Nearly 70% of households in Maine rely on fuel oil as their primary energy source for home heating, more than any other state. Coupled with the state's long, cold winters, homeowners’ dependence on oil renders them particularly vulnerable to fluctuating fuel costs. Especially for the state’s aging multifamily housing stock—which includes many buildings with little or no insulation, drafty windows, and significant air leaks—energy efficiency is vitally important.
Using $4.5 million in seed funding from the U.S. Department of Energy’s Better Buildings Neighborhood Program, the Governor's Office of Energy Independence and Security, through Efficiency Maine Trust, created a Multifamily Efficiency Program (MEP). MEP focused on financial incentives to help Maine landlords invest in energy efficiency to lower their monthly utility bills and improve comfort for their tenants.
Efficiency Maine Trust modeled MEP after the state’s successful Home Energy Savings Program for single-family homes, which encouraged home energy upgrades by providing cash incentives and financing opportunities to homeowners who invest in energy efficiency. MEP expanded these services to small- and medium-sized multifamily properties. Through its partnerships with contractors throughout the state, the program offered free benchmarking and energy assessments to help building owners save at least 20% on energy use by identifying and implementing an upgrade plan.
In addition to offering rebates of up to $1,400 per upgraded apartment, the program also managed a $1 million loan loss reserve fund. MEP drove demand for these financial products through community events, an easy-to-use website, and partnerships with landlord associations. These efforts allowed MEP to address unmet demand for multifamily building upgrades and to establish a self-sustaining, market-driven program that demonstrated the value of energy efficiency to other property owners.
(July 2010 to March 2014)
Efficiency Maine Trust stimulated the upgrade market for multifamily residences using financial incentives, community outreach, and formal partnerships with contractors and professionals.
- Program Design: MEP relied on a network of approved partners—qualified energy professionals and home performance contractors—to help move projects through the pipeline from assessment to upgrade. The program had two main components—benchmarking and the development of an Energy Reduction Plan (ERP). After partnering contractors provided a free building energy assessment using the ENERGY STAR® Portfolio Manager® benchmarking tool, the contractor used the results of the assessment to develop an ERP, which identified energy efficiency improvements that would reduce a building’s energy use by at least 20%. Approved program partners also provided project quotes with payback period calculations and estimated financing incentives to assist building owners in making investment decisions.
- Marketing and Outreach: MEP recruited participants by building relationships with local and regional landlord associations and by marketing the program using Efficiency Maine Trust’s existing partnerships with the contractor and utility community. MEP developed a website and held informational breakfast meetings in communities throughout the state to provide building owners and potential partners with information about the program.
- Financing: To assist building owners in implementing the suggested efficiency upgrades, Efficiency Maine Trust provided multiple rebates. The program also set up a $1 million loan loss reserve fund to encourage private lenders that hold mortgages for multifamily properties to provide loans for energy efficiency improvements, however there was not interest in this effort. Building owners were eligible for $1,400 for each apartment that received energy upgrades, in addition to receiving up to $200 per apartment upon MEP’s approval of a building’s ERP. These incentives allowed MEP to cover about one-third of the upgrade costs for a typical project.
- Workforce Development: MEP offered several training events for contractors, including courses on multifamily building diagnostics, customer service, sales, and construction management, in addition to offering scholarships for the Building Performance Institute’s Multifamily Building Analyst training course. MEP held calls with its approved program partners to discuss program progress, updates to the program, common issues, and a monthly “Tech Tip.”
In its efforts to overcome barriers to comprehensive energy upgrades in multifamily buildings, Efficiency Maine Trust learned two key lessons that allowed it to improve the MEP:
- Provide opportunities for feedback. By holding focus groups with building owners to gain feedback on the program, MEP learned that the main barrier to program enrollment was the minimum threshold of 20% savings, which excluded many buildings that lacked the necessary capital or the potential for comprehensive energy upgrades. This feedback prompted MEP to include a single-measure upgrade option in the post-grant version of the program.
- Adapt program design to customer needs. Since the program had a very low customer uptake of its financing products or lender interest in its loan loss reserves, MEP realized that loans were not an effective incentive. Because many multifamily building owners had reserves for capital improvements to their buildings, MEP instead focused on providing rebates to entice building owners to use those reserves to finance efficiency upgrades.
Based on the success of MEP, Efficiency Maine Trust is proceeding with a ratepayer-funded version of the program, known as MEP 2.0. This version will incorporate feedback provided by participants and partners and incorporate the following improvements:
- The program will be expanded to provide financial incentives for both single-measure and comprehensive energy upgrades. The new rebates for single-measure upgrades range from $10 for the installation of water-efficient fixtures and energy-efficient lights to up to $4,500 for upgrading to a more efficient boiler.
- MEP introduced tiered incentive levels, which reward greater reductions in energy use with larger rebates, to encourage building owners to reach for higher energy savings and invest in more comprehensive upgrades.
- MEP 2.0 will increase its marketing efforts by building relationships with statewide landlord associations, holding additional community events, providing webinars for building owners, and expanding online and print advertising efforts.