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Cambridge Multifamily Energy Innovation Project

Cambridge Multifamily Energy Innovation Project. 11.S948 Terms of Reference Summary MIT Energy Efficiency Strategy Project Director: Harvey Michaels Researchers: Ryan Cook, Alexis Howland, Adi Nochur Manager: Brendan McEwen. INTRODUCTION.

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Cambridge Multifamily Energy Innovation Project

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  1. Cambridge Multifamily Energy Innovation Project 11.S948 Terms of Reference Summary MIT Energy Efficiency Strategy Project Director: Harvey Michaels Researchers: Ryan Cook, Alexis Howland, Adi Nochur Manager: Brendan McEwen

  2. INTRODUCTION PROJECT GOAL: ENERGY PROGRAM DESIGN FOR EXISTING MULTIFAMILY HOUSING TIMELINE • FALL 2012 – BACKGROUND RESEARCH & PRELIMINARY CONCEPT DEVELOPMENT • SPRING 2012 - PRACTICUM • JUNE 2012 – DELIVERY OF DETAILED PROGRAM DESIGN

  3. PROGRAM COMPONENTS • ENERGY DISCLOSURE • ENERGY MAP AND DISCLOSURE PLATFORM • COMMUNITY BASED MARKETING & ENDORSEMENT • IMPROVED COMMUNICATION BETWEEN UTILITY & PARTNERS • ON UTILITY BILL FINANCING • COMPREHENSIVE SCOPE • EXPLORE UPGRADE REQUIREMENTS

  4. BACKGROUND ENERGY EFFICIENCY PROGRAMS MassSAVE Homes • OUTREACH • Cities • Community Groups • Utility advertising • CDC networks • Etc. WAP MF Weatherization MF Market Integrator MF HVAC Fuel Switch LEAN (low income MF) Commercial MA Green Retrofit Initiative

  5. BACKGROUND ENERGY EFFICIENCY PROGRAMS 1-4 unit market rate MassSAVE Homes • OUTREACH • Cities • Community Groups • Utility advertising • CDC networks • Etc. WAP MF Weatherization MF Market Integrator MF HVAC 5 – 20 unit market rate Fuel Switch LEAN (low income MF) Commercial MA Green Retrofit Initiative >5 Low Income

  6. BACKGROUND ENERGY EFFICIENCY PROGRAMS

  7. BACKGROUND ENERGY EFFICIENCY PROGRAMS

  8. THE STATE OF HOUSING IN CAMBRIDGE RENTALS ARE 65% OF MARKET 95% OF RENTALS ARE MULTI-UNIT 33% OF RENTALS ARE 2-4 UNIT 27% OF HOUSING UNITS ARE CONDOS STUDENTS ARE 27% OF ADULT POPULATION 53% OF RENTAL HOUSEHOLDERS ARE UNDER 35 OVER 60% OF RENTERS HAVE LIVED IN CURRENT HOME LESS THAN FIVE YEARS 52% OF RENTAL UNITS BUILT BEFORE 1940 13% OF RENTAL UNITS USE OIL HEATING HOUSING MARKET DOMINATED BY RENTALS YOUNG RENTAL DEMOGRAPHIC IN TRANSITION HOUSING STOCK PRIME FOR EFFICIENCY

  9. LOCAL BARRIERS TO EFFICIENCY MULTI-FAMILY HOUSING A HARD-TO-REACH MARKET IN ENERGY EFFICIENCY • SPLIT INCENTIVES AND THE “LANDLORD-TENANT PROBLEM” • TRADITIONAL ENERGY EFFICIENCY PROGRAMS HAVEN’T CRACKED THROUGH • DESPITE POTENTIAL FOR GREAT SAVINGS, A MARKET FAILURE LOCAL RENTAL HOUSING MARKET PRESENTS SPECIFIC DIFFICULTIES • NO COORDINATION AMONG MANY SMALL PROPERTY OWNERS • YOUNG, MOBILE RENTAL DEMOGRAPHIC • ADDITIONAL RULES FOR CONDOMINIUMS Creative Commons License, http://www.flickr.com/photos/bradywahl/3942246432/

  10. RECOMMENDATIONS

  11. DATA TOOL: ENERGY MAP FOR RENTALS ACCESSIBLE, UNDERSTANDABLE VISUALIZATIONS • Energy data • Building characteristics IMPACT • Renters can assess energy costs • Establish social norm and influence landlords • Allow contractors/community organizations to target “gushers”

  12. COLLECTING ENERGY DATA – 2 OPTIONS 1. UTILITY AUTOMATIC POPULATION • ConEd in New York has agreed to release data for multi-tenant buildings 2. GET DATA FROM CURRENT TENANTS • Manually enter • Enter e-bill information • Challenge when tenants move

  13. COLLECTING ASSET DATA POTENTIALLY MULTIPLE SOURCES • Building owner, manager • City databases & tax assessor record • Building energy models • Quick audit data • Audit matching from historical databases

  14. NEXT STEPS: SPRING SEMESTER DETERMINE BEST DATA COLLECTION METHOD EVALUATE ASSET MODELS EVALUATE BENCHMARKING OR PERFORMANCE RATINGS COMPONENTS OF AN RFP DEMO MAP • Different layers could include efficiency potential and savings, available NSTAR rebates • Possibly build on Cambridge Solar Map platform

  15. ORGANIZING STRATEGIES & MARKETING INVESTIGATING VIABILITY OF INNOVATIVE MARKET APPROACHES • INCENTIVIZE COMMUNITY ORGANIZATION PARTNERSHIPS • PROVIDE MECHANISMS FOR CERTIFICATION AND RECOGNITION • UTILITIZE DEADLINE-BASED MARKETING • ORGANIZE BULK PURCHASING CREATING ROOM FOR EXPERIMENTATION IN PROGRAM DESIGN • WHAT ARE DIFFERENT STRATEGIES DESIGNED TO ACCOMPLISH? • HOW MIGHT THEY BE LEVERAGED IN THE LOCAL CONTEXT?

  16. NEXT STEPS - MARKETING MARKET RESEARCH • FOCUS GROUPS WITH STAKEHOLDERS TO UNDERSTAND RANGE OF INTERESTS AND ISSUES • INTERVIEWS WITH PREVIOUS PROGRAM PARTICIPANTS TO UNDERSTAND DEMAND DRIVERS LOOKING FOR FOOTHOLDS IN THE MARKET • CREATE ENGAGEMENT STRATEGIES FOR DIFFERENT MARKET SEGMENTS

  17. A MARKET SEGMENTATION APPROACH

  18. FINANCING FINANCING CHALLENGES TO MULTIFAMILY EFFICIENCY INCLUDE: • High upfront costs • Split incentives between landlords and tenants • Customer barriers to credit • Lack of energy savings data for lenders EFFECTIVE PROGRAMS THEREFORE MUST: • Create incentives for participation • Reduce overall financial risks • Provide access to energy savings data

  19. ON-BILL FINANCING: A PATHWAY FORWARD ADVANTAGES • Eliminates upfront cost barrier • Ideal: monthly savings >= repayments • Potential to reduce split incentive barrier • Utility payments as proxy for creditworthiness • Regularity of utility payments diminishes risk ON-BILL LOANS VS. ON-BILL TARIFFS • Loans: non-transferable, stay with borrower • Tariffs: Tied to property via the meter • Only tariffs address split incentive

  20. RECOMMENDATION: ON-BILL TARIFF POTENTIAL MODEL: MPOWER FUND (PORTLAND, OR) • Focused on Multifamily market • Pilot goal of retrofitting 30 buildings totaling 2,500 units by April 2014 • Building owners and utilities enter into 10-year energy service contracts IMPORTANT CONSIDERATIONS • Fund management – A non-profit SPE? • The source of funds – Rate payer funds, CDFI, market-rate lenders • Underwriting criteria • Security • Establishing appropriate utility billing systems - On-bill repayment can often require complicated modifications to utility billing systems. NSTAR resistant.

  21. FACILITATING DEEP GREEN RETROFITS CHALLENGES • Unit level rapid upgrades; optimize infrequent deeper renovations • Expensive, emerging technical opportunities • Challenge insulating masonry walls TECHNICAL OPPORTUNITIES • Potential for super-insulative, thin interior insulation • Explore solutions to Multi-unit hydronic heating • Improved controls • Heat source conversion – Fuel cell? In-room electric heat pump?

  22. FACILITATING DEEP GREEN RETROFITS POTENTIAL PROGRAM COMPONENTS • Full cradle-to-grave project management • Benchmarking & prioritization • Contractor project management • Financing • Ongoing capital asset management assistance • Energy information feedback & ongoing engagement Ongoing project management Bench-marking Tune up existing HVAC systems (short term) Re-tenanting upgrades (~1-5 years) Capital asset maintenance (e.g. Exterior wall; many year time frame) Occupant / building manager behavior change & information feedback Potential basic program components.

  23. GOVERNANCE PROGRAM DELIVERY OPTIONS • Extend & expand MA Green Retrofit Initiative • Integrate into Utility Program Portfolio • City led non-profit program – revamped CEA POTENTIALLY IMPORTANT ELEMENTS • Energy disclosure – automated utility data population • Upgrade mandate – grant legislative authority to require upgrades

  24. THANKS! Credit: Rockcreek. CC

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