CAMBRIDGE MULTIFAMILY PILOT DESIGN: STRATEGIES FOR ENGAGEMENT, OUTREACH, AND FINANCING

1. Ryan Cook Caroline Howe Adi Nochur Sophie PanDara Yaskil March 22, 2013 CAMBRIDGE MULTIFAMILY PILOT DESIGN: STRATEGIES FOR ENGAGEMENT, OUTREACH, AND FINANCING

2. Program Parameters: Marketing and Outreach How can we design a pilot program that… • Makes it easy for residents to talk to landlords and condo associations about efficiency • Leverages existing community networks and groups • Takes advantage of Cambridge’s unique resources and demographics • Leverages the power of energy data

3. Program Parameters: Project Financing How can we design a pilot program that… • Incentivizes residents and landlords to encourage each other to adopt energy efficiency (overcomes split incentive barrier) • Reduces or removes the up-front cost paid by building owners and residents • Is scalable but grounded at the community level (leverages other sources of funds) • What does “grounded at the community level” mean?

4. Marketing Strategies: Amplifying Local Success Stories Problem • Residents and owners are skeptical about the return on investment of efficiency work • Residents don't have incentives to share their stories or encourage participation of neighbors Potential Solutions • Advertising and amplifying local success stories • Asking previous program participants to advertise their energy savings • This is an interesting idea, potentially powerful. In the remaining 1.5 months, how can we test its value with owners? & can we suggest a system for Nstar & the City to get referrals & have people tour past participant homes? Could this involve some surveying of past participant willingness & levels of satisfaction? • Tours of efficient homes or participation in retrofits • Incentivizing participants to recruit neighbors • Tiered incentives based on participation, similar to Solarize

5. Marketing Strategies: Empowering Energy Champions Problem • The primary beneficiary of energy efficiency (residents) often have difficulty gaining the support of landlords and condo owners who must approve of any home improvement Potential Solutions • Targeting renters and condo owners to conduct their own audits, and giving them customized resources to bring to their landlords/condo boards • This is a very interesting idea. It gets back again to crowd-sourcing assessment data. But it begs the question, what information can be crowd-sourced with some guidance (make & model of furnace, heating distribution system, refrigerator, lighting type, etc.) and what needs an auditor (extent of air-leaks). • Also, what inspires renters to actually do this? Can we pay people a little bit of money? • What is the value add – do we ultimately want a database of all the energy upgrade opportunities in every building in Cambridge? (I think that is an enticing idea, but we have to be honest that crowd-sourcing all that data is difficult). • This part of your projects relates closely to the Treatment & Transparency group. It needs to be developed in tandem. • Pro-forma resulting from audit • Comparison to energy costs in rest of neighborhood

6. Marketing Strategies: Using Local Strengths and Institutions Problem • Cambridge has powerful institutional actors that have been slow to act on efficiency Potential Solutions • Work with faith groups and churches to distribute information, particularly those that have worked with HEET • Work with MIT and Harvard [I would expand to all area universities. Have one central service they can all take advantage of] housing offices to track and advertise homes with low energy costs as a service to students. Take advantage of open-data ethos of MIT students to organize data disclosure drive and hack-a-thon

7. Marketing Strategies: Leveraging Energy Data Problem • Information about estimated energy costs typically aren’t available to prospective residents Potential Solutions • Use community-based social marketing approaches to organize a data-collection effort [Please note that Nstar could potentially share data on ALL buildings (in aggregate, above a certain # units) OR that we could crowd-source data. I think their may be traction to share all data, and we don’t want to only suggest a CBSM-driven crowd-sourcing effort. • Distribute information about “typical energy costs” to motivate residents and landlords [Nstar & Opower already distribute data about “typical energy costs”. How else could these costs be made more palpable? Could the City/Nstar/MIT & other universities promise to publicly disclose in 5 years, giving worst performing buildings chance to upgrade free of cost?]

8. Financing Strategies: Employing Innovative Financing Mechanisms Problem • Even with Mass Save incentives retrofits can entail a substantial up-front cost • Split incentives between landlords and tenants prevents energy efficiency uptake Potential Solutions • Employ new financing mechanisms to address barriers: • On-Bill Financing attached to meter • PACE/Energy Revolving Loan Funds [PACE doesn’t have to be a revolving loan fund. It could be bonded by the City & other financing sources are available]. • Green Leases • Can we do some market research around how building owners respond to these different options? Say ~20-30 short telephone surveys? • We heard from Peter Shapiro that he felt that providing template Green Lease language wouldn’t help, as landlords are very hesitant to introduce new lease terms, or build expectations that properties are going to be improved.

9. Financing Strategies: Leveraging Additional Funding Streams Problem • Utility ratepayer funds alone are not always sufficient to bring energy efficiency programs to scale Potential Solutions • Partner with financial institutions and investigate alternate sources of capital • Create fund structures that pool ratepayer funds with other revenue streams and ensure recapitalization • Consider designating a third-party fund manager • These are pretty high level ideas, not really “solutions” that may be novel to Nstar & the city. I think you either need to propose to 1) Do a detailed design of what this fund looks like (which might be difficult, given that we have not evinced a great deal of expertise regarding what it takes to bring a financing mechanism to market, OR 2) Do some market research into how building owners respond to these options. We can talk about these options if you call me today (or anytime in the future).

10. Potential elements and actions • Develop processes with MIT and Harvard housing offices to create listing of energy-efficiency off-campus homes • Organize social marketing campaign to organize energy data donations, potentially based around an energy data hack-a-thon at MIT • Work with HEET and NSTAR to identify previous participants willing to act as success stories, sharing both qualitative and quantitative information • Work with realtors and listing services to track and advertise homes that have had efficiency retrofits and advertise this in the housing market • Investigate new formats for no- or low-cost financing [investigate how? I would suggest that market research into building owner’s responses could be valuable. There has already been so much work at the state level on PACE & OBF as options, and Nstar & city staff are very familiar with how these mechanisms work. Just suggesting to them that they could implement one or the other isn’t value-add.]

11. Questions for NStar and CSG • Not sure if we need this slide • Brendan thinks we do! • Would it be possible to conduct outreach to previous program participants through NStar, asking if they would like to be used as success stories in a local pilot? • What is NStar’s current view of on-bill financing? Would they be willing to try to implement it as part of a pilot program?