Jake Saper (MBA/MS Environment & Resources), Thomas Hand (MBA), Andreas Zoellner (PhD, ME) and Prof. Gil Masters (CEE)
Some 40 million U.S. homes are heated with oil or propane, even though their owners could save 75 percent on their heating bills—$1,000 a month on average—by installing electric heat pumps instead. The members of project Glow figured that the upfront cost of about $5,000 for the equipment was the main barrier, and that it could be overcome by lease financing, group discounts, and creative marketing. They hoped to become the SolarCity of home heating.
With the support of an Innovation Transfer Grant, Glow went to Vermont to test their theory and launched the Brattleboro Challenge. In order to conduct data-driven market research, Glow offered buyers in the local community a 10-percent discount if 25 units were sold in 25 days. Glow met the discount target, but found buyers were not interested in taking on a lease and preferred to purchase systems outright, even in economically depressed neighborhoods. The project demonstrated that creative marketing could reveal latent demand for energy-efficient technology. Ultimately, though, Glow found the customer acquisition costs would not make for a reasonable business plan.