Deep and Continuous Savings: Engaging the Multifamily Market throughout the Building Lifecycle


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TRC's Juliann Summerford and Mark Lorentzen discussed multifamily energy efficiency programs at the 2014 AESP Conference.They addressed expanding upon existing multifamily program channels to encourage deeper and ongoing energy savings by incrementally expanding post-construction program offerings.

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Deep and Continuous Savings: Engaging the Multifamily Market throughout the Building Lifecycle

  1. 1. Deep and Continuous Savings: f Engaging the Multifamily Market throughout the Building Lifecycle Julieann Summerford Mark Lorentzen TRC Energy Services January, 2014
  2. 2. Discussion Points • • • • • • • • State of the multifamily market Why we must serve multifamily? Current multifamily market offerings Program barriers to deep energy savings Framework for deeper energy savings Framework for continuous engagement Emerging building technologies Where to next?
  3. 3. State of the Multifamily Market Sector
  4. 4. State of the Multifamily Market Sector Multifamily 23% 77% Multifamily 25 million Single Family 87 million Total Homes 112 million
  5. 5. State of the Multifamily Market Sector Multifamily Buildings (5+ units ) Density Source: ACEEE Engaging Partners in Energy Efficiency: A Primer for Utilities on Energy Efficiency Needs of Multifamily Buildings and Their Owners
  6. 6. Diverse and Complex Market Ownership • Non-profit • Large corporation • Mom and pop • Condos and coop Meter Structure • Master metered • Individually metered • Advanced submetering MULTIFAMILY HOUSING Rental Market Building Type • For rent • Market rate • Affordable Building Size • • • • • • • Low-rise • Mid-rise • High-rise Garden style Townhouses Apartments Dorms Assisted Living Transitional
  7. 7. Why must we serve multifamily?
  8. 8. Why Important to Serve Multifamily? Under-served market • • 40% of metropolitan areas do not offer programs Program investment disproportionate Lower transaction costs • • Economies of scale compared to single family Serve numerous households in one transaction Potential Savings • Potential energy savings by 2020: – 51,000 GWh of electricity = 20 average size coal power plants – 2,800 million therms of natural gas = non power plant therm usage of California, Oregon, and Washington – $9 billion in savings for property owners and tenants Energy Efficiency and its Relationship to Housing Income in Multifamily Rental Housing, University of Arizona Scaling Up Multifamily Energy Efficiency Programs, ACEEE US Multifamily Energy Efficiency Potential by 2020, Energy Foundation
  9. 9. Current Multifamily Market Offerings
  10. 10. National Multifamily Program Study NYSERDA Multifamily Program Research and Comparative Analysis Data on 50 multifamily-specific energy efficiency programs • • • Research Categories: - Program characteristics - Performance data, as available Sources: Program websites, marketing materials, published program data, evaluation reports, and third party reports (e.g. ACEEE) Emphasis on larger, more sophisticated programs
  11. 11. National Multifamily Program Study Study Reviewed 50 Programs Puget Sound Energy • Energy Trust of Oregon • Focus on Energy • Energy Outreach Colorado • Resource Smart • Ameren • Indianapolis Power & Light Company • ComEd • Nicor Gas • CNT Energy • Illinois Dept. of Commerce & Economic • MD Dept. of Housing & Community Development Opportunity • DC Sustainable Energy Utility • Seattle City Light • Efficiency Vermont • AEP SWEPCO • AEP Ohio • DTE Energy • Consumers Energy • Alliant Energy • Connecticut Energy Efficiency Fund • Georgia Power • Questar Gas• NH Saves • PECO NYSERDA • ConEd • RG&E / NYSEG • National Grid • Mass Save • PSE&G • NJ Green Homes Office • Efficiency Maine • Arizona Public Service • PPL • Entergy Arkansas • MidAmerican Energy • Black Hills Energy • Austin Energy • Oncor • BayREN • SoCalREN • PG&E • SDG&E • SoCal Edison • SoCal Gas • SMUD • PA Housing Finance Authority *Note: green shading mark states where a program included in study is located; those programs may not be state-wide
  12. 12. National Multifamily Program Study Program Categories • Direct Install – free installation of basic measures • Rebates –individual, a la carte upgrades • Whole Building – minimum savings requirement and/or a mandate to upgrade a substantially all systems in building • Other – alternate delivery methods
  13. 13. National Multifamily Program Study Distribution of 50 Programs, by Program Type 8 program offer rebates only (16%) 14 programs offer a combination of rebates and direct install (28%) 11 programs offer whole building, rebates, and direct install options (22%)
  14. 14. National Multifamily Program Study Whole Building Programs • Many whole building programs are offered for new construction only – % over baseline: ENERGY STAR, energy code • Whole building programs for existing buildings gaining traction – – – – NYSERDA – Austin Energy (launching Whole Building Retrofit option fall 2013) Efficiency Maine – MD Department of Commerce & Focus on Energy (WI) Economic Opportunity (Whole California utilities - PG&E, SCE, Building focus to achieve 15% savings, SCG, SDG&E, SMUD unclear if this is a mandated target) – Mid-American Energy (Iowa) – Energy Trust of Oregon (Affordable Housing only)
  15. 15. National Multifamily Program Survey Trends • New multifamily-specific programs launched • Predominantly single measure rebates • Direct install common • Few require minimum savings levels • Whole-building gaining traction
  16. 16. Program Barriers to Deep Energy Savings
  17. 17. Barriers to Deep Savings Program Silos • Limit funding to serve either in-unit or common area (rarely both) • Deter property owners from engaging in more than one program – Time and hassle to owners – Differing requirements (applications, tools, building simulation, etc.) Market Confusion • Multiple programs compete for the same customer • Owner or their agent forced to navigate through offerings Cost Effectiveness Requirements • Measure level or package level that may make no sense – • TRC test not designed to be used at the measure level Prohibit from investments in measures needed
  18. 18. Barriers to Deep Savings Split Incentive • Owner invests, tenant benefits - 90% individually metered Lack of Available Data • Billing data informs investment decisions Lack of Confidence in Estimated Savings Dwindling Cost Effectiveness • • New construction: evolving codes, fewer cost-effective options Retrofit: diminishing returns – baseline code vs. existing conditions Changing Programs or Short Program Cycles • • Do not align with capital planning and construction timeframes Trade allies concerns about changing programs
  19. 19. Framework for Deeper Energy Savings
  20. 20. Framework for Deeper Savings Offer a Full Service, Customer-Solution Oriented Program Integrated, full suite of solutions via single entry point – Weatherization, direct install, prescriptive, customer, whole-building, renewables, benchmarking, operations and maintenance, tenant behavior – Consumers Energy (MI) Multifamily Energy Solutions • Direct install, prescriptive, custom, and whole-building options • Single entry point: energy advisor – San Diego Gas and Electric (SDG&E®) • Single entry point for prescriptive and whole-building • Coordination with low-income, direct install program – Puget Sound Energy Comprehensive Multifamily Retrofit Program – Mass Save Multifamily Buildings Programs
  21. 21. Framework for Deeper Savings Offer a Progressive Incentive Structure – Escalating incentives commensurate with savings/ investment • Owner, builder, partner, rater, energy consultant, trade ally – Multi-measure bonuses – Incentives for achieving actual savings targets – NYSERDA Multifamily Performance Program • Baseline incentive for 15% savings • Tiered performance payments in relation to savings • Incentive for achieving actual proven savings – PG&E California Multifamily New Homes Program • Escalating incentives from 15% ($/unit energy savings) • Energy consultant incentives ($50/unit),HERS ($60/unit)
  22. 22. Framework for Deeper Savings Offer Bundling or Multi-Measure Options • Hybrid whole building and prescriptive – Provide upfront transparency of measures, savings, incentives – Enable deep savings through streamlined property assessment – Encourage prescriptive projects to deeper savings
  23. 23. Strategies / Framework for Continuous Engagement
  24. 24. Why Continuous Engagement? The average business spends six times more to attract new customers than it does to keep old ones Efficiency Program Managers / team tend to be focused on winning new customers. Why? Because if cost effective work is already done we move on. • Why should we be focused on existing customers? • What products can we sell to our current customers? • What are some examples? Now? Future? • How do we sell to our existing customers? • What is the sales process? message? infrastructure?
  25. 25. Framework for Continuous Engagement What products are offered after project completion? 1. More of the same - Multifamily buildings owners and property management firms tend to own / manage multiple buildings 2. Operations and maintenance training 3. Performance Incentives for increased savings 4. Behavioral programs / technology 5. New emerging technology
  26. 26. Strategies for Continuous Engagement Selling the same program to existing customers – NYSERDA Multifamily Programs (NY) • Aggressive campaign to sell to owners / managers of portfolios • Using a key accounts strategy • “Key account reps” have CRM with detailed customer data “Mr. Jones, we are seeing that your property at 123 Main Street is saving $145,000 per year. Are there any other properties…” • Employing a typing tool to tailor messaging – SCE Multifamily Audit Program – Energy Upgrade CA • Aggressive campaign to owners / managers of portfolios • Initial triage of portfolio – rank and prioritize • Direct properties to best program fit– from direct install to prescriptive to whole building
  27. 27. Framework for Continuous Engagement Offer Operations and Maintenance Training • Offer training or certification incentive – Bay Area Regional Energy Network (CA) • Offers BPI MFEEBO training, which counts toward Green Business Program • Provides $5,000 incentive to earn Green Business Program Property Management Certification, which counts toward green building programs – Pepco Operations and Maintenance Training Incentive (MD) • Provides incentive for completion/certification of approved building training courses • Covers up to 80 percent of tuition costs, at a maximum of $1,000/course
  28. 28. Strategies for Continuous Engagement Benchmarking and Performance Incentives • Promote benchmarking as critical component of energy efficiency investing • Prioritize investments, identify problems, track post investment usage – Focus on Energy Multifamily Energy Savings Program (WI) • Savings over 12 month period greater than projected – $100 per additional peak kW energy saved – Efficiency Maine’s Multifamily Efficiency Program (ME) • Free benchmarking for 5-20 unit properties – Energy performance report, recommended upgrades, incentives – NYSERDA Multifamily Program (NY) • 12 month post retrofit performance incentives $150-$300 / unit – EPA ENERGY STAR® Multifamily High Rise (US) • Requires benchmarking for two years
  29. 29. Strategies for Continuous Engagement Offer Procurement Standards and Procedures • Influence all purchases • Provide procurement standards and protocols – SDG&E Energy Roadmaps • Local housing authorities: San Diego Housing Commission and County of San Diego Housing and Community Development – Adopt procurement policy requiring all energy-related purchases meet or meet or exceed SDG&E energy specifications and EPA’s ENERGY STAR standards – Avoid purchases without first investigating utility standards, incentives, and programs
  30. 30. Strategies for Continuous Engagement Offer Tenant Education and Behavior Programs • Apply concept of “people use energy, buildings don’t” • Suppliment existing programs – Energy Trust of Oregon’s MPower Oregon – On-going tenant engagement and education programs – Support for implementing operations and maintenance best practices – County of San Diego Energy Upgrade CA Multifamily • Tenant educational newsletter with call to action • Interactive lobby display featuring behavior strategies to reduce lighting, plug load, and water use
  31. 31. Framework for Continuous Engagement
  32. 32. Lead Nurturing Process
  33. 33. Emerging Building Technologies Future Opportunities for Engagement
  34. 34. Emerging Building Technologies
  35. 35. Emerging Building Technologies Technology Solutions for Improved Operations and Benchmarking • Building Automation Systems (BAS) – Centralizes remote monitoring and control of all building facilities • Ex: Siemens Facility To Go, Use Mobile App, AT&T Digital Life • Real Time Data Collection – IBIS®, Lucid Building Dashboard, US Energy Group Building Energy Management System USE Mobile® App
  36. 36. Lucid Building Dashboard
  37. 37. Emerging Building Technologies Technology Solutions for Increased Tenant and Owner Participation • Education and Awareness – CloudApps, Tripos • Social and Community Networking – Lucid Competition App, Opower, Facebook? Lucid Building Competition App
  38. 38. Opower App
  39. 39. Where to Next?
  40. 40. Where to Next? • Reconsider one-size-fits-all program – Full service programs • Breakdown silos and restructure programs to offer full suite of customer-focused solutions – Single entry, many solutions – Eliminate customer confusion and competing programs • Design incentive structure to drive deeper investments • Identify key trigger points and when to influence investments • Implement emerging technologies to achieve continuous engagement
  41. 41. Where to Next? • Look beyond construction / installation – Operations and maintenance • Shift from being reactive to proactive – Encourage benchmarking • Increase visibility of energy data to tenants – Provide procurement standards and protocols – Leverage property manager / tenant communication channels for behavior and education
  42. 42. Thank you! Julieann Summerford Mark Lorentzen TRC Energy Services 916-962-7001 a
  43. 43. Save The Dates For more information -