Using $2.9 million in seed funding from the U.S. Department of Energy’s (DOE’s) Better Buildings Neighborhood Program, the Virginia Department of Mines, Minerals, and Energy (VDMME) set out to overcome marketplace barriers and catalyze home energy improvements in different regions of the state.
Three regional energy alliances operated individual pilot programs to address local needs and barriers: the Local Energy Alliance Program (LEAP) operated in Arlington County and the City of Charlottesville; the Community Alliance for Energy Efficiency (cafe2; a subsidiary of Community Housing Partners) served the cities of Roanoke and Blacksburg; and the Richmond Regional Energy Alliance (RREA) operated the program in Richmond, the state capital. VDMME and the Southeast Energy Efficiency Alliance provided oversight for all three. VDMME also joined with state energy programs (SEPs) in Alabama, Massachusetts, and Washington to share knowledge and lessons learned among the four states’ programs.
Virginia’s three residential energy programs were designed to target communities with limited upgrade capacity and educate homeowners about the benefits of home energy upgrades. The LEAP program employed a paid membership structure for contractors, charged them fees for aggregated goods and services purchasing, and monetized efficiency gains in the voluntary carbon market. The cafe2 model mirrored that of a trade association by providing marketing, education, and certification standards. The RREA model focused on outreach and community engagement, partnering with local organizations to promote home energy upgrades.
All three alliances operated as intermediaries between homeowners and contractors, with varying levels of intervention. LEAP was intimately involved with its pre-approved network of contractors, while RREA was initially hands-off in regard to both contractors and homeowners. The financing and marketing and outreach strategies also varied; efforts were tailored to local consumers and communication outlets.
(July 2010 to September 2013)
Virginia piloted three different local approaches to encourage upgrades in three different regions.
- Residential Program Design: The LEAP program trained its network of pre-approved contractors in Charlottesville and Northern Virginia to use the Energy Performance Score (EPS) tool for energy assessments. LEAP installers were required to achieve a 20% reduction in energy use, and LEAP staff performed quality assurance checks of completed upgrades. The cafe2 program focused on: educating Roanoke and Blacksburg homeowners about available energy services; providing free in-home consultations; and assisting participants throughout the assessment and upgrade process. In Richmond, RREA experimented with different service models, ultimately providing energy coaches to assist homeowners throughout the upgrade process.
- Marketing and Outreach: LEAP employed an array of strategies to market its program offerings. The program found the most success in its Northern Virginia Home Energy Makeover Contest, which allowed homeowners to enter to win energy improvement measures at no cost. Winning homeowners served as “energy champions” to inspire their neighbors to participate in the program. LEAP also partnered with Arlington County to deliver a bill stuffer to homeowners, complete with a $250 energy assessment rebate and a letter from the county supporting the program. LEAP also conducted workshops, sent newsletters, participated at community events, and utilized radio advertising. The cafe2 program used several strategies, including hosting Coffee and Conversation events, where staff led residents in home energy improvement discussions, and placing yard signs in front of homes that completed upgrades. RREA used a home energy makeover contest to educate homeowners and drive demand. RREA also engaged faith-based institutions and neighborhood associations in its community outreach efforts.
- Financing: Each of the three alliances reconfigured their financial offerings during the course of the program to better suit the needs of local homeowners.
- Customers of the LEAP program were able to access up to $1,000 in rebates for home energy improvements, as well as additional incentives during special events. LEAP also partnered with local credit unions to offer an array of loan products for energy improvements.
- At its outset, the cafe2 program in Roanoke and Blacksburg offered a $500 rebate for home energy assessments and up to $1,375 in rebates for installing recommended measures. To simplify the upgrade process for customers, this rebate structure was revised to a single $3,000 maximum rebate that incentivized more comprehensive projects. Finally, the rebate structure was adjusted to $250 for assessments and 20% for actual project costs. The cafe2 program supplemented its rebates with a loan loss reserve fund and the low-interest PowerSaver loan product, as well as partnering with the Virginia Tech Electric Utility to experiment with on-bill financing.
- In Richmond, RREA’s program began with a $1,000 rebate for energy improvement work, but staff found that customers were deterred by the high upfront cost of the energy assessment. In response, RREA offered a $250 rebate for assessments and an additional $500 for improvement measures. RREA also partnered with a Philadelphia-based financier to provide a loan product for participating customers.
- Workforce Development: Due to the lack of contractor capacity, the programs placed major emphasis on professional trainings and worked with partners to provide workforce development opportunities. Energy consulting firm Advanced Energy provided technical training for contractors in each of the three programs, and Earth Advantage Institute, a nonprofit specializing in green building education and certification, trained participating contractors and assessors on the use of the EPS platform. Real estate professionals were also trained on EPS and the benefits of energy efficiency in housing. The cafe2 program received additional funding from DOE to provide no-cost Building Performance Institute (BPI) certification and energy efficiency installation trainings for contractors in Blacksburg and Roanoke. In Charlottesville, LEAP engaged local contractors and institutions and developed a construction academy for home energy performance services.
By fostering three distinct programs and tracking their results, Virginia was able to better determine which efforts had the most impact. Lessons learned include the following:
- Invest in partnerships. Staff members of Virginia’s energy efficiency programs were surprised at the intensive amount of time and energy required to develop partnerships for their programs. Yet staff also found that partnerships were the key to catalyzing energy improvement projects. Community organizations, local businesses, residents, and utilities were all essential partners.
- Build off existing networks when possible. Program staff recommended using existing networks and infrastructure to streamline the program and gain legitimacy. In retrospect, one program noted that becoming a sponsor of the Home Performance with ENERGY STAR® (HPwES) program would have been far more beneficial than building its brand from scratch.
- Document clear standards for engagement. Virginia found that in areas with nascent energy efficiency markets, programs must establish clear guidelines for their interactions with partners and contractors by developing memoranda of understanding to formally agree upon the processes for energy assessments, upgrades, communication, billing, and data collection.
- Education is paramount. Homeowners’ lack of knowledge on energy efficiency was a primary barrier to participation, which led to a lack of confidence regarding the return on investment and a lack of trust for contractors. The energy coaches helped overcome this barrier.
- Focus locally. Virginia’s three programs were tailored to suit specific regional areas. With this localized focus, the SEP was able to effectively build capacity for energy improvements and gain a better understanding of the local marketplace barriers and how to address them.
Many of the efforts that the three Virginia programs undertook to create demand, build local capacity, and perform home energy improvements will continue in the future.
- The three alliances plan to collaborate in forming a statewide network for energy efficiency improvements based on the LEAP model and operating under the Virginia HPwES program. In addition to support from local governments and private foundations, the network will collect revenue from in-home energy consultations and contractor and lending referral fees.
- LEAP has secured several grants for future operations from the City of Charlottesville, VDMME, and DOE’s State Energy Program.