Xcel and Centerpoint have jointly created and launched a new joint multifamily energy efficiency program just this past October. As of Mid-February, 30 qualified buildings have inquired about the program which is about 1 % of Minneapolis’ 5-family plus residential units. At the February 16th EVAC meeting, a spokesperson for Centerpoint said they will only do an engaged promotion of the program once the current cue empties out. Judging by those words the program must be in a beginning test run phase at this point. The program may not have had an extensive or equitable of a reach thus far. But the mere availability of a multifamily energy efficiency program is a historically significant step because residents of Multifamily residential housing have historically been ignored or at least under-served by traditional energy efficiency programs.
Here is the reason for the mismatch: The programs and rebates utilities have traditionally offered are designed primarily to help customers overcome up-front cost financial barriers to doing energy efficiency upgrades. However, the main barriers to doing energy efficiency upgrades in the multifamily residential sector are social in nature rather than purely financial. By this very definition, Xcel and Centerpoint will have to do engaged promotion of their multifamily energy efficiency program in a way which matched this reality.
Here is a place to start when explaining what exactly the social barriers are. Individual residents of multifamily buildings typically lack control over energy decision making in their buildings, while energy efficiency upgrades have to be implemented at the whole building scale in order to be effective. That dilemma often gets reinforced by the split incentive social related barrier that happens to be common among rental housing in general.
THE SPLIT INCENTIVE CREATES A BARRIER WITH RENTAL HOUSING IN GENERAL
With rental housing in general, whether multi-family or single-family, the chief barrier to energy efficiency upgrades is a split incentive. It occurs when the tenant is responsible for paying the energy utility bills while the property owner has the authority to make energy efficiency improvements but has little incentive to invest in them. The very real savings from an energy-efficient retrofit do not immediately accrue to a property owner if they are not on the hook for paying the energy utility bill. Even if renters had the authority to independently arrange expensive home energy efficiency capital improvements, tenants typically will not take residence for a long enough time horizon for their energy savings to offset the investment.
For much the same reasons as the split incentive, the benefits of energy efficiency are more likely to appeal to multifamily building residents more so than multifamily building owners. Even if a multifamily building owner is initially disinterested in Xcel & Centerpoint’s joint program, a particular resident who is interested could be a social catalyst to gain the support of multiple building-level stakeholders. In situations of systemic poverty & racial inequity, multifamily residents who are really impassioned for energy efficiency face a difficult power dynamic when they recruit both neighbors and building owners. That is why these impassioned residents could really benefit from the individualized outreach and support from a larger institution or community engagement program.
SOCIAL BARRIERS NOT LIMITED TO RENTERS
Even for multifamily residents who actually do own their units, they often do not have full control over their energy consumption particularly when multiple units share a single heating system. An interested resident would have to do a lot of determined convincing and coordination to get whole-building energy improvements in a situation where decision making and building control are so distributed.
Given what was just described, utility bureaucracies can no longer take the easy way out and act as if all barriers to customer participation in energy efficiency can be overcome by making the monetary reward big enough. Having a successful multi-family energy efficiency program requires a whole new paradigm that involves community engagement with individualized outreach & support. It means taking after Green Mountain Power’s model of being “customer-obsessed” rather than only taking interest in people as meters to be read.
A big part of outreach and support is having a clear, non-confusing streamlined format for program participation. If participation in an energy efficiency program is a time-intensive process involving a maze of multiple initiatives that an individual has to sort through, then that could also be as much of a barrier as up-front cost for many people who are busy in their daily routine.