Low-income efficiency programs that work

Energy efficiency programs are especially important for low-income customers. Well-designed programs can help relieve the significant energy burdens faced by low-income families and also provide benefits like increased comfort and healthier homes. But getting these programs right takes careful planning. Low-income customers face several major barriers to participation in utility efficiency programs, ranging from lack of resources for efficiency upgrades to aging housing stock that may need health and safety improvements.

In a new report, we highlight utility programs that are successfully reaching a large number of low-income customers and delivering deep energy savings to participants. These programs are located across the country and serve both electric and gas customers. They are delivered to customers by utilities, community action agencies, and statewide administrators. By conducting interviews and digging through data on participation, energy savings, and program spending, we distilled the key factors to which low-income program implementers credit their success. These factors include the following:

Simplifying interactions by assigning a single point of contact for customers and for contractors. Some programs work with only a single contractor, simplifying communication and ensuring a strong relationship between contractor and utility. Others noted that simplifying customer-facing communication is key. In Ohio, agencies implementing the Home Weatherization Assistance Program also deliver ratepayer-funded electric and natural gas efficiency programs, making comprehensive efficiency upgrades convenient and accessible for customers.

Offering targeted programs to different market segments. Several of the utilities and program implementers we interviewed offer a portfolio of low-income energy efficiency programs that focus on the unique needs of different customer types, including high energy users, elderly customers, renters, and owners of multifamily buildings. CenterPoint Energy in Minnesota, for example, offers five programs in its portfolio of low-income programs, including programs focused on non-profit affordable housing, multifamily housing, and single-family housing.

Emphasizing quality control and training. Several program administrators have strict quality control requirements for all projects rather than just a sample of projects, and many dedicate funding to ongoing training of contractors and partners. In Massachusetts, lead community action agencies in the Low-Income Energy Affordability Network (LEAN) employ full-time trainers to work with subcontractors across the state. LEAN also does quality control on every completed job.

Leveraging diverse funding sources to focus on comprehensive fuel-neutral upgrades. Many programs combine funding from several sources to address a comprehensive set of measures at each project site that might not be feasible with only a single funding source. Energy Outreach Colorado provides services to low-income residents in utility territories across the state, combining funding from utilities, the federal weatherization program, state and regional efforts, and private donations. This allows the nonprofit to deliver a comprehensive set of efficiency measures and address health and safety issues that might not be eligible for improvements using utility funding alone.

Forming partnerships to better market and deliver services to hard-to-reach customers. Many of the utilities we surveyed noted that they have formed partnerships with food banks, health organizations, and nonprofits like Habitat for Humanity. DTE Energy, in Michigan, also partners with the Alliance for Deaf Services to help promote its programs in American Sign Language and equip installers with technology that helps them communicate with deaf customers.

Other keys to success also rose to the top in our report, including coordinating statewide program delivery, accommodating health and safety measures, and prioritizing measures that achieve deep savings.

The programs we profile have had significant success, but many program implementers still noted the trade-off between maximizing participation and delivering deep savings to each program participant. Some have addressed the issue by including both low-cost direct-install measures and deep-retrofit programs in their low-income energy efficiency portfolios. Ultimately, however, many of these programs are limited by funding and need to choose the best way to direct their dollars and maximize impact.

Utilities seeking to deliver quality programs to low-income customers can look to the proven strategies described in our report to expand program reach and deliver deep savings. Regulators and lawmakers have a role to play, too. They can ensure that utilities are adequately funded to get the job done, providing a reliable funding source for low-income energy efficiency programs over the long term.