced as an investment that can be measured in a variety of ways, including time and money.  In the case of this research, effort is measured in time, specifically time spent during the home energy assessment. Total assessment effort expended includes all of the time spent by auditors on the physical home energy assessment, which is expected to be approximately 90 minutes in the NELC program.  It is inevitable that only some of this time and effort contributes to the generation of value adding processes, and that some of this time is wasted, such as time spent waiting or looking for a misplaced tool, whereas, there is time spent on necessary but non-value adding, such as travel time between zones of a home. The study and categorization of effort in time invested into a home energy assessment systematically elevates the benefits of customize the assessment process for homeowners individually, and highlights value conversion in the inspection system. The elimination of waste effort spending on unnecessary tasks is also more feasible. For example, an assessor spends less time evaluating recently replaced equipment and spends more time on tasks that are related to homeowners’ expressed concerns, as well as the selection and representation of recommendations of home improvements based on homeowners’ market segmentation and worldview. Equation 1 is created to express the transformation from Effort in time to value adding effort, non-value effort and wasted effort.   Equation 1:  Effort equation of value and non-value adding processes [1]   Total effort (Teffort) = time spent on assessment (minutes) Value adding effort (Veffort)= time spent or invested on the generation of value (minutes) Non-value effort (NVeffort)= time spent on necessary but non-value adding activities (minutes) Wasted effort (Weffort)= time spent on unnecessary and non-value adding activities (minutes)  Building on this foundation, the concept of assessment efficiency is introduced as useful metric that can be described as Equation 2 below. Equation 2:  Definition of Assessment Efficiency  [2]   in a manner of time (minutes) While assessment efficiency can be calculated through the use of time, the variability of value adding processes with respect to their contribution to action on the part of homeowners is significant and often unmeasurable. This research emphasizes the development of improved understanding of value dimensions and value adding processes as an approach to improving the design of home assessment processes and practices.  Definitions of value in home energy assessment and trust attributes are introduced below to help better define how value adding effort leads to the outcome of decision making. 4.2 Value Definition of Home Energy Assessment  “Value refers to any aspect of a potential product that could influence the likelihood that customers would purchase that product” (Ralph L. Keeney, 2004). In the exchange of “value” within client customer relationships, the service sector, such as those services provided by an energy auditor, are defined heavily by the level of trust the client has in the recommendation of the service provider.  Different industries have unique definitions of “value”. Womack (Womack, 1996) in their presentation of Lean theory define value as: “a capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer.” Neep (Neap & Celik, 1999) also defined value as the “fair equivalent in service or commodities that an owner/buyer receives in exchange for money.”    To categorize value, this research adopts the value definition cited by John Kelly (Kelly, Male, & Graham, 2004), in the book of “Value Management of Construction Projects”,  that value can be categorized into two dimensions - “objective value” and “subjective value”. Objective value refers to a measure of the 264-4 Table 1: examples of value adding effort and the corresponded value dimensions and objectives Example of value adding process identified in an audit Descriptions of how value is generated Objectives of Value  Dimension of value Identify envelope penetrations that are in need of air sealing Penetrations which result in a large (amount) percent of unwanted heat gain/loss are detected and can be addressed through air tightening measures V exchange Objective Demonstrate active listening to homeowner by repeating and directly responding to information they have shared Demonstration of listening and responsiveness to homeowners helps to build trust relationships V trust Subjective 4.3 Trust Attributes of home energy assessment  The home energy audit is performed as a type of service in the construction industry. Customers have an inherent need to trust in their service provider to deliver the desired service outcome. Trust is one of the key predictors of future commitments between customer and service providers (Coulter & Coulter, 2002). Trust generally is viewed as an essential ingredient for a successful relationship. Trust is defined as “a willingness to rely on an exchange partner in whom has confidence”  (Garbarino & Johnson, 1999). Research has demonstrated that reduction of risk, uncertainty, and/or share with knowledge/ information on the part of interaction facilitate to establish trust relationships between participants (Coulter & Coulter, 2002). Seven trust attributes have been introduced from service literature to represent trust characteristics: competence, customization, reliability, promptness, similarity, empathy, and politeness.  The additional attribute of open and effective communication is also adopted as a trust attribute to directly address the need for information exchange between energy service providers and homeowners.  The first four of these characteristics pertain to the auditors’ ability to deliver their service and are referred to as “offer-related” trust attributes.  The latter four pertain to the auditors’ personal characteristics or manner of delivery, and are referred to as “person-related” trust attributes (Coulter & Coulter, 2002). Definitions and examples of offer-related and person-related trust attributes as interpreted for a home energy assessment are presented in Tables 2a and 2b respectively.   Table 2a: Definitions and examples of trust attributes in a home energy audit Offer-related Trust attributes Definitions of trust attributes  (adapted from Coulter & Coulter, 2002) Examples in a home energy audit 1.Competence  The degree to which customers perceive that the service representative possesses the required skills and knowledge to supply the basic service product  The auditors’ knowledge and experience of home energy audit  2.Ability to customize solutions  The service representatives' ability (or willingness) to vary the product/ service offering in terms of specific service attributes, in order to suit the individual customer's needs.  Recommend a 5day+2day digital  thermostat to a family who is often away on the weekend 3. Reliability  The delivery of that product/ service in a dependable manner  Conduct the assessment and follow-up processes in a manner that meets expectations 4. Promptness  The delivery of that product/ service in a timely manner  Arrive on time and complete tasks on schedule 264-6 Table 2b: Definitions and examples of trust attributes in a home energy audit Person-related Trust attributes Definitions of trust attributes (adapted from Coulter & Coulter, 2002) Examples in a home energy audit 5. Similarity The degree to which a customer perceives himself/herself to be similar to the service representative, based on comparable tastes, preferences, appearance, lifestyle. Share similar interests and values with homeowners, such as improving comfort or controlling of costs  6. Empathy The degree to which the service representative possesses a "warm considerate and caring" attitude toward the situations and conditions the client is experiencing Provide assessment in a manner that acknowledges unique challenges and is not judgmental about life styles 7. Politeness  The degree to which the service provider is perceived as being considerate, respectful, tactful, courteous.  Express gratitude, respect boundaries, and compliment homeowners' role in process  8. Open & effective communication† The degree to which the service provider demonstrates active listening and conveys information to the client in an effective and sufficiently understandable manner  Use direct and clear language  to explain issues to homeowners and take steps to verify understanding †Based on the study of adoption barriers in home energy efficiency, “open and effective communication” is added in this research to detect the understanding and transparency of a conversation. 4.4 Trust -Value Conversion Model   Trust attributes described in Table 2a and 2b are used to evaluate individual tasks in an in-house walkthrough inspection in a manner of time. Discreet inspection tasks are classified based on the value dimensions: objective and subjective value. The value is aggregated based on the objectives of value that contribute either gathering information of home conditions (Vexchange) and the building of trust relationships with homeowners through caring homeowners’ concerns, priority and preference (Vtrust). The objective value categorized trust attributes(Competence, Customization, Reliability and Promptness) are used to demonstrate the value of inspecting house condition, and the subjective value categorized trust attributes( Similarity, Empathy, Politeness and Open and efficient communication) are mainly used to evaluate auditors’ personality and the quality of delivery assessment service.   Be more specifically, the objective value is evaluated as trust attributes are identified through house inspection and data collection, which mainly focuses on various home systems, such as: attic, appliance, cooling, heating, lighting, renewable energy, water heating, building envelop and house upgrade. Subjective value is used to characterize assessors’ methods delivering the assessment; such as communication skills, worldview† techniques to learn homeowners’ priorities and concerns, and the assessors’ general behavior to interaction with homeowners during the assessment. Worldview refers to the study by the Shelton Group in which distinct market segments of home energy clients are categorized (in percentage of home energy clients) into four types: True believer (23.5%), Cautious Conservatives (22%), Concerned Parents (31%) and Working Class Realists (23.5%). Intrinsic and extrinsic motivations of each type of worldview are stated in table 3 (UtilityPulse program, Shelton group, 2013).   Table 3: Worldview†: Intrinsic and extrinsic motivations of each type of worldview (UtilityPulse program, Shelton group, 2013). Type of Worldview  (% of home energy clients)  Characteristics and qualities  True believer (23.5%) Intrinsic – Protect environment live responsibility   Extrinsic – save money, rebates, payback/ ROI, social norms Cautious Conservatives (22%) Extrinsic – saving money, control, resale value Concerned Parents (31%) Intrinsic – health and welfare of their family  Extrinsic – lower bills, payback/ ROI Working Class Realists (23.5%) Extrinsic – lower bills, payback/ ROI 264-7 study will be spanned through calculating time spent in individual task and homeowners’ feedback of assessment service.  Table 4: a series of tasks of exterior walkthrough as pilot study are coded according to objectives of value and related trust attributes take place in an exterior walkthrough Tasks  Tasks description Category of task system  Trust Attribute Value Objective 1 Take IR image of envelope Envelope Competence V Exchange 2 Compliment house modifications Professional trait Politeness V Trust 3 Inspect building envelope for air leaks Envelope Competence V Exchange 4 Check age of appliance Appliance Competence V Exchange 5 Explain IR image to homeowner Communication skill Open Communication V Trust 6 Determine windows type Envelope Competence V Exchange 7 Share experience with winter discomfort   Professional trait Similarity V Trust 8 Complete assessment in time requested Professional trait Reliability V Trust 5 IMPLICATIONS Energy retrofit projects for homes and buildings have significant potential to reduce energy waste, advance energy independence, and enable job-creating design and construction projects across sectors of the design and construction marketplace.  Improved characterization of value exchange and the development of trust with clients will help lead to the design of more effective energy assessment delivery methods by helping to elevate the need to combine effective information gathering with the generation of business relationships between homeowners.  These concepts also apply to energy assessment and auditing procedures for commercial buildings, where similar opportunities exist. 6 CONCLUSIONS AND THE NEXT STEPS  This research seeks to improve the home energy assessment process design through a value-oriented approach. The methodology presented here links value theory to the home energy assessment process via introducing the dimensions of objective and subjective value, and value objectives and trust attributes of home energy assessment. Currently, this research is focused on the design of a follow-up survey and feedback tool that will verify the value-trust model. By doing so, the expected contribution of this research are: (1) process of value distribution and the trust cultivation can be studied in more detail; (2) the design of assessment processes that target assessment efficiency; and (3) the facilitation of homeowners’ decision are aligned with homeowners’ interest and ability to act. Furthermore, this research proposes a feasible approach to analyze and measure continuous in-field activities in a quantitative manner, which leads to more possibilities to manage production/ service processes based on clients’ demands, as well as elevate customization with effectiveness and efficiency in the A/C/E industry.    Acknowledgements The research team is appreciative of the support provided to the NELC by the ELECTRI International Foundation, The U.S. Department of Energy Building America program, the Consortium for Building Energy Innovation, and the BNY Melon Foundation, and the GE Foundation.  References  Claudio, D., Kremer, G. E. O., Bravo-Llerena, W., & Freivalds, A. (2014). A dynamic multi-attribute utility theory-based decision support system for patient prioritization in the emergency department. IIE Transactions on Healthcare Systems Engineering, 4(1), 1–15.  264-9 Coulter, K. S., & Coulter, R. A. (2002). Determinants of trust in a service provider: the moderating role of length of relationship. Journal of Services Marketing. Garbarino, E., & Johnson, M. S. (1999). The Different Roles of Satisfaction, Trust, and Commitment in Customer Relationships. American Marketing Association, 63(2), 70–87. doi:10.2307/1251946 Council on Environmental Quality (CEQ), Recovery through Retrofit. CEQ Final Report, 2009 Hazelrigg, G. A. (1998). A Framework for Decision-Based Engineering Design. Journal of Mechanical Design. Keeney, R. L. (1971). Utility Independence and Preferences for Multiattributed Consequences. Operations Research. Keeney, R. L. (2004). Stimulating creative design alternatives using customer values. IEEE Transactions on Systems, Man and Cybernetics Part C: Applications and Reviews, 34(4), 450–459. Kelly, J., Male, S., & Graham, D. (2004). Value Management of Construction Projects. Building (pp. 1–84). doi:10.1002/9780470773642 Neap, H. S., & Celik, T. (1999). Value of a product: A definition. International Journal of Value - Based Management, 12, 181–191. doi:10.1023/A:1007718715162 Palmer, K., Walls, M., Gordon, H., & Gerarden, T. (2013). Assessing the energy-efficiency information gap: Results from a survey of home energy auditors. Energy Efficiency, 6, 271–292. doi:10.1007/s12053-012-9178-2 Shelton Group, Worldview White paper, 2011 Sanford C and et al, “The Responsible Business: Reimagining Sustainability and Success.” Jossey-Bass; 1 edition (March 29, 2011) Womack, J. ., & James, P. (2006). Value Stream Mapping. Manufacturing Engineering, 136(5), 145. doi:10.1306/61EECDB0-173E-11D7-8645000102C1865D Womack, J. P. (2006). Value stream mapping. Manufacturing Engineering, 136, 145–154. doi:10.1306/61EECDB0-173E-11D7-8645000102C1865D      264-10 

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