Better information will transform energy use in multifamily buildings

Blog Post | September 30, 2014 - 2:16 pm
By Lauren Ross, Director, Local Policy

When ACEEE launched the Multifamily Energy Savings Project two years ago, we offered one of the first estimates of potential energy savings – $3.4 billion – for multifamily buildings, a traditionally underserved market. Since then, we continue to report on opportunities and challenges for achieving these savings. Recently, there’ve been a few major wins for the multifamily community that are expected to make it easier for building owners and financiers to make investments in energy efficiency.

Last month, Fannie Mae released the first nationally representative sample of energy and water data for multifamily properties across the United States. The Multifamily Energy and Water Market Research Survey provides an insight into multifamily buildings’ annual spending on energy and water as well as other important trends and metrics. The report also responds to the lack of information on energy use in submarkets in the multifamily sector by providing separate breakdowns for affordable and market-rate units, tenant and owner-paid utility bills, and by building size and other important building features.

The report also reinforces what many have speculated in recent years – the multifamily sector remains an untapped opportunity for energy efficiency. According to the survey results, the least efficient buildings might be spending upwards of $165,000 more per building in annual energy costs than comparable buildings operating at a much higher efficiency.

In addition to providing the most comprehensive, national multifamily energy and water use data to date, the survey also serves as the basis for the long-anticipated EPA ENERGY STAR® score for multifamily buildings . The 1 - 100 ENERGY STAR score is a simple way for multifamily building owners to understand their property’s energy performance over time, compared to its peers. This information can also be made available to tenants who are interested in the energy efficiency of their building or prospective tenants.

Proponents for the multifamily ENERGY STAR score expect to see the kind of benefits that have been demonstrated in commercial and industrial buildings. The single score for these buildings, introduced in 1992, is responsible for helping thousands of building owners assess their building’s energy performance and identify ways to save energy, according to the EPA. That’s resulted in over $230 billion in savings on utility bills and preventing more than 1.8 billion metric tons of greenhouse gas emissions.

While Fannie Mae’s recent developments give multifamily building owners information to identify opportunities for reducing energy costs, it’s not enough. Complimentary efforts are needed to ensure the owners have resources, like utility incentives and financing, to support capital investments for improved efficiency. ACEEE’s Multifamily Utility Working Group supports this effort by engaging over 30 utilities around the country to improve or expand their multifamily programs. Our report, Apartment Hunters: Programs Searching for Energy Savings in Multifamily Buildings, provides 10 best practices for designing and implementing successful multifamily programs while addressing common challenges and opportunities for cost-effective energy savings in the multifamily sector.

This December, ACEEE and Energi Insurance Services will also be hosting a special multifamily convening of its Small Lender Energy Efficiency Community (SLEEC), a community of small to mid-size lenders with an interest in participating in the market for energy efficiency investments. This engagement will build on ACEEE’s previous work to assess lender needs for participation, particularly in traditionally underserved markets. There will be a particular focus on the potential roles of technical assistance, policy, research, and private sector product development. We will be highlighting our efforts in building and developing this community and resources for lenders in a future blog post.

We have come a long way in terms of learning more about energy use and trends in this market and recent developments indicate continued success in reaching multifamily customers. Fannie Mae’s efforts, as well as the work of others, like the peer-exchange communities convened by ACEEE, are helping to collect, analyze, and share the information needed to transform the way multifamily buildings use energy.