Midstream programs are initiatives that target the middle of the supply chain, such as distributors and contractors, rather than end-use consumers. While typical programs target customers to create a change in behavior, these midstream programs aim to increase the availability and promotion of high- performance HVAC products by providing training and incentives directly to distributors and contractors. This approach helps ensure that high-performance options are readily available and promoted to contractors who will in turn deliver them to customers, often resulting in instant discounts at the point- of-sale for the customer. For these programs, the program administrators work with HVAC distributors to promote high-performance heating and cooling systems like air source heat pumps (ASHP).
Distributors receive training resources and incentives for stocking and selling these systems, which helps ensure the availability of high-performance products for contractors and consumers. Through research and interviews with current midstream program implementers, the research team identified and examined 19 midstream programs across 18 states that focus on high-performance products, like ASHPs, for energy efficiency. Although they all share the common feature of promoting ASHPs through direct engagement with HVAC distributors, the details of the incentives and the mechanics of the programs still vary across programs. Key differences between existing midstream programs include specific roles and responsibilities of distributors and contractors, recipients of incentives, incentive amounts, equipment eligibility, and data collection requirements.
This research helped inform a set of best practices for midstream programs focused on ASHPs with respect to two key topics: (1) how to engage supply chain partners (like distributors), and (2) how to evaluate the effectiveness of programs. Implementing midstream programs means program administrators need to consider new ways of delivering and evaluating programs, including data collection, incentive delivery time frames, and stakeholder engagement.
Midstream Program Best Practices that apply to ASHPs
- For data collection, less is more. The simpler or fewer the data required, the more likely it is for distributors or contractors to participate.
- The quicker the payment of the incentive, the better. Decreasing the time a distributor or contractor waits to receive their incentive improves their cash flow, increasing the financial benefit of participating in the program.
- Reduce the risks for supply chain partners. Establish easy-to-follow guidelines and procedures for how the program will work and what the distributor can expect.
- Maintain consistency in program requirements and incentives over time. Since changes are inevitable, when they do happen, give supply chain partners sufficient time to adapt.
- Communicate regularly with supply chain partners. Communication should be bidirectional, keeping partners informed on program matters and collecting feedback for program improvements.
These five best practices provide guidance to designers and implementers as they account for their unique markets. The goal is to design programs that encourage better collaboration and develop stronger relationships with the distributors, contractors, and manufacturers, and that foster success for all participants in the effort to increase the sales and customer affordability of high-performance HVAC equipment, including ASHPs, to a broad consumer base
