Urban Sustainability Assessment Project
Community Energy Efficiency Initiatives –
Logic Model
The Urban Sustainability Assessment Project (USAP) will review a variety of Local Governments'
energy efficiency retrofit programs for residential buildings1. This research will develop insights into
what elements of these programs result in the greatest uptake of energy efficiency retrofits, and
thereby engender the greatest social and ecological benefits. The USAP will thereby allow local
governments to learn from each others programs.
To help local government personnel better contextualize others' programs and performance, this
research uses a 'logic model' to hypothesize various factors impacting programs' performance. Hatry
(2006) develops a basic logic model of public policy programs based on four components:
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Inputs – The political, financial, and intellectual resources needed to develop and sustain a
program.
Processes/Program Elements – The mechanics of how a program works.
Outputs – The program's products and services.
Outcomes – The results upon the ultimate social or ecological system the program is intended
to influence.
I hypothesize a variety of Inputs and Processes that make for successful energy efficiency programs,
based on a preliminary review of literature and existing energy efficiency programs. As I research the
performance local governments' energy efficiency programs and interview program staff, I will adjust
our understanding of the import of these components. My interview questions are crafted to garner
input of the relative impact of each hypothesized input and program element. I hope to identify high
priority program components.
Barriers to Energy Efficiency Retrofits
Energy policy analysts have long recognized that private sector actors apparently do not invest in
energy efficiency at financially optimal levels. McKinsey (2009) conclude that approximately 30% of
commercial and residential energy use in the United States could be reduced through investments
with a positive net-present value. Before investigating the components of Local Government's energy
efficiency retrofit programs, it is important to understand what factors hinder the private sector from
adopting energy efficiency. A variety of authors recognize the following potential barriers (Fuller et al
2009; Home Performance Resource Center 2010)
Lack of understanding
Suboptimal uptake of energy efficient building technologies may stem from the public's lack of
understanding regarding their potential for energy savings. Recent research by Attari et al (2010)
1
Time and resources permitting, we may also investigate programs aimed at commercial buildings.
found that members of the public underestimate the use energy use and potential savings of common
energy services by a factor of 2.8, with even greater misunderstanding for high energy consuming
behavior. Homeowners may not understand their potential financial gains and positive environmental
impacts from home renovations.
Risk of home improvements
Investing in home energy efficiency entails a degree of risk that savings will not materialize. Audits can
suggest inappropriate technical solutions, construction costs may escalate above projected prices, or
installations may be performed poorly. Concerns about such risks may dissuade homeowners from
investing in energy efficiency.
Split incentives
Owners pay for capital improvements while renters typically pay utilities. This split-incentive reduces
the likelihood that owners will invest in energy efficiency in rental properties. Likewise, developers
have little fiscal incentive to develop efficient buildings in new construction, or major renovations.
Insufficient financing
Owners may have insufficient access to capital to undertake energy retrofits. Comprehensive home
energy retrofits can easily cost tens of thousands of dollars. Lack of access to capital and aversion to
risk in investing such amounts hinders adoption of retrofits. Moreover, homeowners may not invest in
energy efficiency with their own money out of concerns that should they move the added value of
energy savings will not be accounted for by assessors and buyers.
Transaction costs
Undertaking energy efficiency retrofits takes time, money, and mental resources. Moreover,
participation in retrofit programs can add to costs through paperwork and adherence to retrofit
procedures. These transaction costs can dissuade home owners from undertaking retrofits.
Aesthetic, environmental or health concerns
Aesthetic, environmental, health concerns may impede demand for energy efficiency retrofits from
some customers. Many heritage advocates oppose replacing or refurbishing single pane windows due
to the heritage value of older windows, concerns over the longevity of vinyl windows, and embedded
energy considerations (Vancouver Heritage Foundation 2009). In fact, the embedded energy content
of some insulation products and other materials makes the case for some (but certainly not all)
retrofit strategies environmentally dubious. Additionally, the perceived health impacts of fluorescent
lighting or more air-tight homes may impede adoption of energy efficient strategies in homes.
Workforce Supply and Skill-Levels
As demand for energy efficiency services increases, educational institutes are already
experiencing more demand for efficiency related programs than they can immediately accommodate
(Goldman et al 2010). Increasing supply shortages may result in increased prices for retrofit services,
and less experienced service people and hastier implementation resulting in suboptimal energy
efficiency performance.
Inputs – Project Initiation, Sustenance & Scope
During interviews and review of documentation, we will investigate the impact of the following inputs
in determining whether a local government establishes an energy efficiency program, the strength of
the program, and the extent to which government expands and sustains the program:
Political will
History of action on energy efficiency. Will impact the extent of new programs, internal capacity &
expertise.
Program funding; Financial resources
Programs that are subsidized can serve a wider market and reach more high need customers (Fuller
2009).
Collaboration
Internal Champion
Processes/Program Elements
We hypothesize that a variety of mutually reinforcing elements make for successful energy efficiency
programs. I list these elements below, along with more detailed hypotheses of how they can influence
the adoption of energy efficiency. Some of these elements may be more important than others; their
relative import may depend on context. I further hypothesize that Local Governments need not
undertaken all program elements – doing so in many instances would replicate existing utility and
state program, wasting resources and increasing customer confusion. This hypothesis suggests that
Local Governments that strategically frame their energy efficiency activities to complement any
existing State and utility programs will achieve the greatest uptake and adoption rates, all else being
equal. A wide range of State and utility programs exist, of varying degrees of efficacy. Cities will be
limited in some sense by the extent of complementary State and Utility efficiency programs.
Program Design
Program Design will determine all other program elements below. Program design may be ongoing
and iterative. Effective programs may begin from the principle of market segmentation, identifying
appropriate strategies based on:
tenure (rental, owner-occupied)
income
building types (single family/multi-family; age, construction type and other factors)
applicable regulations (are owners required to undertake some retrofit activity?).
Public outreach and mobilization
Successful programs will focus on using existing trusted community groups and avenues of
communication; engage in a variety of forms of interaction to promote retrofits, especially one-onone interpersonal communication and community social events that lead directly into energy efficient
activities.
Energy Audit Procedures
Successful programs will include an energy audit to identify a comprehensive suite of retrofit options
to maximize cost-effective efficiency options. Audit procedures may also involve immediately
implementing a suite of easier home energy retrofits, such as changing lighting and weatherstripping.
Retrofits are often followed by a second audit to verify installation and workmanship, and to disburse
incentives.
Customer Assistance
Many building energy efficiency programs focus on providing participating customers with:
assistance in completing paperwork associated with incentives, financing or contracting
Simple, standard contracts to ease participants engagement in programs.
Such assistance may reduce transaction cost barriers.
Auditor & Contractor Network
Both energy efficiency audits and home upgrades rely on knowledgeable contractors. The success of
programs may depend on:
The availability and cost of contractors.
Contractor's skill and training in selling building owners on the value of energy efficiency upgrades.
Contractor's incentive to promote retrofits. Is the contractor involved only in providing audits, or the
actual delivery of retrofits?
Private sector versus public sector provision of contractors.
Does the energy efficiency program provide a list of recommended contractors or certified contractors?
How does this influence building owners' choices?
Incentives & Other Customer Benefits
Many States, utilities and local governments offer financial incentives for retrofits.
To what extent does the magnitude of incentives impact adoption?
How does the ephemeral nature of some incentives impact adoption? Does incentives' ephemeral
nature impede adoption because of uncertainty, or can it engender a rush to take advantage of their
availability?
Additional benefits may include low-interest financing options (below), guarantees of savings or
workmanship, and other offers making the program more attractive to customers (Fuller 2009).
Financing
Providing financing for energy efficiency is an important element of many programs. Fuller (2009)
notes two elements of energy efficiency program financing schemes that can influence greater uptake
of incentives:
Tying financing to the property or the meter, not the current homeowner. Strategies include:
Tariffed Installation Programs (TIPs). Debt repayments are associated with the meter at a property.
Property Assessed Clean Energy (PACE) Financing – Municipalities finance energy efficiency, typically
through bonds. The loan is repaid through an assessed fee on the property, as line item on the
property tax bill.
Targeting those most in need. Frequently, those with low income or poor credit are excluded from
energy efficiency financing programs. These are precisely the demographics most in need of financing;
other demographics typically will have access to capital at comparable costs to what Local
Government programs can provide (Fuller 2009).
Ongoing Engagement
Successful energy retrofit programs may continue relationships with customers to encourage regular
maintenance of energy systems (changing filters on furnace, etc) and to encourage other energy
efficient behavior.
Regulation
Regulating energy efficiency retrofits can increase the rate of energy efficiency retrofits. For example,
San Francisco's Energy Conservation Ordinance requires energy retrofits at time-of-sale. Similar
ordinances could be instituted when a new lease is signed2. Some regulation may grow markets for
energy efficiency services, reducing barriers to voluntary retrofits.
Outputs and Outcomes
Energy efficiency engenders a range of social and environmental benefits. The USAP will quantify and
qualify Cities' community energy efficiency initiatives based on the following criteria:
Total estimated energy savings stemming from program activities per Cities' population
The participation rate – the number of households/buildings undergoing retrofits
The comprehensiveness of retrofits – Do retrofits follow a 'whole building' approach and incorporate
longer-payback components such as increased insulation?
Job creation – Number of energy efficiency contractors trained, employed etc. Qualitative aspects
2
Any one doing this? Care required to avoid costing out low-income.
such as the demographic focus of job creation initiatives will be considered.
Participation rates amongst low income households – America's 40 million households with income
below 200% of the poverty level use energy more intensively than average American households (68
kBTU/sf versus a national average of 56 kBTU/sf), and will spend about $1700 on energy in 2010
(Energy Programs Consortium 2009). Many energy efficiency initiatives have trouble reaching lowincome households because of split-incentives, lack of access to financing, and difficulty mobilizing
these demographics.
Cities' program investment levels in terms of staff time and budget.
Works Cited
Fuller, Merrian. 2009. Enabling Investments in Energy Efficiency: A study of energy efficiency programs
that reduce first-cost barriers in the residential sector. Eenrgy and Resources Group. UC Berkeley.
Prepared for: California Institute for Energy and Environment and Efficiency Vermont
Goldman, Charles, Jane S. Peters, Nathaniel Albers, Elizabeth Stuart and Merrian C. Fuller. March 2010.
Energy Efficiency Services Sector: Workforce Education and Training Needs. Lawrence Berkeley
National Laboratory.
Hatry, Harry P. 2006. Performance Measurement: Getting Results, Second Edition. Washington, DC:
Urban Institute.