Search eceee proceedings

Breaking down the barriers to efficiency improvements in the rental housing market: a comparison of two utility approaches

Panel: Panel 1. The foundations of future energy policies: Initiating change and breaking walls

Authors:
Katherine Johnson, Johnson Consulting Group
Michael Volker, Midwest Energy
Wade Shimoda, Hawaii Electric Company
Dr. George Willoughby, Hawaii Electric Company

Abstract

The rental market is a difficult segment to target for residential energy efficiency improvements. This is primarily due to the split-incentive in which the landlord has little interest in paying for energy efficiency improvements because the tenant pays the utility bills. However, that is changing since several utilities have implemented on-the-bill financing programs, patterned after the Pay-As-You-Save Program© Model.

This paper compares the approaches used by Midwest Energy and Hawaiian Electric. Midwest Energy debuted its How$mart SM Program in 2007 to provide renters and landlords a mechanism to pay for a variety of energy efficiency improvements. Hawaii Electric developed the SolarSaver Pilot Program in 2007 to encourage installations of solar water heaters.

In both programs, the utility provides the upfront capital as a way to encourage the investment in these energy efficiency improvements. Other program features include:

  • No upfront capital required by customer;
  • Efficiency improvements are paid for through a surcharge on the utility bill;
  • The surcharge is tied to the location, not to the individual customer;

This paper compares the results from both programs based on their first-year program evaluations, and includes the following key metrics:

  • Number of residences reached
  • Value of home improvements
  • Estimated energy savings
  • Strategies for targeting home improvement contractors
  • Lessons Learned

On-the-bill financing can be a successful program strategy to reach the underserved rental market.

Paper

Download this paper as pdf: Paper

Presentation

Download this presentation as pdf: Presentation