RESEARCH DESIGN FOR INSTITUTIONAL ANALYSIS

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RESEARCH DESIGN FOR INSTITUTIONAL ANALYSIS
OF HUD'S SOLAR HEATING AND COOLING DEMONSTRATION PROGRAM
Thomas E. Nutt-Powell
MIT Energy Laboratory Report MIT-EL-79-029
May 1979
Table of Contents
page
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . .
2
Introduction .
3
. . . . . . . . . . . . . . . . . . . . . . . . . .
An Hypothesized Institutional Analysis for Housing .
. . . . . . .
6
The Perturbation Prompter .....................
48
Specific Research Design .
51
. . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
List of Tables
1 - Institutional Entities Performing the Finance Function
in Housing .........................
8
2 - Institutional Entities Performing the Research Function
in Housing .........................
10
3 - Institutional Entities Performing the Political Function
in Housing . . . . . . . . . . . . . . . . . . . . . . . . .
12
4 - Institutional Entities Performing the Regulation Function
in Housing .........................
13
5 - Institutional Entities Performing the Production Function
in Housing .........................
15
6 - Institutional Entities Performing the Service Function
in Housing . . . . . . . . . . . . . . . . . . . . . . . . .
16
7 - Institutional Entities Performing the Socialization Function
in Housing .........................
8 - HUD-DOE (SHAC) Demonstration Program Residential Project
Cycles 1, 2, and 3.....................
56
9 - HUD-DOE (SHAC) Demonstration Program Residential Project
Cycle 1...........................
57
10 - HUD-DOE (SHAC) Demonstration Program Residential Project
Cycle 2...........................
58
11 - HUD-DOE (SHAC) Demonstration Program Residential Project
Cycle 3...........................
59
12 - Indicative Sample by Developer Type & Region . . . . . . . .
60
Table of Contents, cont'd.
page
List of Charts
1 - Finance and Finance Functions . . .
. . . . . . . . . . .
20
2 - Finance and Research Functions. . .
. . . . . . . . . . .
21
3 - Finance and Political Functions . .
. . . . . . . . . . .
22
4 - Finance and Regulation Functions..
. . . . . . . . . . .
23
5 - Finance and Production Functions..
. . . . . . . . . . .
24
6 - Finance and Service Functions . . .
. . . . . . . . . .
25
7 - Finance and Socialization Functions
. . . . . . . . . . .
26
8 - Research and Research Functions .
. . . . . . . ... .
27
9 - Research and Political Functions. . .
. . . . . . . . . . .
28
10 - Research and Regulation Functions
. .
. . .
29
11 - Research and Production Functions
. . . . . . . . . . .
30
12 - Research and Service Functions. . . .
. . . . . . . . . . .
31
13 - Research and Socialization Functions.
....
32
14 - Political and IPolitical Functions . .
. . . . . . . ...
15 - Political andI Regulation Functions.
. . . . . . . ... .
34
16 - Political andIProduction Functions.
.......
35
17 - Political andI Service Functions . . .
. . . . . . . ... .
. . . ..
........
.
..
18 - Political and Socialization Functions . . . . . . . . ...
.
.
.
33
36
37
19 - Regulation and Regulation Functions . . . . . . . . . . . . .
38
20 - Regulation and Production Functions . . . . . . . . . . . . .
39
21 - Regulation and Service Functions. . . . . . . . . . . . . . .
40
22 - Regulation and Socialization Functions. . . . . . . . . . . .
41
23 - Production and Production Functions . . . . . . . . . ... .
42
Table of Contents, cont'd.
page
24 - Production and Service Functions . . . . . . . . . . . . . .
43
25 - Production and Socialization Functions . . . . . . . . . . .
44
. . .
. . . . . .. . . . .
45
27 - Service and Socialization Functions..
.. . . . .. . . . .
46
28 - Socialization and Socialization. . . . . . . . . . . . . . .
47
26 - Service and Service Functions .
List of Figures
1 - Innovation Acceptance .
. . . . . . .
.. . .. . . . . . .
52
ABSTRACT
This paper is one of a series prepared under the sponsorship of DOE's
Photovoltaic (PV) Program as part of the institutional analysis of housing.
After an introduction describing the theory and methods of institutional
analysis, the paper is organized into three sections.
ABSTRACT, the first
section, presents the research design used for institutional analysis of HUD's
Solar Heating and Cooling Demonstration Program.
It contains an hypothesized
institutional arena, which describes the institutional entities in the housing
arena by function and activity and then arrays them according to intensity of
interaction across function.
The second section of the paper describes the HUD
program and describes how it serves as the perturbation prompter for institutional
analysis.
The third section of the paper presents the specific research design
used in the study.
From the first three cycles of the HUD program, 11 projects
were chosen for on-site case study.
A special open-ended semi-structured
survey instrument was used to collect information from a set of informants
identified for each project. The results of this data collection effort are
reported in subsequent reports in this project.
The author gratefully acknowledges Michael Furlong, Steven Heim, Patricia
McDaniel, Barbara Parker, Andrew Reamer, and Carole Swetky, all of the PV
Institutional Analysis Project at MIT; Jeffrey Cruikshank, who provided
editorial services; David Moore, Director of HUD's Solar Heating and Cooling
Demonstration Program; and Etta Roth of Real Estate Research Corporation.
Without their help and support, this paper could not have been completed.
The drawing is the architect's rendering of the Friends Community, a Cycle 3
project in North Easton, MA.
3
This paper is one of a series resulting from institutional analysis of
photovoltaic (PV) acceptance.
These studies are undertaken with sponsorship
of the US Department of Energy (DOE) as part of its Photovoltaic Program.
In addition to institutional questions, DOE is interested in economic, marketing, and technological issues, and is sponsoring a series of studies and
field tests on these topics.
Institutional analysis studies have typically
been undertaken in relation to particular PV field tests, though in some cases
studies have focused on comparable technologies and institutional forces
influencing their acceptance.
The housing institutional arena is being investigated in relation to
the PV program, in the context of the DOE-HUD Solar Heating and Cooling
(SHAC) Demonstration.
The SHAC demonstration program involves direct federal
grants to assist project developers in incorporating solar thermal approaches
into various building forms.
In this context, institutional analysis is
directed to understanding those forces which influence the rate and nature
of innovation acceptance in the housing sector.
(For a more detailed dis-
cussion of the theory of institutional analysis, see Nutt-Powell, et al., 1978.)
An institutional analysis involves seven steps:
(1)Identify the sector (i.e., economic, geographic) to be studied;
determine study objectives.
(2)Prepare a preliminary sector exploration -- i.e., an overview that
could be applied to any location-specific sector.
(3)Construct an hypothesized institutional arena.
(4) Identify the "perturbation prompter."
(5)Devise the specific research design.
(6)Monitor perturbations.
(7)Analyze the institutional arena.
4
This paper incorporates material relevant to the third, fourth and fifth
of these steps:
constructing an hypothesized institutional arena, identifying
a "perturbation prompter," and devising the specific research design for an
institutional analysis of the Solar Heating and Cooling Demonstration Program.
Its organization follows the theoretical and methodological constructs for
institutional analysis of innovation acceptance presented in an earlier paper
in this series.
(Nutt-Powell, et a], 1978).
That paper posits six types of
institutional entities -- formal and informal organizations, members, persons,
collectivities, and social orders.
Institutional action consists of ex-
changes, for which the critical datum is information.
within an institutional arena.
Such exchanges occur
Innovation forces institutional action by
disrupting existing social meaning.
This paper is preceded in the study by five others, each a background
paper serving as an element of the preliminary sector exploration of the
housing institutional arena. These papers deal with research and socialization (Furlong and Nutt-Powell, 1979), governmental involvement (McDaniel
and Nutt-Powell, 1979), standard setting (Parker and Nutt-Powell, 1979),
energy provision (Reamer, Heim, and Nutt-Powell, 1979) and housing production
(Swetky and Nutt-Powell, 1979).
Taken together, these papers provide the
basis for constructing an hypothesized institutional arena for housing.
An hypothesized institutional arena is a means of representing
institutional entities characteristically involved in a given sector, and
of indicating the nature of their typical exchanges. At any point in time
there is an identifiable pattern of exchanges between and among institutional
entities. This is called a "resource configuration."
It is possible to
postulate a relative homeostasis of an institutional arena's resource
5
configuration in order to establish researcher perspective as well as a
starting place for data collection.
This postulation is the hypothesized
institutional arena.
A review of the hypothesized institutional arena leads to the identification of where and how the introduction of an innovation could prompt
a perturbation (that is,cause exchanges between and/or among institutional
entities which are not routine).
For research purposes, one can identify
three types of institutional analysis, based on the time and nature of perturbation prompting.
The first studies the introduction of an actual pertur-
bation during its introduction; the second examines a perturbation after it
has been introduced; and the third studies a perturbation introduced solely
for research purposes.
This project, which has included work in four different
institutional sectors, has been based on studies using each of these approaches.
Once an hypothesized institutional arena is constructed and a perturbation prompter identified, it is possible to devise a specific research
design for institutional analysis.
The research design establishes how
perturbations occasioned by the innovation will be monitored.
This paper has three major sections.
The first presents an hypothesized
institutional arena for housing; the second discusses the perturbation
prompter for this study; and the third presents the specific research design
devised for this study.
Subsequent papers in this series will report the
findings of these investigations.
6
AN HYPOTHESIZED INSTITUTIONAL ARENA FOR HOUSING
Institutions are defined along three planes:
role.
function, activity, and
Function is the broadest parameter, including, for example, production
and research.
Activities are undertaken in support of a function; for
example, assisting or analyzing.
Finally, role is the particular implemen-
tation strategy adopted by an institutional entity with regard to its function
and activity; for example, vendor or linking-pin.
In defining an hypothesized
institutional arena, the analyst focuses on function and activity as the two
generalizable defining planes.
The hypothesized institutional arena for housing presented here is based
on information gathered during the preliminary sector exploration stage, and
is presented in the five preliminary exploration working papers of this study.
The work described in these papers was initiated by taking each of the
seven institutional functions (finance, research, political, regulation,
production, service, socialization) as a separate starting point.
Data
obtained from literature and key informants established the division of
institutional entities into the five topics reflected in the titles of the
working papers, a clustering which is the consequence of institutional
entities serving more than one function. Thus, two papers are combinations
maintaining function designation -- research and socialization (Furlong
and Nutt-Powell, 1979) and production (Swetky and Nutt-Powell, 1979) -while the other three present clusters of institutional entities meeting
many or even all functions -- governmental involvement (McDaniel and NuttPowell, 1979), energy provision (Reamer, Heim and Nutt-Powell, 1979) and
standard setting (Parker and Nutt-Powell, 1979).
7
This paper does not repeat the extensive description and discussion
of institutional entities in housing contained in these earlier papers.
Most particularly,it does not present detailed definitions of these entities
and the manner in which their characteristic functions and activities are
manifested.
Rather, each entity is defined briefly here according to the
functions it fulfills, and the activities it performs in meeting those
functions.
These definitions are found in Tables 1-7 (one for each of
the seven functions).
The definition of institutional entities by function and activity
is then used to develop a series of interaction matrices, representing the
exchanges characteristic of institutional entities by function, and indicating the relative intensity of this interaction.
The intensity of inter-
action is represented by a four-level ordinary scale:
high.
none, low, medium,
The assignment of an intensity rating was by a pooled judgement of
the research team. The interaction matrices are presented as Charts 1-28.
The set of figures and charts together represent an hypothesized institutional arena for housing, with particular reference to exchanges important
to solar energy innovation acceptance.
8
Table 1
INSTITUTIONAL ENTITIES PERFORMING THE FINANCE FUNCTION IN HOUSING
ENTITIES
ACTIONS
Veterans Administration (VA)
Insures, guarantees home loans
Federal Housing Administration (FHA)
Provides housing subsidies, loans
Department of Housing and Urban Development
(HUD)
Farmers Home Loan Administration (FmHA)
Provides loans, grants, subsidies
Federal National Mortgage Association (FNMA)
Trades mortgages in the secondary
market
General National Mortgage Association (GNMA)
Trades mortgages in the secondary
market
Federal Home Loan Mortgage Corporation (FHLMC)
Trades mortgages in the secondary
market
Federal Deposit Insurance Corporation (FDIC)
Provides deposit insurance
Federal Savings and Loan Insurance Corporation
(FSLIC)
State Housing Finance Agencies (HFAs)
Provides deposit insurance
Provides housing loans, grants
Provides housing loans, insurance,
grants, subsidies
State Department of Community Development(DCAs)
Provides housing loans, grants,
subsidies
Congress/Internal Revenue Service (IRS)
Provides financial incentive through
tax policies
States, Counties, Municipalities
Sets & collects property tax
Federal Reserve Board
Sets monetary policy
Federal Home Loan Bank Board
Sets monetary policy
State Bank Regulatory Boards
Sets monetary policy
Mortgage Companies
Provide loans
Private Mortgage Insurance Companies
Insures mortgages
Insurance Companies
Provide loans
Real Estate Investment Trusts
Provide means to accumulate and
invest capital
9
TABLE 1, cont'd
ENTITIES
ACTI )NS
Pension Funds
Provide loans
Savings & Loans
Provide mortgages
Commercial Banks
Provide construction loans
Mutual Savings Banks
Provide mortgages
Individuals
Provide loans
Equity Syndications
Provide means to accumulate capital
Finance Companies
Provide home improvement loans
Credit Unions
Provide home improvement loans
Tax Assessors
Provide financial incentives through
tax policies
10
'Table 2
INSTITUTIONAL ENTITIES PERFORMING THE RESEARCH FUNCTION IN HOUSING
ENTITIES
ACTIONS
Congress
Conducts policy-oriented research
President
Conducts policy-oriented research
State legislatures
Conduct
policy-oriented research
Governors
Conduct
policy-oriented research
Municipal Planning & Budget Agencies
Conduct
policy-oriented research
Federal Housing Authority (FHA)
Conducts housing market analyses
U.S. Department of HUD - Policy
Conducts long-term broad.based policy
studies at local, regional and national
levels
Development and Research (PDR)
U.S. Bureau of the Census
Collects and analyzes demographic and
housing statistics
Private research
Performs research on contract with
other actors in the housing arena
Trade and professional associations
Perform subject-related research
Unions
Perform subject-related research
Universities
Perform basic and applied research
related to housing on contract or
grant
Banks
Research economic and fiscal trends,
local housing market characteristics
Federal Reserve Board (FED)
Performs economic research
Federal Home Loan Bank Board (FHLBB)
Performs economic research
Commission/Task Force, Staff
Carry out special, highly visible
studies
Cabinet Officers, Staff
Carry out focused policy and programrelated research
Congressional Budget Office (CBO)
Studies economic and fiscal impacts
of Congressional appropriations and
policies
11
TABLE 2, cont'd
ENTITIES
ACT-IONS
General Accounting Office (GAO)
Performs reviews and evaluations of
existing federal programs
Office of Management and Budget (OMB)
Researches program impacts and
fiscal needs
Interest Groups (Federal/State/Local;
General Special/Specific Special/
Public Interest/Specific Public
Interest)
Perform subject-related research
Banking Commissions
Research
practices
Voluntary Standard Setting Commissions
(ASTM, ANSI)
Research nature, characteristics &
performance relative to standard
setting
U.S, Department of Energy (DOE)
Performs energy-related research
bank policies and mortgage
12
Table 3
INSTITUTIONAL ENTITIES PERFORMING THE POLITICAL FUNCTION IN HOUSING
ENTITIES
ACTIONS
Congress
Determines policy
President
Proposes/approves/administers policy
U.S. Cabinet departments/officers
Propose /debate/administer policy;
determine policy at a lesser level
General Accounting Office (GAO)
Proposes policy; determines minor
policy regarding reporting requirements
U.S. Office of Management & Budget (OMB)
Determines federal budget and
management practices
State legislatures
Determine policy
Governors
Propose/approve/administer policy
State cabinet departments/officers
Propose /debate /administer- policy;
determine policy at a lesser level
Local governing councils
Determine policy
Local chief executives
Propose/approve/administer policy
Local cabinet departments/officers
Propose/approve/administer policy
Voluntary standard commissions
(e.g., ASTM, ANSI)
Determine standards
13
Table 4
INSTITUTIONAL ENTITIES PERFORMING THE REGULATION FUNCTION IN HOUSING
ENTITIES
ACTIONS
Building Inspectors
Inspect construction regarding
structural standards
Housing Inspectors
Inspect housing regarding health and
safety standards
Federal Home Loan Bank Board (FHLBB)
Sets and administers regulations for
savings & loans
Federal Reserve Board (FED)
Sets and administers regulations for
commercial banks
U.S. Department of the Treasury
Sets and administers broad financial,
tax,and fiscal regulations
State Banking Commissions
Set and administer regulations
regarding statePchartered banks
U.S. Department of Housing and Urban
Regulates interstate land sales
Development (HUD) -- Office of
Interstate Land Sales
HUD -- Secretary
Regulates secondary mortgage market
Securities Exchange Commission (SEC)
Oversees interstate corporation
financial practices
Internal Revenue Service (IRS)
Sets and administers tax regulations
Environmental Protection Agency (EPA)
Enforces anti-pollution laws
Council on Environmental Quality (CEQ)
Oversees the environmental impact
statement process
Office of Coastal Zone Management (CZM)
Regulates permissible uses within
designated coastal zones
Occupational Safety and Health
Administration (OSHA)
Regulates worker health and safety
conditions
Fire Departments
Enforce fire regulations
Design Review
Regulates construction to meet
aesthetic standards
Courts
Adjudicate
arena
disputes in the housing
14
TABLE 4, cont'd
ENTITIES
ACTIONS
Interstate Commerce Commission (ICC)
Regulates materials transportation
Unions
Regulate member behavior
Insurance Commissions
Regulate
National Labor Relations Board (NLRB)
Arbitrates labor disputes
State Realtor Regulatory Boards
Regulate realtor behavior
Professional Registration Boards
Regulate entry to professions
Trade and Professional Associations
Regulate member behavior
Federal Energy Regulatory Commission (FERC)
Sets interstate energy prices
State Public Utilities Commissions
Regulates local utility behavior
Department of Justice
Enforces antitrust laws
Nuclear Regulatory Commission (NRC)
Regulates construction and operation
of nuclear power plants
State Facility Siting Boards
Determines where energy facilities
may be sited
Fair Housing/Equal Opportunity Employment
(EEO) Agencies
Enforce fair housing and qqual
opportunity laws
insurance company behavior
15
Table 5
INSTITUTIONAL ENTITIES PERFORMING THE PRODUCTION FUNCTION IN HOUSING
ENTITIES
ACTIONS
Developers
Initiate, coordinate, oversee
production process
Architects
Design housing product
Consulting Engineers
Advise
Lawyers
Design corporate structure
Surveyors
Determine site specifications
Real Estate Brokers
Facilitate site acquisition
Trade Unions
Provide labor for construction
Contractors
Build, manage, organize
Subcontractors
Build
Materials Manufacturers
Manufacture housing components,
whole structures
Materials Distributors
Distribute housing components
Public Housing Authorities
Develop public housing
State Developers
Develop
Community Development Corporations (CDCs)
Develop
Energy Companies
Supply energy in production process
Public Service
Provide roads, infrastructure to
facilitate production
the
16
Table 6
INSTITUTIONAL ENTITIES PERFORMING THE SERVICE FUNCTION IN HOUSING
ENTITIES
ACTIONS
Consulting Engineers
Advise
Planners
Assess alternatives and market need
Lawyers
Advise on legal options
Title Companies
Guarantee title
Real Estate Brokers
Facilitate sales, assess market demand
Materials Distributors
Advise on product use
Welcome Wagon
Does direct advertising for local
merchants
Insurance Companies
Insure property of owner and/or
occupant
Repair Personnel
Advise on, assist in maintenance
Energy Companies
Utilities gas, electric
Oil
Solar
Supply energy, service lines, advise
on energy use
Municipal
Police
Fire
Sewer
Water
Provide
Provide
Provide
Provide
Security Companies
Provide security for structures and
occupants
Maintenance Firms
Provide building & grounds maintenance
Property Management
Oversees operation, management and
maintenance
Equal Employment Opportunity (EEO)/Fair
Housing Agencies (Federal, State, City)
Investigate
Consumer Protection Agencies
Investigate. and adjudicate complaints
Mortgage Financers
Arrange debt structure
Tenants Organizations
Advocate constituent interests
security re: crime
security re: fire
continued use of sewer system
continued use of water system
and adjudicate complaints
17
TABLE 6, cont'd
ENTITIES
ACTIONS
Neighborhood Associations
Advocate constituent interests
Trade Associations
Provide advice and information
Professional Societies
Provide advice and information
Unions
Provide advice and information
Standards
ASTM
ANSI
NBS
Organizes standards setting process
Legitimates standards
Investigates standards
HUD National Flood Insurance Act
Provides flood insurance
Materials Manufacturers
Provide advice on product use
18
Table 7
INSTITUTIONAL ENTITIES PERFORMING THE SOCIALIZATION FUNCTION IN HOUSING
ENTITIES
ACTIONS
Designers
Set construction parameters through
design preferences
Trade Associations
Socialize members, government, and
the public through newsletters,
advertising, and lobbying
Professional Associations
Socialize members, the government, and
the public through newsletters,
advertising, and lobbying
Unions
Socialize members, the government, and
the public through newsletters,
advertising, and lobbying
Educational Institutions
Directly socialize students;
indirectly socialize the public,
government officials
Standard Setting Bodies
Socialize manufacturers and users of
building components
Lending Institutions
Set construction parameters through
lending preferences
Congress
Sets parameters for housing preferences
through choice of legislative issues
President
Sets parameters for housing preferences
through public statements, legislative
programs, and administrative directives
State Legislatures
Set parameters for housing preferences
through choice of legislative issues
Governors
Set parameters for housing preferences
through public statements, legislative
programs, and administrative directives
Commissions
Legitimate new directions and ideas
Cabinet Officers
Set parameters for housing preferences
through public statements, legislative
programs, and administrative directives
Interest Groups
Advocate the acceptability of particularized views on housing
19
TABLE 7, cont'd
ENTITIES
ACTIONS
Historical Form
Establishes the familiar as a parameter
Public Services
Establish existing service forms as
parameters
Tax Assessors
Set construction parameters through
assessment practices
Developers
Influence construction practices
through financial risk-taking preferences
Real Estate Brokers
Establish housing parameters through
broker preferences
Welcome Wagons
Convey community norms
Property Management Firms
Socialize owners and occupants through
management practices
Materials Distributors and Manufacturers
Set construction parameters through
advertising, offering, and endorsement
of products
Insurance Companies
Set construction and market parameters
through insuring preferences
Fair Housing/Equal Opportunity Employment
(EEO) Agencies
Set market parameters through public
pronouncements
Energy Companies
Set construction and market parameters
through range and cost of services
offered
Neighborhood/Tenant Associations
Exert influence on property owners,
government agencies
Media -- print
Reflect and formulate taste in the
residential market
-- journals
Socialize professional and trade
association members
-- visual
Reflect and formulate taste in the
residential market
State Energy Offices
Set construction parameters through
public pronouncements on energy
20
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.3i
THE PERTURBATION PROMPTER
The 1973 oil embargo provided dramatic evidence of the nation's reliance
on imported non-renewable energy resources.
It prompted the passage in1974
of the Solar Heating and Cooling Demonstration Act (P.L. 93-409), which
authorized a wide range of federal activities intended to help establish
solar energy as a viable energy resource for the US. A comprehensive program
is being conducted by the Department of Energy (DOE) under the authorization
of this and related legislation. As part of this effort, DOE isconducting
the National Program for Solar Heating and Cooling of Buildings. According
to DOE's 1978 annual report on the program, its thrust is to promote and
demonstrate the economic viability of solar energy for the heating and cooling
of buildings. There are four basic elements:
Research and technology development of new and advanced system
approaches and subsystems or components to reduce costs, improve
reliability, and provide solutions to problems.
Engineering development aimed at bringing systems, subsystems, and
components to a marketable stage for utilization.
Demonstration of solar heating and cooling in commercial and resi'dential buildings, using available systems installed both innew
and existing buildings, and the associated collection, evaluation
and dissemination of data and development of standards and performance
criteria.
Market development to assure than an institutional framework exists for
widespread use of solar energy including technology transfer, environmental and resource assessment, and studies on barriers and incentives.
(DOE, 1978c.)
The activities other than residential demonstration that have been completed'
are summarized in two DOE documents.
(DOE, 1978a; DOE, 1978b.)
The Department of Housing and Development (HUD) has responsibility
for residential applications. HUD has developed a demonstration program
49
which provides grants to builders and developers who equip new residential
construction or existing housing with solar systems.
HUD's residential
demonstration program is designed to:
finance solar systems in both new and existing dwellings;
develop performance criteria and test procedures for solar dwellings;
disseminate solar heating and cooling information;
undertake market development efforts to encourage the rapid and
widespread acceptance of solar heating and cooling technologies
by the housing industry throughout the US. (HUD, 1976, p. vii.)
The solar systems may be used for water heating and home heating and/or
cooling. The program has proceeded in a series of award cycles, each initiated by Requests for Grant Applications (RFGA) announced through the solar
and construction press and through HUD's own solar mailing list (HUD, 1978).
Five cycles of awards have been made in the HUD residential demonstration,
with awards announced on January 19, 1976 (Cycle 1), October 15, 1976 (Cycle 2),
May 30, 1977 (Cycle 3), March 29, 1978 (Cycle 4), and September 28, 1978
(Cycle 4a).
In addition, HUD (with DOE and the Solar Energy Research Institute)
has sponsored a Passive Residential Design Competition and Demonstration,
with design prizes and construction grants.
Awards were announced December 20,
1978.
While the oil embargo/energy crisis serves as the general perturbation
prompter, the specific perturbation prompter is the HUD residential demonstration program, and in particular the RFGA defining the nature of activity
required to receive a grant.
in two areas:
HUD asked that applicants provide information
(1)technical aspects of the solar energy system to be used;
and (2)reasons why the particular project should be funded as part of a
demonstration program.
(HUD, 1978).
HUD assumed the marketability of the
50
applicant's projects, as the awards were to cover only the incremental costs
of using a solar system.
(Inall cases backup systems were provided for.)
51
SPECIFIC RESEARCH DESIGN
The HUD Heating and Cooling Demonstration Program represents a deliberate public intervention into the housing market to accelerate the acceptance
of an innovation, solar energy.
The HUD program uses solar thermal technologies.
Because solar energy is an innovation in housing, the introduction of both
solar thermal and photovoltaic (PV) will have comparable impact in the housing
institutional arena.
It is for that reason that the study of HUD's program
provides useful guidance to framers of programs to accelerate the acceptance
of PV in residential applications.
In an economy based on free marketing assumptions, it is necessary to
justify market interventions by public bodies.
In housing, for example,
interventions have been justified by appeals to inequities in access (for
housing subsidies), and to the societal importance of historic form (for
special tax treatment of income-producing rehabilitated historic structures).
Intervention to encourage use of indigenous renewable energy resources (such
as solar) is justified on the grounds of political independence and the
control of inflationary forces.
Because the housing sector is a high consumer
of energy, there are several intervention efforts.
The efforts include those
aimed at user practices (for example, energy conservation practices including
thermostat settings and automobile usage) as well as those aimed at equipment
used (for example, energy efficiency ratings on major appliances and gas
mileage ratings on automobiles.)
The HUD Solar Heating and Cooling Demon-
stration Program fits into the second category.
In general, public intervention into market practices to accelerate
innovation acceptance is based on an "S-curve" model of innovation diffusion.
As shown in Figure 1, private market acceptance of an innovation occurring
52
FIGURE 1
INNOVATION ACCEPTANCE UNDER NORMAL, MARKET-BASED PUBLIC
INTERVENTION AND INSTITUI IONALLY-BASEU INI'ERVENIION CONDII IONS
12
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A
normal conditions
B = market-based public intervention conditions
C = institutionally-based public intervention conditions
53
through time is plotted by curve A. Market-based public intervention theory
is plotted by curve B. Curve C plots innovation acceptance prompted by
institutionally-based public intervention.
In the case of curve C, the
public intervention not only prompts the acceptance of the innovation earlier
in time, it also encourages the acceptance to occur more rapidly once begun.
Hence, where curves A and B are identical in slope and duration, with curve B
merely beginning sooner, curve C has a sharper slope and begins sooner.
The difference between curves A/B and C effectively reflects a difference
between market and institutional analysis.
acceptance are reduced to cost.
In A/B the factors influencing
Government intervention strategies to
accelerate innovation are premised on impacting cost, typically to minimize
the initial costs of innovation development by the private sector.
However,
once the acceptance process begins, it follows a trajectory no different
from private market acceptance.
The only difference is that it has begun sooner.
By comparison, institutional analysis identifies multiple currencies
influencing the innovation acceptance decision.
Institutional exchanges
consist of information, of which cost is only one type.
Among other currencies
of exchange are source (From whom do I hear the information?), form (In
what form do I acquire the information?), context (Inwhat institutional
context am I acting?), and application (How easily can this be made part of
my routine?).
The various currencies interact to yield some measure of
comprehensibility of the innovation.
To the extent that the innovation is
comprehensible, its acceptance will accelerate.
The HUD Solar Heating and Cooling Demonstration Program uses a marketbased public intervention strategy.
The program proceeds on the hypothesis
that financial incentives are both necessary and sufficient to accelerate
54
acceptance of solar technologies in housing.
It further hypothesizes that
the financial incentives can be focused on a single actor, the developer/
builder.
A sound research design for institutional analysis of this program
includes cost as one of the currencies of institutional exchange which contribute to the comprehensibility of an innovation.
But the research design
must also account for the other currencies listed above:
sources, form,
context, and application.
Method
Acceptance of HUD's RFGA and solar increment grants to developers as
the perturbation prompter, combined with research constraints of time, funds
and personnel (and in light of the fragmentation, disaggregation and localization of the housing arena), led to a decision to adopt an illustrative
case study method for this research.
Specific projects were selected for
detailed study based on their possible usefulness in representing institutional
currency exchange processes relevant to solar innovation acceptance in housing.
The case studies are intended to illustrate particular currency exchange
dynamics in various localized housing institutional arenas.
Sample Selection
Though HUD focused on developers as the critical actors to whom to
demonstrate solar technologies, it did not make grants according to the type
of developer.
The work completed in preparing the hypothesized institutional
arena for housing revealed that factors contributing to comprehensibility
would vary according to developer type.
Hence, the first variable used in
sample selection was developer type. A second primary variable was market
location.
Finally, high intensity interactions between institutional
entities (as shown in the hypothesized institutional arena) were used to
cull possible cases for sample selection.
55
The sample universe was all grant awards made in Cycles 1, 2, and 3.
As shown in Table 8, this consisted of 317 recipients. The grant recipients
were categorized according to ten developer types.
The ten types of developer
are:
+ Small builder -- primary activity is the construction of housing
+ Small developer -- primary activity is the packaging of housing
developments with a volume of up to 75 units/year
+ Housing Authority -- a municipal housing authority
+ Large developer -- primary activity is the packaging of housing
developments with a volume of 75 or more units/year
+ Non-profit developer -- primary activity is the packaging of
housing developments, with a non-profit incorporation
+ Manufacturer -- primary activity is the manufacture of building
materials, with housing development as a secondary activity
+ Designer/Engineer -- primary activity is either as a designer or
engineer, with housing development as a secondary activity
+
Utility -- primary activity is as a utility company
+ City -- primary activity is as a municipality
+ Institution -- primary activity is as an institution, such as university
Designation as a type of developer was made by project staff members,
based on project information contained in the three summary volumes about HUD's
project.
(ERDA, 1976; HUD, 1976; HUD, 1977.)
The distribution of awards by
developer type was shifted during the three cycles, with small builders and
large developers being increased proportionally (See Tables 9, 10, and 11.)
It was decided that the sample would include at least one project for each
developer type (excepting institution and city), with at least one project
in each of four regions into which the continental US was divided.
The four
regions (and states included in them) are:
* Mid-Atlantic and Northeast -- VT, NH, MA, CT, RI, ME, NY, NJ, PA
56
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61
*
Southeast -- MD, VA, DE, WVA, KY, TN, NC, SC, GA, FL, MI, AL, LA, AR
*
Southwest and West -- TX, OK, NM, AZ, CA, NV, UT
* Midwest and Northwest -- OH, IN, MI, WI, IL, MT, IA, MN, ND, SD, NE,
KS, CO, WY, ID,WA, OR, AK, MO
The regional delineation was based primarily on climatic conditions with
particular reference to insolation.
On first review, 34 projects were identified as of potential interest
for case study. A detailed review of project application and subsequent
development information was conducted using HUD's files. The Real Estate
Research Corporation is also conducting research on factors contributing
to the acceptance of solar technology on housing, under contract with HUD;
where applicable, their field files on the list of potential sample projects
were also reviewed.
Based on this review, 11 projects were selected for
direct contact and on-site case study. The number selected by developer type
and region is shown in Table 12.
Data Collection Process
An initial notice of case study activity was directed to the developer
of record for each project.
A list of additional informants, produced
on the bases of hypothesized interaction intensity as revealed in the various
matrices, was developed for each project.
The developer was asked to supply
names and addresses of each actor, for purposes of direct contact by project
staff.
Insofar as was possible, informants were supplied in advance with
some basic information on the purpose of the research.
Interviews were held with informants, with data collected using a
specifically developed open-ended semi-structured survey research instrument.
(See Appendix A.)
Most field research was conducted during January, 1979,
with follow-up inquiries conducted by telephone through February, March, and
62
April.
Interviews with additional informants were often scheduled on the
site, at the suggestion of one or more informants.
63
I EECES
DOE (1978a)
SOLAR HEATING AND COOLING DEMUNSTRATION PROJECT SUMMARIES
Washington: DOE/CS-OU09.
DOE (1978b)
SOLAR HEAlING ANu COOLING RESEARCH AND DEVELOPMENT
PROJECT SUMMARIES
Washington: DUE/CS-uO10.
DOE (1978c)
NATIONAL PROGRAM FOR SOLAR HEAIING AND COULING OF BUILDINGS:
ANNUAL REPORT
Washington: DOE/CS-0007.
ERDA (1976)
NATIUNAL PROGRAM FOR SOLAR HEATING AND CUOLING OF BUILDINGS,
PROJECT DATA SUMMARIES, VOLUME 1, COMMERCIAL AND RESIDENTIAL
DEMONSTRATIONS
Washington: Division of Solar Energy.
Furlong, Michael and Nutt-Powell, Thomas E. (1979) INSTITUTIONAL ANALYSIS
OF RESEARCH AND SOCIALIZATIUN IN HOUSING: A PRELIMINARY
EXPLORATION
Cambridge: MIT Energy Laboratory.
HUD (19/6)
SOLAR HEATING AND COOLING DEMONSTRATION PROGRAM:
SUMMARY OF HUD CYCLE SOLAR RESIDENTiAL PROJECi'S
Washington: HUD-PDR-230.
HUD (1977)
SOLAR HEATING AND COOLING DEMONSTRATION PROJECTS:
SUMMARY OF HUD CYCLE 3 SOLAR RESIDENIIAL PROJECTS
Washington: HUD-PDR-230-1.
HUD (1978)
RESIDENTIAL ENERGY FROM THE SUN: A BRIEF DESCRIPtION OF
HUD'S RESIDENIIAL SOLAR DEMONSIRAIION PROGRAM
Washington: HUu-PDR-351.
A DESCRIPTIVE
A DESCRIPTIVE
McDaniel, Patricia and Nutt-Powell, Ihomas E. (1979) INSTITUTIONAL ANALYSIS
OF GOVERNMENTAL INVOLVEMENI IN HOUSING: A PRELIMINARY
EXPLORATION
Cambridge, MIT Energy Laboratory.
Nutt-Powell, Thomas E. with Landers, Stewart, Nutt-Poweli, Bonnie R. and
Sorrell, Levi (1978) TOWARD A THEORY OF INSTITUTIONAL ANALYSIS
Cambridge: MIT Energy Laboratory.
Nutt-Powell, Thomas E., Furlong, Michael, McDaniel, Patricia, Parker, Barbara
and Reamer, Andrew (1979)
Cambridge: MIT Energy Laboratory.
Parker, Barbara and Nutt-Powell, Thomas E. (19/9) INSTITUTIONAL ANALYSIS
OF STANDARD SETTING IN THE UNITED STATES: A PRELIMINARY
EXPLORATION
Cambridge: MIT Energy Laboratory.
Reamer, Andrew, Heim, Steven and Nutt-Powell, Thomas E. (1979) INSTITUTlONAL
ANALYSIS OF ENERGY PROVISION IN HOUSING: A PRELIMINARY ANALYSIS
Cambridge: MIT Energy Laboratory.
64
Swetky, Carole and Nutt-Powell, Thomas E. (1979) INSTITUTIONAL ANALYSIS OF
HUUSNG PRODUCIION: A PRELIMINARY EXPLORATION
Cambridge, MIT Energy Laboratory.
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