Denver Energy Challenge
Location: Denver County, Colorado
Seed Funding: $ 4.8 million—a portion of Boulder County's $25 million funding
Target Building Types: Residential (single-family) and commercial (small business)
Energy Advisors Help Denver Homes and Businesses Aim High for Energy Savings
Residents in the Mile-High City are being challenged to reach new heights when it comes to their homes' and businesses' energy efficiency. As a Better Buildings Neighborhood Program sub-grantee to Boulder County, Colorado, the Denver Energy Challenge is using nearly $5 million in seed funding from the U.S. Department of Energy (DOE) and leveraging its local partnerships to help residents and businesses in the City and County of Denver to reduce their energy use by 15% or more. Program participants receive access to free energy advising and exclusive, low-cost loans to help make much-needed energy improvements.
Program Design: Free Energy Advising Eases the Process
Driving Demand: Mixed Marketing Techniques Pique Customer Interest
Financing: Low-Cost Energy Loans Sweeten the Deal
Workforce Development: Creating a Skilled Workforce and Reducing Paperwork
Free Energy Advising Eases the Process
The Denver Energy Challenge is the first unified effort by the City of Denver to consolidate all of its energy efficiency programs. It targets middle- to upper-income residents in single-family homes and small businesses—a demographic not yet served by any existing programs and for whom improving comfort and managing energy costs are very important.
A cornerstone of the program is free energy advisors who guide participants through the process and facilitate energy efficiency improvements. Home energy assessments are not required for participation, but the energy advisors facilitate the process for those customers who elect to have an assessment by referring them to a pool of independent raters. Following a home assessment, energy advisors can also review results and help customers prioritize upgrades. Through phone consultations and interactive video chats, energy advisors also help identify available rebates and financing options, locate qualified home improvement contractors, review bids, provide education on energy improvements, and even connect qualified residents with other free or subsidized energy improvement services outside the Denver Energy Challenge. This type of hands-on assistance seems to be working: three out of every four customers who have worked with an energy advisor go on to complete a home upgrade. Since the program began in 2011, more than 6,100 homes have completed upgrades.
Mixed Marketing Techniques Pique Customer Interest
The Denver Energy Challenge has increased the visibility of the program and its resources in a variety of ways. Face-to-face marketing techniques, such as promoting the benefits of program participation at public events, have helped drive demand for energy efficiency upgrades. The program targets home tours throughout Denver, organized by local neighborhood organizations, to showcase upgrades such as programmable thermostats, weather stripping, insulation, and ENERGY STAR® qualified appliances to potential customers. Through a partnership with Xcel Energy, the local utility provider, the program reached out to approximately 20,000 utility customers with direct mailings that advertised the benefits of home energy upgrades, as well as available financing options.
Program administrators also encourage participation using several community-based social marketing strategies, including creating behavioral "norms" to increase the likelihood that people will participate, such as yard signs promoting homeowner participation in the Challenge to their neighbors.
On the commercial side, the Denver Energy Challenge targeted small business owners first with energy advisors, and expanded to also serve larger business owners that may already have staff responsible for energy efficiency and corporate sustainability. In addition to reducing their energy bills, participating businesses benefit from publicity that the program offers at recognition events. Each business also receives a window decal that identifies the building as a participant of the program.
Low-Cost Energy Loans Sweeten the Deal
In August 2012, the program began offering low-cost loans to help home and business owners fund energy efficiency upgrades through a partnership with Elevations Credit Union. Starting interest rates as low as 2.75% for residents and 3.75% for businesses are available, with terms ranging from three, five, seven, and 10 years. The loan process includes guidance from program energy advisors to help residents and businesses prioritize measures and implement projects. Loan products can be used to finance more than 40 types of upgrades through the Denver Energy Challenge, including insulation and air sealing improvements, energy-efficient HVAC equipment, water heaters, windows, and renewable energy systems. To make participation ever easier, the credit union offers a straightforward loan application process, including waiving the property appraisal requirement, which removes a significant barrier to participation.
Due to the popularity of these loan offerings, home improvement contractors outside the program's approved list can now offer their customers access to the low-cost energy loans as well. These loans are a sustainable way to ensure that residents and businesses have access to capital in order to complete energy upgrades for years to come.
Creating a Skilled Workforce and Reducing Paperwork
Because contractors continue to be the program's largest source of new leads, the Denver Energy Challenge has invested in education and training opportunities for its approved list of residential and commercial contractors. Subjects range from installing insulation and air sealant to using utility rebates to maximize return on investment. Contractors benefit from partnering with the Denver Energy Challenge in several ways: reduced time handling rebate paperwork; expanded offerings of energy loans and rebates to customers; built-in customer follow-up mechanisms; and greater awareness of and demand for energy upgrades among potential customers. The Denver Energy Challenge advisors help keep projects moving and fill out paperwork that can sometimes fall to contractors, freeing up their time for more energy efficiency projects. Denver Energy Challenge participants on the residential side have the option to work with one of the program's approved contractors, ensuring that completed projects meet a high quality standard. The Denver Energy Challenge also reviews projects for quality assurance once jobs have been completed.
Thomas Herrod, Grant Manager
U.S. Department of Energy
Better Buildings Neighborhood Program