Contents1. Executive Summary__________________________________________________________2

1.1 Methodology______________________________________________________________________21.2 Key Findings______________________________________________________________________21.3 Recommendations________________________________________________________________4

2. Existing Conditions Assessment____________________________________________52.1 Market Actors_____________________________________________________________________5

2.1.1 Vetting___________________________________________________________________________________52.1.2 Training and Certifications________________________________________________________________62.1.3 Customer Support and QualityQuality Control_____________________________________________7

2.2 Program Administrators_________________________________________________________72.2.1 Vetting___________________________________________________________________________________82.2.2 Training and Certifications________________________________________________________________82.2.3 Customer Support and Quality Control____________________________________________________9

3. Conclusions___________________________________________________________________93.1 Vetting____________________________________________________________________________93.2 Training and Certifications_____________________________________________________103.3 Customer Support and Quality Control________________________________________11

June 14, 2019

Prepared by:

Energy Solutions and VEIC

Prepared for:

Building Decarbonization Coalition

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Contractor Trade Ally Marketplace Market Assessment Memorandum

1. Executive SummaryThe Building Decarbonization Coalition (hereafter referred to as “Coalition”) funded an effort to (1) assess current contractor training and certification programs offered by manufacturers of electric appliances, and (2) provide recommendations for a residential building electrification contractor marketplace that that would help match homeowners with building electrification contractors (hereafter referred to as “Marketplace”). The intent is to deploy the Marketplace in conjunction with the Coalition’s parallel effort to design and implement a Consumer Inspiration Campaign for building electrification. The observations and recommendations summarized herein will be expanded on during the second phase of the project. The intent of this memo is to communicate the learnings, identify best practices that the Coalition’s Marketplace should adopt and/or leverage, and pose solutions to challenging topics pertaining to contractor vetting, training, and quality control.

1.1 MethodologyThe project team segmented audiences into three participating groups (hereafter referred to as “participants”): (1) manufacturers and distributors, (2) program administrators and implementers, and (3) contractors. The team developed slightly different questions for each group and had approximately one-hour interviews with representatives at each organization. The hardest group to reach in the timeframe was contractors, and the team will be engaging with contractors during the second stage of this project to conduct voice of customer surveys and test potential Marketplace strategies, so results from those discussions will be summarized as an addendum to this Memo during the second stage of this project. This Memorandum summarizes the assessment of current contractor training and certification programs offered by manufacturers of residential electric water heating and HVAC appliances. It also provides summaries of discussions with program administrators and implementers. All information gathered during this process has been anonymized.

1.2 Key Findings There is a lack of skilled labor. Participants were not aware of a single vocational school in California that offers courses on building electrification. Moreover, the plethora of wildfires that have plagued areas of California has kept the existing workforce occupied, which in turn has created a significant shortage of skilled labor. Capturing mindshare of a contractor who is already having difficulty servicing demand for their existing lines of business and suffering from a shortage of skilled workers will not be easy. The electrification value proposition for contractors and homeowners is unclear. All participants noted the need to demystify building electrification for homeowners and clarify the profit model for contractors. The former – demystifying building electrification for homeowners – is being addressed through the Coalition’s Consumer Inspiration Campaign. The latter – clarifying the profit model for contractors – needs to be addressed in concert with the establishment of the Marketplace. Multiple participants indicated they would invest in creating and offering this training to contractors – especially with attractive incentives that clearly address customers’ economic concerns.Building electrification will require an evolved sales process and message. Most homeowners replace their HVAC and water heater when it fails, whereupon their decision-making criteria focuses on cost and comfort They do not want to pay more out of pocket, or go extra days without hot water, heating, or air conditioning to have a piece of equipment back-ordered or wait for their electrical panel upgrade. Thus, it is imperative that building electrification contractors promote proactive versus reactive replacement. Proactive replacement is often part of a comprehensive home improvement project that leverages third-party financing. It is

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critical that all electrification professional – including solar, storage, electric vehicle, HVCA, water heating and more – are all versed in a wholistic electrification value proposition. Most contractor businesses are not structured to offer whole home electrification. Whole home electrification requires mechanical, electric and plumbing (MEP) skillsets. While there are contractors who can provides all three services, very few contractors currently have all three capabilities on staff. Many participants commented that HVAC contractors are well suited to offer home electrification. Others suggested that solar providers stand to benefit from increasing load. Contractors will need to have partnerships with complementary skillsets, develop them in house, or acquire a company who does. This is a significant hurdle that will require sustained commitment from policy makers and program administrators. Contractors also need to see building electrification as an opportunity and have ongoing funding for incentive programs as program suspension is considered more of a risk than an opportunity. As an example, the California Solar Initiative (CSI) made a ten-year commitment to catalyzing California’s solar industry. Five years after the program launched, a business model innovation –the solar lease model – was what ultimately transformed the market and made solar available to the masses. This is illustrated in Figure 1.

Figure 1: Transformation of California’s solar market. In early years, nearly all project interconnected in the state received an incentive from the CSI program. However, as the percentage of projects that receive CSI incentives decreases to nothing, the number of projects interconnected across the state continues to steadily grow, which is a strong indicator that the program had created lasting, transformation impacts in the market.

Contractor vetting, training, and consumer protections vary across participants. All interviewed participants acknowledged the importance of having qualified contractors selling, installing, and servicing equipment. However, the methods of vetting and responsibility for training contractors varied by participant. All participants require contractors to be licensed and most participants wanted contractors who had been in business for more than one year. However, perspectives on validating insurance, Home Improvement Salesperson registration, technician background checks, delivering training, certifying contractors, tracking permits, and weeding out poor performers varied across participants. In some cases, perceived legal risk caused the participant organization to minimize credentials validation and make clear to customers it was their responsibility to validate contractors. In other cases, participants take full responsibility

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for the vetting and training of contractors, quality assurance, and customer support. Contractor credentials requirements, vetting, and consumer protections are three key areas for standardization in the Marketplace. Incentive programs often encourage investments in training. Education and training on advanced practices, such as building electrification, often stem from the availability of incentives. Utilities, manufacturers and distributors all noted that they develop and administer trainings to support available incentive programs. Further, multiple participants noted that one of the greatest attractions for contractors for seeking training is to understand the value proposition, technical features, and program requirements for a new technology or service that they can offer through a rebate program. Utilities without building electrification programs/measures do not typically have building electrification trainings. One participant noted that training for residential home performance contractors was suspended because their program was suspended by the California Public Utilities Commission (CPUC). Incentive programs can better leverage the supply chain to identify, recruit, vet, and train contractors. Manufacturers and distributors have a unique ability to identify contractors and have dedicated resources who train contractors on technical subject, soft skills, and business considerations. Utilities tend to offer agnostic training to ensure contractors have the necessary technical skills and understanding of available programs. While utility, manufacturer and distributor participants did indicate that they would like to coordinate, and that opportunities exist to coordinate, no participant felt the level of coordination between utilities and the supply chain was exceptionally strong.All parties expressed a willingness to work together to find common ground. Given the willingness to collaborate on Marketplace policies and processes, the team sees a unique opportunity for the Coalition to help create consensus between key market actors and program administrators.

1.3 RecommendationsEstablish minimum requirements at multiple levels to ensure quality and mitigate risk. To mitigate risks and protect consumers from foul play, requirements should be established at the business, person and project level. Requiring minimal levels of compliance at various levels ensures that all those involved with a project will meet a certain standard, and those meeting a standard won’t be negatively impacted by those that are not held to any standard. In addition, it ensures customer satisfaction no matter the type of project or interaction the customer is having with market actors. Leverage existing trainings and hold the trainers accountable. The Marketplace should define the content requirements for training, review and vet existing trainings offered by manufacturers, distributors and program administrators, and recognize completion of approved trainings to serve as minimum training requirements. Wherever possible, training resources should be available online to general workforce. Furthermore, just as the Marketplace will not tolerate poor performance by its contractors, it should also hold its approved trainers to quality standards. For example, if a certain number of contractors who are trained by a single training organization (e.g., a manufacturer) are cited for poor service, the training organization may to face penalties, such as more stringent requirements and potentially suspension of their approved contractors from the program. The intent is to increase accountability of the training organization for the work performed by the people and organizations they train. Clarify the business opportunity and implications on contractor business models. New education and supporting resources, such as equipment sizing tools, energy bill impact calculators, and marketing materials, are needed to help contractors build a business case around electrification. These should be developed in partnership with the supply chain and consider different audiences (e.g., plumbers, solar, HVAC, comprehensive home performance,

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etc.). Different types of MEP business structures will lend themselves to different strategies, so both the messaging and resources need to consider the diversity of potential opportunities. Reward skills building, business model evolution and risk consolidation – and establish rigorous consumer protections. Some organization are positioned and willing to invest in training and evolve their business to support building electrification. Manufacturers that extend their warranty to cover services, distributors that supply multiple end uses, and contractors that obtain new licenses all are making investments that ultimately reduce market fragmentation, consolidate risk, and improve the customer experience. These organizations should be rewarded – both through the Marketplace and by incentive programs. Standardize data collection, processing and reporting. Inefficient processes will make Marketplace operations costly. For example, the Marketplace should consider the feasibility and value of incorporating a Learning Management System (LMS) and/or integrating with LMS’ provided by approved trainers. Business documentation should be centrally managed and have a suite of automated validations to ensure minimum requirements remain up to date. Similarly, project level requirements should be standardized to allow normalized reporting similar to how the CSI program collected, cleaned and anonymously reported on every project that was incentivized by the program. Advocate for and support building electrification incentive programs. All participants noted the importance of incentive programs for helping contractors overcome the perceived risk associated with modifying their existing, successful, business practices. In exchange for making investments in training and taking on new risks for their business, contractors should have clear reward for promoting building electrification and customers should be rewarded for taking the leap.

2. Existing Conditions Assessment2.1 Market ActorsThe project team met with six manufacturers and distributors during this assessment, covering HVACHVAC and water heating. Interview topics included how they vet the contractors who are approved to purchase and install equipment, the scope, frequency, methods, and drivers for trainings offered, and the QA processes that are used to ensure customer satisfaction.In general, most manufacturers see manufacturer representatives (reps) and distributors as being more connected with the local supply chain and so they want to take advantage of that existing connection. However, it is important that all parties respect the existing relationships that distributors have with contractors; contractors are the distributor’s “customers”, and just as utilities cherish their ratepayers, distributors cherish their customers. 2.1.1 VETTING The contractor vetting process employed by manufacturers ranges from minimal to extensive vetting. Most organizations interviewed required a contractor to be licensed but did not do extensive vetting of items such as insurance, bonding, criminal background checks, and other items. Of the six organizations interviewed, only one participant confirmed that they vet insurance. Manufacturer Vetting Processes – All manufacturers require contractors to pass a certain level of training before being approved to install their equipment. However, there were different medium that basic training was delivered, including online and in-person. The simplest form of vetting we found was a reliance on local agency representatives to identify contractors. The only requirement they expressed was that they want contractors who are “fluent” in their trade and that they wouldn’t take any first-year contractors. They did not say they required any training before being approved. Another organization has a base level of

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requirements that need to be met to be listed as an authorized installer on their website. The contractor must take one online class and an in-person intro class. On the more extensive end, two organizations require training before they are even able to be considered for approval. One organization required classes that were completely available online and the other organization requiring the contractor to complete five in person training classes and offer a one-year warranty to customers before they are authorized to install the equipment. While this highest level of requirements will likely ensure that the contractor is knowledgeable about how to install the equipment, it may come as too high of a bar for contractor organizations who cannot afford to lose multiple days of work to training. One organization described an ongoing vetting process where contractors scan equipment they purchase in exchange for points (value of which is equivalent to money). This process allows the manufacturer to have increased insights into who is installing their equipment which allows them to consistently refresh their contractor list on their website.Distributor Vetting Processes – Distributors reported similar contractor vetting and training practices; contractors must be licensed by the CSLB and are required to pass manufacturer training before they are approved to purchase equipment from that manufacturer. All participants interviewed said that there is manufacturer designed trainings that contractors are required to take before they are approved to purchase that manufacturer’s equipment from them, confirming manufacturer statements. These trainings are designed by the manufacturers but delivered by a mixture of manufacturers, reps and distributors at regional training centers, on-the-job, and at contractor offices. 2.1.2 TRAINING AND CERTIFICATIONSThere are a range of training opportunities available to contractors. Trainings are available online, in a classroom, and on-the-job, and can be generally classified into three topical categories: technical, sales, and business model. Overall, all participants agreed that any programs such as the one being designed here should take advantage of existing training opportunities. Any newly developed trainings should be focused on helping contractors build a business case around electrification.Roles – Both the distributors and manufacturers generally agreed that a good split of responsibilities was to have reps and distributors organize the trainings, but have the manufacturers provide much of the information being taught. Some organizations even have specific “training the trainer” courses which help distributors run the actual training sessions.Content – In general, HVAC manufacturers seemed to focus more on technical trainings, likely due to the importance of proper duct design, sealing and commissioning. HVAC manufacturers also provide training and support to help their contractors establish service centers, including staffing, pricing and other considerations. By contrast, water heater manufacturers said their training tended towards the less hands on end of the spectrum, with most trainings being focused on the basics of how the unit operates and how to specifically sell it. In general, they believe that installers are already good at installing, but that they need to be trained more about how to dispel myths about heat pump water heaters (HPWH) and how to upsell proactive replacement (because people do not want complicated replacement projects when they are without hot water). Gaps – Of the three topic areas (technical, sales, and business model), participants routinely highlighted that business model training and the sales proposition for home electrification are both significant gaps that the Coalition and its allies should focus on. Manufacturers understand how to sell, install and service their products, but the larger electrification value proposition and the implications for contractor businesses are areas they are not ideally positioned to address. For example, manufacturers and distributors are not well-positioned to suggest a contractor obtain a new license that supports electrification because they are not providing a corresponding business case for why the contractor should pursue electrification.

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Accessibility – Most manufacturers focus their trainings on the local level, either using the distributor’s facilities or going directly to the contractors’ offices themselves. One of the manufacturers has their training centers that are fully powered up and operational so educational walk throughs are possible. While participants noted that holding trainings at offsite facilities provides economies of scale, all participants noted that requiring extensive off-site training is difficult – especially for smaller contractor groups who cannot afford to lose out on too many days of work to pick up a new product line. Thus, whereas the Program administrators generally offer training in a neutral facility and have minimal online training, all of the manufacturer and distributor participants noted that they have dedicated staff and are willing to “meet contractors where they are” and customize trainings based on the unique needs and opportunities presented by different contractor business models.Certifications and Continuing Education – HVAC training programs also had increasing levels of certifications a contractor could reach through training – from basic to elite. Increased levels of benefits are provided by the manufacturer to contractors that invest in additional trainings, such as the ability to offer a longer manufacturer warranty, referrals, and exclusive sales tools. One program also had a feature of “expiring credits” which requires the contractor to continue their training past the initial approval stage. This level of training both encourages and rewards contractors for continued investment in training, and ensures the organization stays up to date with current technology installation and sales practices.Role of Incentive Programs – One overarching theme to the training conversations was that manufacturers and distributors increased their investment in trainings where there was corresponding investment from the utilities in the area. Some specific quotes to support this include:

- “We do special trainings for programs.”- “There haven’t been many HPWH training in California because there has not been any

support from the utilities. We invest in training where there is a high dollar incentives with simple program requirements. We need an ROI on our training, just like anything else.”

- “We target trainings where the incentives are, such as in SMUD territory. There are fewer overall events in California because there are less incentives.”

2.1.3 CUSTOMER SUPPORT AND QUALITYQUALITY CONTROLAll participants stated that customer satisfaction and response timeliness are critically important – both from a customer loyalty and cost standpoint. All participants said they embed quality assurance features into their product designs and train to avoid these situations. However, by themselves, the quality control (QC) practices used by these participants are likely insufficient for the Coalition’s Marketplace. Customer Support – Customer support processes vary by participant, but in general seem robust and effective at resolving issues in a timely manner. All manufacturers offer a dedicated phone line for support. However, there seems to be some difference of preference regarding who the home owner should call. Some specific models for manufacturers are noted here:

Example 1: The manufacturer offers 24/7 call line for customers and contractors. Both cs and contractors are encouraged to call the manufacturer, where they provide aa fault code. The manufacturer uses the code to troubleshoot the issue and specify the parts and materials needed to fix the issue. This allows the contractor to resolve the issue in one visit, which can be great for customer satisfaction.

Example 2: The manufacturer offers a three-tier support model. The first is aa 24/7 call center. This level of support resolves approximately 80% of the calls that come in. The next levels focus on varying degrees of technical proficiency, with tier-three involving a field service team.

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Distributors also play an important role in customer support. They supply replacement parts and often become the customer and the manufacturer’s point-of-contact when contractors refuse to resolve the issue. these helpQuality Control (QC) – No participant expressed clear remedies for contractors that repeatedly have poor installations or complaints. There were several solutions mentioned; most common was providing additional training. However, the team did not identify clear policies that act on contractors who wrongly specify a HPWH, intentionally oversize an HVAC system (often in place of insulation) or refuse to take responsibility for poor installs. Thus, rather than prohibit a repeat customer from purchasing their products, the distributor is more likely to increase the price of equipment significantly so that the contractor will almost certainly not buy it from them. These scenarios could explain some of the wide pricing disparity observed for measures such as HPWHs.

2.2 Program Administrators The team interviewed three utilities and three third-party implementers/administrators (hereafter referred to as “program administrators”). The utilities were asked questions about what concerns they had regarding the contractor marketplace and what requirements would need to be in place were they to use it with their programs. The implementer discussions focused more on the existing strengths and shortcomings of existing practices, and the challenges and opportunities facing building electrification. The range of concerns expressed included contractor requirements, risk management, general customer experience and satisfaction, and data integrity. Cross-cutting Topic: Data – Program administrators noted challenges and concerns about data consistency and validity. There are not clear guidelines for data collection making processing costly and normalized reporting nearly impossible. The Marketplace should be setup to collect uniform data, so that it can be reported on similar to how the CSI used program data to accelerate market transformation. This topic is not discussed elsewhere in this section but was mentioned enough that the team wanted to include it in this introduction so that it is captured for future design and strategy discussions.2.2.1 VETTING In general, program administrators take two approaches; they either (1) have significant requirements that contractors need to meet before they can participate in the program or (2) conduct minimal vetting of contractors because the act of vetting is perceived to increase risk exposure. The latter approach is not deemed feasible for the Coalition’s Marketplace. Existing Vetting Practices – The program administers expressed a range of what is required by contractors to participate in their contractor-based programs. One only required that contractors be certified by CSLB. The other two, however, have a more robust list of requirements. One required a basic level of training be completed about the program, license, general liability and workers compensation insurance, certification by the North American Technical Excellence (NATE) C-3 Program, and to meet local business license requirements. This administrator indicated they would be open to revising their requirements, but that they would want the requirements to be based on defensible qualifications and should as much as possible reference existing industry defined standards. Maintenance – The administrators stated that the database of approved contractors must be dynamic and maintained with up-to-date information. One administrator noted that an LMS platform may be a good way to manage information about contractor trainings, while another said that post installation surveys would keep up to date information about customer satisfactions. Overall, it is agreed that the Marketplace needs to have a method to validate

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contractor credentials and collect per-job feedback to mitigate the risks of customer dissatisfaction and market confusion.2.2.2 TRAINING AND CERTIFICATIONSAll participants noted that the significant need to help demystify building electrification is far greater than any technical topic. As one participant noted, the “biggest knowledge gap is not technical (how do I install). It is how do I change my point of view to see this as profitable and a good customer value proposition”. Until customers have confidence in how electrification will impact their comfort, energy bill and home value, the contractor value proposition will remain a real challenge. Once the customer value proposition is clarified – which is the goal of the Coalition’s Consumer Inspiration Campaign – the contractor value proposition will improve and they will have more incentive to change their business practices (which are already successful and likely facing a shortage of resources to serve existing demand).Availability – These participants noted the importance of having trainings and webinars associated with utility programs take place outside of normal 9-5 business hours to ensure that contractors have a chance to participate. Technical – Most participants offer some form of advanced technical training that is not specific to a manufacturer, for example, general topics such as duct design and sealing. All participants acknowledged that between their trainings and trainings offered by manufacturers, reps and distributors, technical topics are adequately covered. However, despite the synergies between the general trainings offered by these participants and the market actors, all utilities said their coordination with the market actors to design and deliver training is minimal. Sales – All participants specifically noted the need to develop specific electrification-based value-proposition sales training. Two of the three utilities did see themselves as being well suited to help overcome this barrier. The third felt sales was somewhat outside of their charter. One program administrator said that the program should explore creating tools that the contractor could use in the sales process, including FAQ resources that answer questions commonly heard such as “what is this going to do to the value of my home” and calculators that show what the potential energy bill impact would be from installing this equipment. All of these resources should help “demystify” electrification. Participants also noted the need to increase training around program incentives and financing. One tool presented as an example was an air-source heat pump tool being developed by Natural Resources Canada. It was presented as a good example of a sales tool that utilities could look to develop to help contractors sell electric appliances.Business Case – Across all participants, the main barrier identified by the program administrators interviewed was that contractors do not have a strong business case to focus on electrification. Overall, program administrators expressed that they see themselves as being well situated to help contractors develop a business case around electrification. While third-party program administrators suggested that utilities should put their funding towards helping contractors build a business case around electrification and to help set realistic expectations with their customers, they also expressed significant concerns that contractors do not have the time to pick up a new revenue stream without significant up front support. 2.2.3 CUSTOMER SUPPORT AND QUALITY CONTROLCustomer Expectation – A concern expressed by third-parties was that customers do not have the right expectations set for them – such as the fact that their houses are going to make different noises with these new appliances. The third-parties felt that utilities are uniquely suited to help make customers aware of these changes so that they do not blame contractors down the line for any unexpected changes.

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Customer Experience – All utilities said that “customer journey” was paramount. One utility who has significant contractor requirements said that the requirements are in place to ensure consistency between installations conducted by the participants. Since it is more about customer experience and consistency, they said that they would be willing to adjust their program requirements if they were agreed upon by the industry. Inspections – One of the program administrators also has an inspection procedure in place. Once contractors in their program begin participation, the first jobs they completed are all inspected to ensure program expectations are met. When five of their projects pass in a row, then the contractor’s inspection tier is modified to a lower rate of inspection. This higher level of requirements is one of their program strengths because it ensures consistency in how technicians are trained, sets expectations on program requirements, and creates documented records of verified quality installations.

3. ConclusionsAlthough the primary goal of market actors is to sell more product and program administers’ primary goal is customers satisfaction, both groups share each other’s focus on selling product and customer satisfaction. Thus, the team believe finding common ground to launch this Marketplace is feasible. That said, the Coalition’s vision for its Marketplace is more involved in the matching of customers to contractors than current practices used by market actors and program administrators. Thus, the team believes that in some cases the Marketplace requirements need to be more stringent than are currently used by market actors and program administrators.This section summarizes the thoughts from the project team. This section does not intend to specify detailed content requirements or lay out the extensive training needed to accomplish market transformation. Rather, this section focuses on defining the minimum requirements that the Coalition should adopt for its Marketplace. Feedback from the PAG will undoubtedly result in changes to these suggestions.

3.1 Vetting Business Requirements – The team agrees that contractors completing the work should be both appropriately licensed and insured to cover potential liability issues. The team also appreciates that – although varying in methods and rigor – all the market actor participants interviewed take responsibility to ensure contractors have a base level of education and training prior to installing their products. The team believes all three – license, insurance and basic training provided by “Approved Trainers” – should be minimum requirements for joining the Marketplace. The team proposes the following requirements for businesses enrolled in the Marketplace:

Licenses depend on project need; applicable licenses may include B, C20, C36, C10, C461

General liability, workers compensation, and auto insurance Completion of an approved training (must have certificate provided by Approved

Trainer) Must have been in business for more than one year Cannot have unresolved complaints with the Better Business bureau or Contractors

State License Board (CSLB) Person Requirements – While no manufacturer or distributor participant required background checks, the team feels that each technician that enters a person’s home via the Marketplace should either be a registered Home Improvement Salesperson or have a criminal background check. This level of vetting recognizes the enhanced sensitivities at a self-serve contractor 1 The actual license will vary based on project scope and will be further defined in the second stage of this project.

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marketplace must consider and protect against. The team proposes the following requirements for personnel who provide service via the Marketplace:

Technical staff must have a criminal background check Sales staff must be a registered Home Improvement Salesperson2

Project Requirements – To align with state policy goals and best practices that ensure safety and protect consumers, the team proposes the following requirements for projects completed via the Marketplace:

Pre-installation site assessment (digital tool deployed through the marketplace to ask basic questions and capture photos)

Post-installation closeout survey (digital tool deployed through the marketplace to ask basic questions and capture photos)

Permit application uploaded to Marketplace Inspection pass certification uploaded to Marketplace within 60 days of project closeout

3.2 Training and CertificationsTraining Content – The Coalition’s Marketplace will need to have a standard for what content must be included in the minimum training. However, the team believes that technology-specific content provided by manufacturers is already strong and can be leveraged. These existing trainings will likely need to add content about building electrification and the Marketplace policies, but the Coalition is well positioned to define these incremental topics for market actors and then validate that each training meets the Marketplace standard.Training Availability – Education and training for contractors should be developed with the idea in mind that they are very busy and that any webinars or trainings should either be available online for them to look at when they have time or to take place outside of normal 9-5 hours to ensure they can participate. Ideally, the Coalition’s Marketplace training is tracked through an LMS, though this notion needs additional consideration.Training Roles – The team supports the model of having manufacturers, reps and distributors design and conduct the Marketplace training; manufacturers know their equipment and reps and distributors are well-connected to the regional contractor community. Just as the training content needs to be validated to ensure it meets the Marketplace standard, the Marketplace should also create an “Approved Trainer” role for organizations that conduct the training. Approved Trainers would be required to confirm that a contractor has received the Marketplace’s required training. Accountability – The team cautions that having different organizations create and deliver the trainings could fragment accountability. For example, if issues pertaining to quality arise, it may be hard to determine if the training content is inadequate or if the trainer is not being thorough. However, the team supports this model for a two primary reasons. First, manufacturers are likely to have a common training that is delivered by multiple trainers throughout the state; thus, the team believes it will be possible to determine if the issue lies with the training content or the trainer based on how widespread the quality issues are. Second, regardless who is held accountable (content provider versus trainer), if either is expelled from the Marketplace, both organizations ultimately lose out. Thus, the team has confidence that with the proper program policies, the Coalition’s Marketplace can effectively leverage market actors to ensure that the workforce has the necessary technical and sales training.

3.3 Customer Support and Quality Control2 A “home improvement salesperson” is defined as a person who is engaged in the business of soliciting, selling, negotiating, or executing contractors for home improvements, for the sale, installation or furnishing of home improvement goods or services, or of swimming pools, spas, or hot tubs on behalf of a licensed home improvement contractor (Business and Professions Code section 7152).

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Customer Support – The Coalition’s Marketplace needs to rely on market actors for customer support as it is not feasible to replicate the processes or the controls that are already established and have been refined for decades. The Coalition should establish customer support standards and ensure that all contractors, manufacturers, and distributors meet the standard. Quality Control – The Marketplace needs to have clear polices, metrics, and enforcement processes to address potential QC issues. Customers must have a way to log complaints and the Marketplace needs to hold parties accountable for quality installations and customer satisfaction. For example, the approach expressed by distributors of increasing the equipment price to contractors who routinely have quality issues cannot be transferred into a Marketplace policy. A sample Marketplace policy for this situation could be to prohibit that contractor from receiving job requests in the Marketplace and assigning a “negative point” to the training organization(s). If the training organization has a certain number of negative points, they could be suspended from the marketplace as well.Consumer Protection – Another area that should be considered is long term consumer protection and satisfaction. Examples include how to avoid creating a continued need for gas to serve space heating needs (in certain climates) by ensuring the equipment is properly sized or ensuring HPWHs are not specified in areas where noise and ventilation are going to create negative experiences.

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