Sunday, January 26, 2014
Athough residential business has declined for the propane industry over the past several years, the residential market still represents more than 47% of all propane gallons sold, according to the Propane Education & Research Council (PERC). While the residential market will continue to represent the largest profit center for propane marketers, the industry must work to increase that business. Bridget Kidd, PERC’s director of residential and commercial programs, told BPN that the decline in construction is one of three main challenges the industry faces in building up its residential business. PERC is implementing outreach programs to provide construction professionals and key decision makers with information to safely install and maintain propane appliances.
Kidd sees the reduction in construction business as a challenge, but she noted it is picking up to a “new normal.”
“All of the radars and economists are projecting new home starts to level out to over a million starts next year, which is considered to be a healthy market,” she said. That’s a good sign, but Kidd noted the market probably won’t go back to 2004 levels.
Increased efficiency of new propane technology is a second challenge that is causing a decrease in gallon consumption. Expansion of natural gas and electricity is the third challenge. “We’re targeting each of those challenges independent of one another,” Kidd stated.
In December, PERC approved a $3-million residential and commercial outreach program for 2014. The program uses three strategies to increase awareness and use of propane and propane appliances in residential and commercial markets.
Strategy No. 1: The Propane Energy Pod
For the residential market, PERC is working to get construction professionals to use the Propane Energy Pod, a model for new-home construction that merges five propane applications—space heating, water heating, cooking, fireplaces, and clothes drying—into a whole-home energy package. PERC is pushing the Propane Energy Pod message through its outreach programs, including efforts with state propane gas associations and direct contact with marketers.
One aspect of that is PERC’s Marketer Technology and Sales Training (MTST) Program, a series of classes for marketers that explores propane’s many uses, and provides sales ideas and techniques. One of the MTST classes is devoted to residential uses of propane, and it includes a segment on the Propane Energy Pod.
PERC offers an interactive training module of five independent tools to assist construction professionals. The Propane Energy Pod tool can be used to demonstrate the efficiency, CO2 emissions, energy costs, and Home Energy Rating System (HERS) score of propane projects. The HERS score rates a home’s energy efficiency: the lower the score, the higher a home’s energy efficiency. HERS is becoming a popular rating, and propane can help support that, Kidd stated.
She emphasized that PERC wants growth in the residential market to take place at the local level. Construction professionals, like propane marketers, are involved in their communities, she noted. They want to work with people they know and trust. She wants marketers to use the PERC resources, such as online tools they can put on their websites, or case studies or brochures, so they become a trusted resource for builders and other construction professionals.
Strategy No. 2: Propane as a Safe Fuel
Increased residential and commercial building professionals’ understanding of propane as a safe fuel is the second strategy, and PERC will create a technical training program and a job-site safety training program for professionals such as plumbers and HVAC contractors. The technical training program will use Certified Employee Training Program (CETP) materials that have already been created and customize portions for each industry. The portion for plumbers, for example, will highlight what plumbers should know about propane and installing and maintaining propane appliances safely. PERC will offer those customized programs to associations for plumbers and other professionals. PERC is also looking into certification requirements that plumbers and other contractors must meet and is working to incorporate its training in those contractors’ continuing education materials.
Strategy No. 3: Offset Fueloil Use
Marketers should be aware of what is fueling their existing customers’ appliances, and when marketers see neighborhoods using mostly fueloil, that is an opportunity for the marketer to sell those neighborhoods on the benefits of propane over fueloil.
PERC is working to help the propane industry capitalize on the shifting trend in the commercial market away from fueloil use and toward alternative energy. The council projects the opportunity for heating oil conversions at 10 million gallons a year of incremental sales by 2017. To help convince builders to use propane, PERC created fact sheets in 2013 on various home appliances, comparing the benefits of a propane version of that application to its fueloil counterpart. Fact sheets, available at www.propanemarc.com, may be found under the residential and commercial tab at the site, under “Resources for Construction Professionals and Homeowners.”
More on the Commercial Market
“Our commercial program will be all about engaging the marketer to be able to identify opportunities in the big commercial space, because it’s such a big space,” Kidd emphasized. The commercial topic will be part of the MTST for the first time in 2014. Toolkits, which include collateral, market research, case studies, training materials, and videos to help marketers promote the use of propane, are already available in areas such as landscape and autogas. PERC notes that the commercial market represents 22% of overall propane gallon sales. According to Kidd, decision makers are much different in the commercial market than they are in residential, so the PERC materials will give marketers the resources they need to communicate with those decision makers and determine their needs. Before coming to her current position at PERC, Kidd worked for homebuilders associations, so she knows that builders respond more to local businesses than national campaigns.
“Builders might look at an ad in a builder’s publication and say it’s interesting, but if they don’t have someone at the local level who can provide it, service it, and answer questions, they’re not going to be able to use it. And who better to talk to these builders than the marketers? We’re working on bridging those relationships and getting both parties what they need.”
The benefits of using the Propane Energy Pod are the main message of the residential portion of the 2014 Residential and Commercial Outreach Program. “The goal is to have new homes built using all gas appliances,” she said. “There is no reason to have an all-electric home anymore. And if builders are thinking of that and propane marketers and equipment dealers and distributors are thinking that, then everyone wins.” —Daryl Lubinsky
Light Tower Promotes Job-Site Safety
You will often see light towers lighting up concerts or sporting events. Many of these light towers on the market are from Magnum Power Products, and most of them run on diesel fuel.
Generac Power Systems, which makes portable generators that run on propane and natural gas, owns Magnum Power Products. It approached PERC about a year ago for funding and support to manufacture a solar hybrid light tower. Now, when solar exposure is limited, a Generac air-cooled LPG engine will keep the four 110-w Magnum Night Buster LED lights shining on the Magnum MLT4000S Solar Hybrid Light Tower.
Applications for the product include residential and commercial construction sites, golf courses, security and surveillance, and disaster and emergency relief. The product, which is still in the commercialization stage, promotes job-site safety in general.
“It primarily runs on solar with a propane back-up, which means the cost for the end user is dramatically below what you would have for diesel,” Kidd commented. “The emissions are dramatically lower, and for the rental yards, which are generally the owners of the equipment, the maintenance time is minimal compared to a diesel unit.”
Through its Propane Heat & Power Incentive Program, PERC is offering $3500 toward the purchase of each light tower.
PERC Launches Incentive Program for Builders
The Propane Education & Research Council has launched the Propane Energy Pod Builder Incentive Program to encourage builders to include propane equipment in new-home construction. This incentive joins several other PERC incentives that resulted in new propane equipment being used in the field.
The Propane Energy Pod Builder Incentive Program provides a financial incentive up to $1500 to qualifying and selected builders who purchase and use propane equipment for space heating, water heating, cooking, fireplaces, and clothes drying. In return, participating builders must agree to share feedback with PERC on equipment installation costs and other information. That information will be applied to programs that encourage the greater use of propane technologies, and in training and safety materials.
Only new equipment is eligible for the incentive, and builders must follow certain equipment guidelines to be eligible for the program. Visit www.buildwithpropane.com for information.
PERC recently reported 2013 results for its two major incentive programs, the Propane Farm Incentive and the Propane Mower Incentive. The mower program distributed nearly $650,000 to 1001 commercial mowing firms that bought qualified propane-powered mowers, while the farm program distributed $627,000 to farmers using such propane equipment as grain dryers and irrigation engines.
Kidd sees the reduction in construction business as a challenge, but she noted it is picking up to a “new normal.”
“All of the radars and economists are projecting new home starts to level out to over a million starts next year, which is considered to be a healthy market,” she said. That’s a good sign, but Kidd noted the market probably won’t go back to 2004 levels.
Increased efficiency of new propane technology is a second challenge that is causing a decrease in gallon consumption. Expansion of natural gas and electricity is the third challenge. “We’re targeting each of those challenges independent of one another,” Kidd stated.
In December, PERC approved a $3-million residential and commercial outreach program for 2014. The program uses three strategies to increase awareness and use of propane and propane appliances in residential and commercial markets.
Strategy No. 1: The Propane Energy Pod
For the residential market, PERC is working to get construction professionals to use the Propane Energy Pod, a model for new-home construction that merges five propane applications—space heating, water heating, cooking, fireplaces, and clothes drying—into a whole-home energy package. PERC is pushing the Propane Energy Pod message through its outreach programs, including efforts with state propane gas associations and direct contact with marketers.
One aspect of that is PERC’s Marketer Technology and Sales Training (MTST) Program, a series of classes for marketers that explores propane’s many uses, and provides sales ideas and techniques. One of the MTST classes is devoted to residential uses of propane, and it includes a segment on the Propane Energy Pod.
PERC offers an interactive training module of five independent tools to assist construction professionals. The Propane Energy Pod tool can be used to demonstrate the efficiency, CO2 emissions, energy costs, and Home Energy Rating System (HERS) score of propane projects. The HERS score rates a home’s energy efficiency: the lower the score, the higher a home’s energy efficiency. HERS is becoming a popular rating, and propane can help support that, Kidd stated.
She emphasized that PERC wants growth in the residential market to take place at the local level. Construction professionals, like propane marketers, are involved in their communities, she noted. They want to work with people they know and trust. She wants marketers to use the PERC resources, such as online tools they can put on their websites, or case studies or brochures, so they become a trusted resource for builders and other construction professionals.
Strategy No. 2: Propane as a Safe Fuel
Increased residential and commercial building professionals’ understanding of propane as a safe fuel is the second strategy, and PERC will create a technical training program and a job-site safety training program for professionals such as plumbers and HVAC contractors. The technical training program will use Certified Employee Training Program (CETP) materials that have already been created and customize portions for each industry. The portion for plumbers, for example, will highlight what plumbers should know about propane and installing and maintaining propane appliances safely. PERC will offer those customized programs to associations for plumbers and other professionals. PERC is also looking into certification requirements that plumbers and other contractors must meet and is working to incorporate its training in those contractors’ continuing education materials.
Strategy No. 3: Offset Fueloil Use
Marketers should be aware of what is fueling their existing customers’ appliances, and when marketers see neighborhoods using mostly fueloil, that is an opportunity for the marketer to sell those neighborhoods on the benefits of propane over fueloil.
PERC is working to help the propane industry capitalize on the shifting trend in the commercial market away from fueloil use and toward alternative energy. The council projects the opportunity for heating oil conversions at 10 million gallons a year of incremental sales by 2017. To help convince builders to use propane, PERC created fact sheets in 2013 on various home appliances, comparing the benefits of a propane version of that application to its fueloil counterpart. Fact sheets, available at www.propanemarc.com, may be found under the residential and commercial tab at the site, under “Resources for Construction Professionals and Homeowners.”
More on the Commercial Market
“Our commercial program will be all about engaging the marketer to be able to identify opportunities in the big commercial space, because it’s such a big space,” Kidd emphasized. The commercial topic will be part of the MTST for the first time in 2014. Toolkits, which include collateral, market research, case studies, training materials, and videos to help marketers promote the use of propane, are already available in areas such as landscape and autogas. PERC notes that the commercial market represents 22% of overall propane gallon sales. According to Kidd, decision makers are much different in the commercial market than they are in residential, so the PERC materials will give marketers the resources they need to communicate with those decision makers and determine their needs. Before coming to her current position at PERC, Kidd worked for homebuilders associations, so she knows that builders respond more to local businesses than national campaigns.
“Builders might look at an ad in a builder’s publication and say it’s interesting, but if they don’t have someone at the local level who can provide it, service it, and answer questions, they’re not going to be able to use it. And who better to talk to these builders than the marketers? We’re working on bridging those relationships and getting both parties what they need.”
The benefits of using the Propane Energy Pod are the main message of the residential portion of the 2014 Residential and Commercial Outreach Program. “The goal is to have new homes built using all gas appliances,” she said. “There is no reason to have an all-electric home anymore. And if builders are thinking of that and propane marketers and equipment dealers and distributors are thinking that, then everyone wins.” —Daryl Lubinsky
Light Tower Promotes Job-Site Safety
You will often see light towers lighting up concerts or sporting events. Many of these light towers on the market are from Magnum Power Products, and most of them run on diesel fuel.
Generac Power Systems, which makes portable generators that run on propane and natural gas, owns Magnum Power Products. It approached PERC about a year ago for funding and support to manufacture a solar hybrid light tower. Now, when solar exposure is limited, a Generac air-cooled LPG engine will keep the four 110-w Magnum Night Buster LED lights shining on the Magnum MLT4000S Solar Hybrid Light Tower.
Applications for the product include residential and commercial construction sites, golf courses, security and surveillance, and disaster and emergency relief. The product, which is still in the commercialization stage, promotes job-site safety in general.
“It primarily runs on solar with a propane back-up, which means the cost for the end user is dramatically below what you would have for diesel,” Kidd commented. “The emissions are dramatically lower, and for the rental yards, which are generally the owners of the equipment, the maintenance time is minimal compared to a diesel unit.”
Through its Propane Heat & Power Incentive Program, PERC is offering $3500 toward the purchase of each light tower.
PERC Launches Incentive Program for Builders
The Propane Education & Research Council has launched the Propane Energy Pod Builder Incentive Program to encourage builders to include propane equipment in new-home construction. This incentive joins several other PERC incentives that resulted in new propane equipment being used in the field.
The Propane Energy Pod Builder Incentive Program provides a financial incentive up to $1500 to qualifying and selected builders who purchase and use propane equipment for space heating, water heating, cooking, fireplaces, and clothes drying. In return, participating builders must agree to share feedback with PERC on equipment installation costs and other information. That information will be applied to programs that encourage the greater use of propane technologies, and in training and safety materials.
Only new equipment is eligible for the incentive, and builders must follow certain equipment guidelines to be eligible for the program. Visit www.buildwithpropane.com for information.
PERC recently reported 2013 results for its two major incentive programs, the Propane Farm Incentive and the Propane Mower Incentive. The mower program distributed nearly $650,000 to 1001 commercial mowing firms that bought qualified propane-powered mowers, while the farm program distributed $627,000 to farmers using such propane equipment as grain dryers and irrigation engines.
