Community Resource Project
Heschong Mahone Group
Willdan Energy Solutions
Sacramento Ramps Up Energy Efficiency in Two Neighborhoods
Since 2010, the Sacramento Municipal Utility District (SMUD) has used Better Buildings Neighborhood Program seed funding to offer customers rebates for energy efficiency upgrades through an initiative known as "Sacramento Ramp Up." But in 2011, SMUD upped the ante for two target neighborhoods through its Neighborhood Performance Program, which features rebate incentives to encourage deep energy savings of up to 50%. Results and lessons learned from the program will then frame a model for a cost-effective replication of the program to be used in other Sacramento communities.
The SMUD Neighborhood Performance Program offers residents and businesses in the Downtown/East Sacramento and Rosemont neighborhoods assistance to achieve up to 20% energy savings through energy efficiency upgrades. The two neighborhoods each feature a mix of single-family and multifamily housing, as well as commercial buildings, with similar construction, features, and age. The architectural similarities have allowed contractors to purchase materials and equipment in bulk at a lower cost and pass the savings on to customers.
SMUD customers who are not located in the two target neighborhoods can still pursue energy efficiency upgrades through the utility's separately funded Home Performance Program, Home Performance Program–Multifamily, and commercial offerings.
Program Design: Making it Easy—Single Contractor and Pre-Packaged Options
Financing: Direct Loans and Incentives Encourage Deeper Energy Savings
Driving Demand: Local Partnerships Play Into Program Popularity
Making it Easy—Single Contractor and Pre-Packaged Options
To save homeowners the task of screening contractors themselves, one contractor was designated to complete the home energy upgrades in each of the two neighborhoods through the Neighborhood Performance Program's competitive bidding process. Comfort City was selected for the Downtown/East Sacramento neighborhood, and Brower Mechanical was selected for the Rosemont neighborhood. For the commercial side of the program, SMUD contracted the utility's regular commercial partner, Willdan Energy Solutions, for both neighborhoods. Each contractor completes the work in its assigned neighborhood(s), using bulk discounts wherever possible.
Customers can receive a free energy assessment performed by their neighborhood's designated contractor, followed by a report with recommended efficiency improvements and the estimated energy savings. Reports break down the project cost, the amount that will be covered by rebate(s), and the payback period, or how quickly the investment will pay for itself.
Residential customers who elect to complete an upgrade can choose from three different packages with various cost commitments (i.e., Good, Better, Best), depending on which one best suits their needs and budget. The Good Package can achieve more than 12% energy savings and includes air sealing, attic insulation, duct testing/sealing, water heater/piping insulation, and a smoke and carbon monoxide alarm. With an energy savings potential of more than 20%, the Better Package offers homeowners everything included in the Good Package, plus a high-efficiency air conditioner, a high-efficiency furnace, and a new water heater. The Best Package offers a potential energy savings of more than 35% by combining the Good and Better Packages, then adding replacement windows and—based on the customer's needs or desires—solar panels or a solar water heater.
Direct Loans and Incentives Encourage Deeper Energy Savings
As part of its regular program assistance, SMUD eases initial upgrade costs by offering customers direct financing for energy efficiency upgrades. Secured and unsecured loans range from $3,000 to $30,000, depending on the type of equipment or product installed. To increase the speed of loan approval, and thus project completion, SMUD's participating contractors work with customers to complete the loan application and submit it to SMUD along with the equipment paperwork.
Rebates upon upgrade completion further decrease customers' overall upgrade costs. Rebates for commercial projects, for example, can cover up to 80% of the upgrade costs. Small to mid-size businesses that use less than 300 kilowatt-hours per month can qualify for comprehensive upgrades to boost the energy efficiency of lighting, refrigeration, and heating, ventilation, and air conditioning systems. Depending on the scope of work and level of energy savings achieved, residential rebates can total up to:
- $2,500 for 20% energy savings
- $3,000 for 25% energy savings
- $3,750 for 30% energy savings
- $4,750 for 35% energy savings
- $6,000 for 40% energy savings
- $7,500 for 45% energy savings
- $9,000 for 50% energy savings
If the proposed work scope does not achieve an estimated minimum of 20% savings, there is still the possibility to receive $1,500 in rebates by performing required measures. In addition, more than 80 qualifying low-income households located in the two neighborhoods are eligible for free weatherization and upgrade services valued up to $3,500.
Local Partnerships Play Into Program Popularity
Program officials have worked to increase public awareness of SMUD's various energy efficiency programs by forming partnerships with community leaders and popular local organizations, as well as holding public events. According to SMUD Project Manager Christie Rodriquez, nearly 6,000 people have been reached through the utility's attendance at 15 separate community outreach events, ranging from local park concerts to homeowners association meetings.
To further this outreach, SMUD highlights the benefits of energy savings, lower utility bills, and improved health, safety, and comfort through a suite of marketing materials designed for each target audience, including brochures, fliers, lawn signs, door hangers, and blast e-mail campaigns.
Additionally, nearly 20 trade contractors actively work for the Downtown/East Sacramento and Rosemont neighborhoods as part of the Neighborhood Performance Program, with more being added as needed.
U.S. Department of Energy
Better Buildings Neighborhood Program