Nine percent of Eastern Illini's members have installed geothermal heatpumps. EIEC's Bob Dickey (left) talks to geothermal contractor Ron Gocken (right) about consumer education. Photo credit: Nancy Nixon
Over 1000 geothermal heat pumps have been installed in Eastern Illini Electric Co-op’s service territory
Nearly nine percent of Eastern Illini’s 12,000 consumer members have geothermal heat pumps installed at their residence thanks to the co-op’s strong consumer education program. In 2011, the co-op surpassed 1000 geothermal exchange systems installed in its service territory. For comparison, the national penetration is 1.3 percent.
This level of penetration is all the more striking since geothermal systems cost significantly more than conventional heating systems. How has this small rural cooperative motivated its consumer members to make this investment in efficiency? Here’s a hint: it wasn’t rebates.
According to Bob Dickey, manager of marketing and economic development, the co-op owes its success to sustained consumer education. Dickey, who has been vigorously promoting these systems since he came to the co-op in 1998, notes that when the co-op redirected the money it had been using to pay rebates to consumer education, the number of members choosing geothermal systems went up.
The co-op’s message to consumers is, “do the math” and the co-op provides an online cost calculator so they, in fact, can do the math. For a typical home in Eastern Illini territory averaging 75 million Btu’s to heat in the winter, the seasonal cost of electric resistance heat runs about $2,000. Propane runs about the same.
“If we put a geothermal system in that same home, we will drop that cost down to $500 to $700,” Dickey says. Members also save about 40 percent on hot water. Payback time is 5 -7 years when replacing an 80% efficient HVAC system.
The co-op does not sell or install the systems. To help their members overcome the price barrier, however, Eastern Illini administers a loan program that allows members to pay off the additional cost of this system with savings on their electric bill over a period of seven years.
According to Dickey, the co-op also had to find ways to overcome “contractor inertia.” Contractors, who had little experience installing the systems, were reluctant even to discuss geothermal with their clients. The key, Dickey says, is to create demand among the membership.
The program has reduced the co-op’s costs and has strengthened the loyalty of members. According to the ACSI score obtained from over 1,000 member responses in November of 2010, Eastern Illini received a score of 84 in spite of a facility charge of $26.00 - $34.00 per month and a kilowatt hour cost of 13.8 cents for the first 1,000 kilowatts.
Measuring the success of the co-op’s marketing program
- The co-op began its loan program in 1984. Between 1980 and 2004, 500 systems were installed but in the next six years, another 500 were installed.
- In 1999, 34 percent of new construction in the co-op’s service territory had geothermal systems; today 73 percent of new homes are being built with geothermal systems.
Measuring success for the co-op members
In one year, Eastern Illini’s geothermal systems
- save 8 million kilowatt hours of electricity
- save $1.2 million on Eastern Illini member utility bills
- eliminate 5,800 metric tons of CO2
- One educational tool has had a significant impact: the co-op’s website offers an online tool that can calculate the different annual heating costs of each type of heating system for his or her home. In this rural area where natural gas is not an option, the benefits of a geothermal system are striking.
- Eastern Illini has sponsored more than 50 open houses to provide an up-close and personal demonstration of geothermal systems.
Overcoming contractor inertia
- When Eastern Illini started marketing geothermal systems (the co-op does not sell or install the systems), there were only 3 contractors in the area who could install the systems. Dickey says in the beginning contractors seldom discussed geothermal as an option with members. So the co-op set about stimulating demand by educating their members.
- The co-op maintains a list of recommended contractors for its members. To be included on the list, contractors must (1) offer options beyond conventional heating systems; (2) provide clients with a heat loss/heat gain analysis; tell clients about EIEC’s rate options and loan program.