ACEEE Blog

Projects for your pipeline: conferences and deal sourcing don’t have to be mutually exclusive
May 21, 2015 - 9:31 pm

By Casey Bell, Senior Economist and Finance Policy Lead


In just a week and a half, ACEEE will be hosting its annual Energy Efficiency Finance Forum. There’s been a running joke in the energy efficiency financing industry for the past couple of years about the large ratio of conferences to deals. Maybe there's something to that, but over the past couple of months we've seen major shifts and increased activity throughout the marketplace that indicate a sea change may be in the offing. This makes us wonder, do conferences and deals have to be mutually exclusive?

The theme for our conference this year is A Critical Moment, and we'd like to seize this moment by seeing if we can bring some real business to the table. While we've suspected that all the networking that goes on at the Finance Forum has led to transactions and investments, we thought we’d try a little more direct matchmaking this year by formally introducing some great projects and programs to potential financiers.

That's why we're partnering with the Council for Development Finance Agencies (CDFA) to feature the CDFA Deal Room. This venue is the go-to place where investors and financiers can meet up with energy projects that are looking for financial backing. The Deal Room is open during the entire Finance Forum, with each of its 10 featured projects available for a full day, as well as projects being formally presented one at a time. Many of our presenters are bringing multiple projects to the table.

The full list of projects is available on the conference website. They're diverse in both their vision and their asks. For example, Treehouse Brokerage & Development is seeking $4.5 million for a zero-energy community at Sustainability Park (S*PARK) in Denver. NYCEEC is looking for investors for a $25 million secured credit facility. Modula S would like to find equity/project finance for a $55 million multifamily housing project featuring innovative modular construction.

And there's more! New World Connection needs help purchasing solar panels and electronics, install, and test charging stations in the amount of $20,000–$100,000. Green Cooling Tower Solutions is looking for $5–$50 million to perform cooling tower upgrades, convert traditional once-through cooling systems to closed-loop systems, and use salt water makeup for places like California. The Vermont Energy Investment Corporation would like $100,000 in seed capital. Their project combines net-zero modular homes and grid-interactive electric vehicles that can recharge from and supply power to the homes to reduce energy and build wealth for low-income homeowners.

Don’t miss your chance to meet these project owners and network with the speakers featured in our conference program. The Energy Efficiency Finance Forum takes place May 31–June 2 at the Marriott Marquis in San Francisco. Register online by May 26 for expedited check-in, or register on-site in San Francisco. If you’d like an introduction to energy efficiency finance, consider attending Energy Efficiency Financing 101, taught by The Cadmus Group, Inc. See you there!


The City Energy Efficiency Scorecard is around the corner. How will your city rank?
May 15, 2015 - 10:49 pm

By David Ribeiro, Research Analyst


This is a busy time of year in competitive sports. Top teams in the NBA (including our hometown Wizards) and NHL are competing for the Larry O’Brien Trophy and Stanley Cup. American Pharaoh just won the Kentucky Derby last week, and Chelsea took the Premier League title. But don’t forget about another friendly competition—the one for most energy-efficient city in the 2015 City Energy Efficiency Scorecard! There are only five days to go until the results are released on Wednesday May 20.

This is the second biennial edition of the City Energy Efficiency Scorecard, which scores and ranks the country’s most populous cities on their energy efficiency policies and actions. The competition is even fiercer this time around with more cities vying to be the best. Thirty-four cities fought it out in 2013, but 51 are going at it this year. What does that mean for our returning veterans? Will Boston hold onto the Art Rosenfeld Cup? Will newcomers like Milwaukee and New Orleans change the face of the game?

Since this is the second edition of the City Scorecard, we are able to offer cities the title of “Most Improved” for the first time. We’ve seen mayors boast about new energy and climate policies such as climate action plans and benchmarking ordinances. And we’re seeing some utilities hitting the weight room on energy efficiency, beefing up their demand-side investment and savings. 

We’ve made a few adjustments to the rulebook. As in 2013, cities are competing in five policy areas: local government operations, community-wide initiatives, buildings, energy and water utilities, and transportation. While most of the metrics from the 2013 City Scorecard still stand, we’ve added a few new ones for this edition. The role of natural gas in the nation’s energy portfolio continues to expand, so this year we’re offering a point for documented savings of natural gas. Cities may also take a free throw to earn a bonus point by implementing voluntary benchmarking programs for buildings in the private sector.

Overall, cities earn points by submitting documentation of actions and performance that register on our energy efficiency metrics. We set up different tracks for cities served by municipal versus investor-owned utilities, and for cities who can set their own building codes as opposed to following state code. This ensures that no city has an unfair advantage.

All year long, fans can keep up to date on policies and programs in these Scorecard cities by visiting the ACEEE Local Policy Database. All the policy information we use to score the cities is housed here.

Your city isn’t in the Scorecard? That’s ok! By downloading and completing our Self-Scoring Tool then returning it to us, any local government can find out their score and learn what they can do to improve their community’s energy efficiency. We’ll be releasing an updated version of the tool based on the 2015 scoring methodology in the coming months.

Who will rise to the top, and who will need to go back to the drawing board?  Tune in on May 20th at noon to find out!

Virginia Hewitt contributed to this post.


Work more, refuel less: efficiency opportunities for heavy-duty pickups and vans
May 07, 2015 - 2:55 am

By Siddiq Khan, Senior Researcher


Heavy-duty pickups and vans have annual sales of more than 700,000 units and consume about 400,000 barrels of oil per day. The first US fuel efficiency and GHG emissions standards (Phase 1) for heavy-duty vehicles, adopted in 2011, will yield a 12% reduction in fuel consumption, on average, for heavy-duty pickups and vans by 2018. These vehicles are similar to their light-duty counterparts in design, technology, and work functions, but have higher payload capacity (gross vehicle weight rating above 8,500 lbs.) At present, the gap between fuel economy requirements for light-duty and heavy-duty pickups and vans is considerably higher than can be explained by differences in vehicle weight and payload. The Environmental Protection Agency and the Department of Transportation are now working on Phase 2 of the program, a major element of the president’s climate action plan. It offers an opportunity to narrow the efficiency gap between light-duty and heavy-duty vehicles and deliver major savings at the pump to buyers of heavy-duty pickups and vans. ACEEE’s new research report Fuel Efficiency and Greenhouse Gas Emissions for Heavy-Duty Pickups and Vans: Phase 2 assesses the technologies available to reduce fuel consumption in these vehicles.

Our assessment of technologies draws from the agencies’ analyses, a 2010 National Academy of Sciences report, and recent work from the Southwest Research Institute. The figure below summarizes the opportunities we found for fuel consumption reduction in gasoline- and diesel-powered vehicles, relative to a typical 2010 vehicle.

Phase 1 and Phase 2 standards together could reduce the fuel consumption of gasoline pickups and vans by 31%, and of diesel pickups and vans by 28%, relative to 2010 levels. Given the agencies’ projections of savings from the first phase, this means that Phase 2 could reduce fuel consumption by 23% and 15% beyond Phase 1 levels in gasoline and diesel vehicles, respectively. Our calculations assume different penetration rates for individual technologies, depending on their applicability and market, and adjustments to reflect overlap in the technologies’ effectiveness.

Along with greater stringency, the Phase 2 rulemaking should make other improvements to the program. Vehicles’ fuel efficiency targets under the program vary with “work factor,” a parameter that reflects payload capacity, towing capacity, and four-wheel drive capability. Work factor should be defined based on a vehicle’s demonstrated capabilities and should adequately capture the relationship between the vehicle’s utility and its fuel consumption, both for gasoline and for diesel vehicles. New heavy-duty pickups and vans should display a fuel economy window sticker, similar to the one for light-duty vehicles, so that buyers can compare vehicles’ fuel efficiency, along with other performance features, both within and across classes.

The agencies’ proposal for the Phase 2 program is expected later this month or in June.


New Senate bills are good news for distributed generation and the smart grid
May 07, 2015 - 1:26 am

By Meegan Kelly, Research Analyst, Industry Program


A flurry of positive activity surrounding energy efficiency legislation took place on Capitol Hill last week, and progress continues this week with the introduction of two new energy efficiency-related bills with an emphasis on distributed generation (DG) and combined heat and power (CHP). Today, Senator Shaheen (D-NH) introduced the Clean Distributed Energy Grid Integration Act (S.1201) and the Heat Efficiency through Applied Technology (HEAT) Act (S.1202) for consideration before the Senate Energy and Natural Resources Committee.

The first bill, which we refer to as the Grid Integration Act for short, directs the secretary of energy to develop an effort focused on advancing the integration of clean distributed energy into electric grids. The bill would support the advancement of several different distributed energy resources including CHP, renewables, energy storage, fuel cells, and waste heat to power (WHP). It calls for the convening of a stakeholder working group, the undertaking of research to address technical and regulatory barriers, and providing support for demonstrations of intelligent integration systems for distributed generation that are dynamic in response to changing grid conditions.

Provisions of the Grid Integration Act will support the deployment of new advances in intelligent sensing and control technologies, which benefit both the distributed system owner and the electric grid operator by facilitating more dynamic, adaptive, and anticipatory integration with the grid. Using advanced integration technologies will help bring clean energy solutions online, while optimizing the quality and reliability of a new, smarter electric grid.

The second bill, the HEAT Act, addresses three major regulatory barriers to encourage the deployment of CHP and WHP, both of which would strengthen local economies and support national energy goals. The HEAT Act provides assistance to states in considering the adoption of (1) updated interconnection procedures and tariff schedules; (2) model standards for supplemental, backup, and standby power fees for CHP and WHP systems; and (3) the most recent EPA guidance on output based emission standards.

A number of barriers impede the full capture of CHP potential, and provisions contained in the HEAT Act would help states overcome many of these barriers, cost-effectively and without mandates. Greater CHP deployment will result in a range of benefits, including lower energy bills for the system owner and societal benefits such as energy savings, reduced fuel consumption, and greenhouse gas emissions reductions when compared to conventional power plants. Further, by reducing the need for transmission and distribution, CHP can also benefit utilities by reducing grid congestion, deferring the need for infrastructure investments, and improving overall grid reliability.

We again commend Senator Shaheen and her colleagues for their continued leadership and recognition of the value of energy efficiency as both the Senate and House prepare comprehensive energy bills. We expect the Senate Energy and Natural Resources Committee, under the leadership of Senators Murkowski (R-AK) and Cantwell (D-WA), to include one or both of these legislative proposals in its upcoming energy-related hearings this month. ACEEE testified at a hearing held last week, which was the first of four hearings on general energy titles—efficiency, infrastructure, supply, and accountability—that Chairman Murkowski has scheduled in May. A hearing on infrastructure is currently scheduled for May 14th, with a hearing on supply scheduled for May 19th.


On the road to bipartisan energy efficiency legislation
April 27, 2015 - 8:20 pm

By Lowell Ungar, Senior Policy Advisor


Now that one energy efficiency bill is before the president, the real legislative work on energy efficiency begins. The Energy Efficiency Improvement Act of 2015 (S. 535) is three steps forward, a collection of three useful but relatively modest provisions on residential water heaters and commercial buildings. But there is a long way to go.

In a rare display of bipartisan and bicameral cooperation, both the House and Senate energy committees are working on broad energy bills. Both bills are expected to have multiple components designed to gain bipartisan support, including (in different combinations) energy efficiency, infrastructure, government accountability, workforce development, supply, and energy diplomacy. Some areas may be more bipartisan than others, and both houses are covering that territory first. The House Energy and Commerce Committee, surprisingly, started with a subcommittee hearing on job training legislation developed by ranking member Bobby Rush (D-IL). ACEEE had testified on the issue at an earlier hearing.

Now, showing remarkable coordination or convergence, both houses have scheduled hearings on energy efficiency at the same time next Thursday morning. The House has not yet released details on its hearing. The Senate Energy Committee hearing will cover 22 bills that have been introduced this year. ACEEE’s Steve Nadel has been invited to testify in the Senate hearing. Here are some of the highlights of those bills:

First is the latest version of what is now known as the Portman-Shaheen bill, the Energy Savings and Industrial Competitiveness Act of 2015 (S. 720). The bill is largely unchanged from last year, including a provision on building energy codes, the SAVE Act on energy efficiency in mortgages, and provisions on DOE’s industrial programs and on federal energy management, along with the three provisions in S. 535 that already were passed.

The hearing will cover a few new bills that ACEEE helped develop (others may be considered for an infrastructure title):

American Energy Efficiency Act (S. 1063 by Sen. Franken, D-MN). Establishes a federal energy efficiency resource standard that applies to all major electric and gas utilities. Programs are administered by states and build on existing state policies where they exist. Savings targets gradually ramp up, reaching 20% electric savings and 13% natural gas savings by 2030.

Smart Building Acceleration Act (S. 1046 by Sen. Cantwell, D-WA). Directs DOE to conduct smart building pilots with Departments of Energy, Defense, and Veterans’ Affairs, and the General Services Administration, and to incorporate smart buildings into existing programs such as the Better Buildings Challenge.

Commercial Building Benchmarking and Disclosure (S. 1052 by Sen. Franken). Builds on a provision in S. 535. Establishes two small grant programs, one to help utilities and their partners establish systems to provide whole-building benchmarking data to building owners, and another to assist local entities to consider benchmarking and disclosure policies.

ENERGY STAR Program Integrity Act (S. 1038 by Sen. Risch, R-ID). Protects the voluntary ENERGY STAR program by preventing class-action lawsuits over products delisted from the program if EPA has already required appropriate remedies.

In addition, the hearing will cover four bills on building retrofits, four bills on federal energy management, two bills on appliance efficiency standards, two bills on coordination between agencies and programs, and bills on access to information, state policies, regional coordination, water utility efficiency, and alternative fuel vehicles.

At first glance a few of the bills would appear not to further energy efficiency: in particular two of them—one on furnaces and another on ceiling fans—would hinder DOE appliance standards rulemaking and thus reduce savings.

This is just the beginning of a long haul. Consideration of the various components is expected to last into the summer. Final enactment will depend on whether Congress continues on this considered and bipartisan path or the bills become vehicles for partisan attacks and attempts to stymie President Obama’s actions.

We hope more energy efficiency will make it to the finish line to the benefit of the economy, taxpayers, consumers, and the environment.


New Senate bill spells progress for industrial energy efficiency
April 23, 2015 - 1:33 am

By Meegan Kelly, Research Analyst, Industry Program


This Congress has started out well for industrial energy efficiency. Today, Senator Shaheen (D-NH) introduced the Smart Manufacturing Leadership Act. This new bill joins the Energy Savings and Industrial Competitiveness Act of 2015 (S. 720), better known as the Portman-Shaheen bill, which was introduced earlier this year.

The Smart Manufacturing Leadership Act of 2015 will facilitate innovation, enhance energy savings, and improve the global competitiveness of American manufacturers through the use of smart manufacturing technologies and processes. It directs the U.S. Department of Energy (DOE), in cooperation with other agencies, to develop a national smart manufacturing plan and to provide assistance to small- and medium-sized manufacturers in implementing smart manufacturing in their facilities.

Smart manufacturing is the use of information and communications technology to integrate all aspects of manufacturing, from the device level to the supply chain level, for the purpose of achieving superior control and productivity. Research by ACEEE and others has shown that smart manufacturing is demonstrating great promise for enhancing the efficiency of the existing manufacturing industry and dramatically reducing energy intensity, while making the firms more competitive.

A hallmark of the Smart Manufacturing Leadership Act is its focus on making the promise of smart manufacturing available to small- and medium-sized facilities that may not have the access to the same resources, such as high-performance computing capabilities, and expertise that larger firms can use to implement smart manufacturing solutions. DOE’s national labs are home to some of the fastest supercomputers in the world, and access to this infrastructure will allow small- and medium-sized manufacturers to develop realistic simulations and gain insight on product behavior, testing, and optimization of their processes and products.

In addition, the bill proposes that DOE use the existing Industrial Assessment Centers (IACs) to deliver some of the technical assistance that will help manufacturing facilities use energy more efficiently by applying intelligence. The IACs are celebrating their 40th anniversary this year. In recognition of the success of the program, the Portman-Shaheen bill reauthorizes a refreshed and enhanced program, making the IACs all the more important in assisting small- and medium-sized manufacturers with modernization through the use of technologies such as smart manufacturing.

We commend Senator Shaheen and her colleagues for providing the leadership to help make our manufacturing firms more energy efficient through smart manufacturing, and for remembering that firms of all sizes need access to 21st century technology.

While the introduction of legislation does not necessarily lead to passage (as we have seen over the past four years with the previous versions of Portman-Shaheen), these bills may have a better chance this Congress. We anticipate that the Senate Energy and Natural Resources Committee, under the leadership of Senators Murkowski and Cantwell, will include this provision, along with some others from the Portman-Shaheen bill, in the Manufacturing subtitle of an omnibus energy bill. A similar effort to develop a comprehensive energy bill is underway by the House Energy and Commerce Committee under the leadership of Chairman Upton.


A SUPR tool to map Clean Power Plan state compliance scenarios
April 21, 2015 - 10:47 pm

By Rachel Young, Senior Research Analyst, National Policy


Later this summer, EPA will publish its final Clean Power Plan rule, regulating greenhouse gas emissions from existing power plants. Though the final rule has not yet been released, policymakers, state governments, utility operators, and other stakeholders are weighing their options to reduce carbon dioxide (CO2) from the power sector in compliance with the rule. As states consider plans to submit to EPA, they will want to evaluate the costs of their compliance options, but comparing different strategies can be complex. To assist states in exploring the cost and pollution reduction potential of different options, ACEEE has created the State and Utility Pollution Reduction (SUPR) Calculator (Beta).

The proposed Clean Power Plan rule that came out last year allows states flexibility to pick from a host of pollution-reducing technologies and policies when designing their compliance plans. Energy efficiency is included in those options, along with renewable energy, nuclear power, natural gas generation, improvements to power plants, and many more.

The purpose of the SUPR calculator is to provide policymakers and stakeholders with a rough estimate of some of the costs and benefits of different policies and technologies that could help a state meet its air quality goals. Users can select from a list of 19 different policies and technologies, including energy efficiency policies, renewable energy options, nuclear power, emission control options, and natural gas, to build a compliance scenario in their state. SUPR shows users how much their scenario will cost and what they will get for that investment in just 4 easy steps:

For example, under the proposed rule, South Carolina is required to reduce its emission rate by 57%, to 772 pounds per megawatt-hour (MWh). In SUPR, you can pick from our options to see what you would need to do to comply with the rule. If you select an annual 1.5% energy savings target, building codes (high), combined heat and power (medium) twice, and ESCO programs, the results show that those policies together achieve 65% of the state’s compliance target, at a lower cost than many other compliance options. In addition, you can see in the figure—one of many in the calculator—how close the selected policies get the state to its goal.

SUPR calculator results for South Carolina

We will continue to refine the SUPR calculator to make it more useful. Please reach out to Sara Hayes (shayes@aceee.org) or Rachel Young (ryoung@aceee.org) with questions or suggestions. For more information regarding the SUPR calculator or other information on the Clean Power Plan, see our dedicated web page on the topic.


Congress just passed an energy efficiency bill
April 21, 2015 - 7:54 pm

By Steven Nadel , Executive Director


Today, the House of Representatives passed S. 535, a modest energy efficiency bill sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH). This follows Senate passage a few weeks ago. The bill now heads to the president’s desk for his approval, which is highly likely.

The bill includes three provisions drawn from a larger efficiency bill sponsored by Portman and Shaheen. The bill has provisions that: (1) promote commercial building energy-use benchmarking and disclosure; (2) establish a voluntary “Tenant Star” program to promote energy efficiency in rental property; and (3) adjust efficiency standards for “grid-connected” water heaters so that water heaters needed for demand response and thermal storage programs can continue to be sold. ACEEE led work on the benchmarking and disclosure provision and played a substantial role in the other provisions, including presenting testimony on the water heater provision before a House committee earlier this month.

The bill will have modest impacts on energy consumption. What is probably most notable is that, in an environment where the political parties can agree on very little, energy efficiency is one of the few issues that generates enough bipartisan support to pass legislation. In fact, the bill passed both the House and Senate by overwhelming margins.

Hopefully this is a harbinger of future energy efficiency bills. For example, the Senate Energy and Natural Resources Committee will hold a hearing on April 30 on a broader array of energy efficiency bills, and the House Energy and Commerce Committee is expected to hold a similar hearing soon. We congratulate the House and the Senate for recognizing the value that energy efficiency brings to America’s homes and businesses, such as reduced energy bills and a better-functioning electric grid, and we look forward to working with both chambers to create a more energy-efficient nation.


Celebrate Earth Day’s 45th anniversary by getting ready for an energy-efficient summer
April 21, 2015 - 7:34 pm

By Maxine Chikumbo, Communications Assistant


Earth Day turns 45 tomorrow, which means spring is in full swing and summer is just over the horizon. But you can stay calm, stay cool, and lower your carbon footprint, too, despite the approaching heat, by putting energy efficiency to work for you. Here is a sampling of tips gleaned from our recently launched smarterhouse.org, the evolution of ACEEE’s Consumer Guide to Home Energy Savings. Following these tips can save you money by cutting down on your utility bills, make your home more comfortable, as well as improve its performance, and cut your energy waste.

As you dream about warmer weather and summer activities, keep in mind that costs can creep up during the summer when you’re cooling your home. Cooling systems account for about 17% of energy use in the typical house. Here are our recommendations for keeping cool and saving energy:

Upgrade your cooling system. Thinking about improving your home cooling system before it gets really hot? If you are unsure, or your central air conditioning is 10-15 years old, you may want to consider calling in a qualified home performance contractor so you don’t end up selecting an inefficient model that will add to your expenses over the long term. Bear in mind that your decision should depend on your climate, and whether you are replacing an existing unit or installing an entirely new system.

Use your AC less and fans more. There are several measures you can take to ensure optimum performance of your AC. Start by keeping the air filters clean so they don’t impede air flow and damage the unit, conditioning only when ventilation is inadequate, and avoiding cooling unoccupied rooms. You can also use your AC in conjunction with ceiling or standing fans for more efficient cooling. Whenever you leave your home, adjust your thermostat to a warmer temperature to save energy. Or install a programmable thermostat, so you don’t need to remember to manually change the thermostat every day—you can save 3–5% on air conditioning costs for each degree that you raise the thermostat.

Drive green. Whether you are driving to the beach, the movies, or a mountaintop camping site, you can reduce your environmental impact not only by driving a more eco-friendly vehicle, but also by being more efficient about the way you maintain and drive your car. Little changes like keeping your tires properly inflated or carrying a lighter load when you travel can make a difference—Did you know that carrying around an extra 100 pounds reduces fuel economy by about 1%?

Change your lights. Replace traditional heat-generating incandescent light bulbs with compact fluorescents (CFLs) or light-emitting diodes (LEDs), and think about installing light sensors and lamp timers to reinforce those energy savings. Lighting makes up about 5–10% of total energy use in the average American home, costing the typical household between $75 and $200 per year in electricity.

Keep your beer cold. The last thing you need is a non-functioning fridge in the middle of summer. Check the age and condition of your major appliances, especially the refrigerator. You may want to replace it with a more energy-efficient model before it dies. Note that it is generally much less expensive to buy and operate one big refrigerator rather than two small ones, so if you are thinking of buying a second one or keeping your old one for extra storage, you might want to reconsider. While you are at it, replace aging, inefficient appliances such as your dishwasheroven, or dryer. Even if the appliance has a few useful years left, a top-efficiency model is generally a good investment. Make sure you know what to look for in order to select the most efficient model to save on energy and long-term costs.

Scrape, don’t rinse. Summer calls for a lot of hosting of family and friends. When you’re cleaning up after those parties, this will likely increase the number of dishwasher loads. A brand-new dishwasher isn’t the only way you can save and operate it efficiently. For example, instead of pre-rinsing all your dishes, before loading, simply scrape off any food and empty liquids to save time, water, and energy. If you find you must rinse dishes first, get in the habit of using cold water.

Find and seal air leaks. Did you know that air leakage accounts for almost 30% of heat lost from your house? Many of these holes in the building envelope are found in the attic, in places you might not think to look. Look into how to find and seal some of these leaks to make your house more comfortable before the hot summer weather begins.

Get an energy audit. Call in a home energy specialist (also known as house doctors, energy auditors, raters, or home performance contractors) before making major efficiency improvements to your house. They will figure out where and why energy is being wasted, and what you should do about it. Home energy specialists study the building as a system, and perform full checkups that are designed to address overall safety, comfort, energy efficiency, and indoor air quality.

For a robust list of changes you can make today, this month, or over the course of the year, check out the Home Energy Checklist.

Happy Earth Day, every day!


No Building Left Behind: The Clean Power Plan and Multifamily Energy Efficiency
April 15, 2015 - 11:37 pm

By Lauren Ross, Senior Analyst, Utility, State, and Local Policy Program


This post was co-written​ by Todd Nedwick of the National Housing Trust

States will soon begin developing compliance plans to meet the greenhouse gas reduction targets required by EPA’s upcoming Clean Power Plan (CPP). As they contemplate different strategies, states should consider the important role that increasing the energy efficiency of multifamily buildings could play in cutting emissions and supporting local economies. Multifamily housing has been underserved by energy efficiency programs in most states, leaving great potential to reduce carbon emissions while also improving affordability of rental housing.

The CPP proposal calls on states to develop strategies for reducing greenhouse gases from existing power plants. The proposed plan grants states a great deal of flexibility in adopting strategies that best address the emissions of their individual energy portfolios. While states may draw from a variety of approaches, there’s increasing evidence that energy efficiency, as a pathway to compliance, might be the lowest-cost option for reducing carbon pollution. For many states, end-use energy efficiency is nothing new. In fact, many have shown much success in developing their energy efficiency resources, including statewide policy and utility-sponsored efficiency programs.

The CPP proposal gives states an incentive to ramp up energy efficiency, especially in underserved sectors. There remains significant untapped potential to cut emissions, save money, and boost local economies by reducing energy waste in affordable multifamily buildings. A forthcoming study by Efficiency for All will determine that a 26% reduction in electricity usage in affordable multifamily housing is cost-effectively achievable by 2034 in some states. The same study concluded that every dollar invested in multifamily energy efficiency returns more than $3 in benefits in reduced arrearages, customer calls, collection activities, and safety-related emergency calls. This is not to mention the higher comfort levels, increased housing property values, and health-related benefits that come with multifamily energy efficiency.

Equally important, because energy costs are often the highest operating expense in affordable multifamily housing, reduced energy costs help ensure the continued affordability of a much-needed housing stock—an issue facing many states and localities.

States should capitalize on recent developments in multifamily energy efficiency by including programs and policies that target the affordable multifamily housing sector in their compliance plans. In states with an energy savings target for utilities, or a similar commitment, utility-sponsored multifamily efficiency programs are a good starting point. Key elements of well-designed energy efficiency programs can be readily adopted to increase participation and savings in this sector. For example, utilities and governments can work together to provide a “one-stop shop” for building owners to access services and improved processes for building benchmarking. Moving forward, states can look to examples such as Massachusetts, Washington, and Minnesota, where energy savings achieved from multifamily, ratepayer-funded programs count towards state-set annual energy savings targets.

Beyond utility-sponsored efficiency programs, a handful of states support financing for multifamily energy efficiency through their state housing finance agency. Maryland’s Department of Housing and Community Development, for example, offers a multifamily loan program for energy efficiency investments that targets affordable rental properties. Similarly, the Pennsylvania State Housing Finance Agency recently provided financing for capital improvements that resulted in a reduction in carbon dioxide equivalent emissions of over 10,000 metric tons across 91 affordable multifamily properties. In their plans, states should consider claiming affordable housing energy programs like this as a means to compliance.

Many communities recognize the multiple benefits of healthier and more affordable housing for their residents. By including energy efficiency initiatives and programs targeted at affordable housing as part of state compliance plans, states can respond to these concerns while cutting emissions. States should seize the moment and collaborate with utilities, communities, and affordable housing stakeholders to ensure multifamily energy efficiency is a state priority.