Cambridge Multifamily
Energy Program
Terms of Reference
MIT Energy Efficiency Strategy Project
Harvey Michaels, Ryan Cook, Alexis Howland, Adi Nochur & Brendan McEwen
Executive Summary
During the practicum 11.S948 Community Energy Innovations, MIT students will engage in the
conceptual development of a multifamily energy upgrade program in Cambridge, focused on achieving
broad adoption of deep energy retrofits installing energy efficiency measures and renewable energy in
multifamily housing of approximately 2-20 units. This Terms of Reference document prepared by the
Energy Efficiency Strategy Project’s (EESP) research team provides background information to support
the design of the program. The document suggests some further research opportunities and potential
program design ideas, which the Practicum participants can consider and expand upon.
Achieving high levels of energy upgrades in multifamily programs has proven challenging in most
jurisdictions. A variety of barriers hinder the uptake of energy efficiency and renewable energy,
including: Split-incentives between landlords and tenants; the lack of technical capacity amongst
owners; the lack of access to capital; a lack of transparency around energy costs for prospective renters
and buyers; and other barriers.
These barriers particularly affect efficiency implementation in Cambridge’s housing market. Rental units
dominate Cambridge’s housing, with frequent turnover in units. Small-to-medium rental properties tend
to be owned by individuals with small property portfolios. The transitory nature of renters and the
decentralized ownership of properties will make a coordinated efficiency effort challenging. Additionally,
27 percent of housing units in Cambridge are condominiums. The institutional barriers to implement
energy upgrades in these homes are separate from that of rental housing, but achieving condominium
agreement to undertake comprehensive upgrades is nonetheless imposing. This makes establishing a
consolidated energy efficiency program that is able to serve all of Cambridge’s multifamily market
challenging.
A variety of utility and non-profit energy efficiency programs are available to multifamily buildings in
Cambridge. Utility program administrators offer the MassSave suite of programs. MassSave involves a
common branding and basic program structure. In Cambridge, the utility NStar, which provides both
electricity and natural gas services in the city, administers MassSave programs; different lead vendors
manage the program, which contractors serve it. Some non-profits offer efficiency programs as well.
Programs available to different multifamily housing types include:
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The MassSave Home Energy Services for market-rate properties with 1-4 units.
Low-Income Weatherization Assistance Program for low-income 1-4 unit homes. The
Massachusetts Department of Housing and Community Development administers the WAP
programs, while different weatherization service contractors administer it.
MassSave Multifamily Retrofit Programs for market-rate properties with 5+ units. A variety of
multifamily programs are available (weatherization, central HVAC systems, fuel switching, etc.),
with the Multifamily Market Integrator service referring buildings to a variety of programs.
The Low Income Multi-Family (LEAN) Program for buildings where >50% units are occupied
by households with <60% area median income, and which have 5+ units. The LEAN program is
administered by MassSave, but was initiated by a multistakeholder group convened by non-profit
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housing developers. The energy firm New Ecology provides efficiency project management
services for participating buildings.
Massachusetts Green Retrofit Initiative – A non-profit partnership between New Ecology and
the Local Initiatives Support Corporation (LISC). The GRI program is funded by a US
Department of Housing and Urban Development grant.
It provides ‘turn-key’ project
management for owners of lower-income housing to participate in upgrades. The program is
offered to buildings where >50% units are occupied by households with <80% area median
income.
A range of actors market these programs, including contractors, community organizations, and the City
of Cambridge’s Cambridge Energy Alliance. Community outreach and marketing staff note the need to
receive feedback from program vendors regarding what marketing techniques are leading buildings to
enter programs. Likewise, a variety of financing mechanisms are available to building owners, or unit
owners in condominiums, to finance upgrades, some with attractive financing. However, none of these
financing mechanisms currently can overcome the split-incentive whereby owners pay for upgrades and
tenants realize energy savings.
Initiatives to facilitate energy data transparency are also evolving at the city, utility, and national scale.
Notably, the City of Cambridge is considering an energy disclosure policy; it would require commercial
buildings above 50,000 SF to benchmark and disclose their buildings’ energy consumption publicly.
Federal recognition of the importance of energy data galvanized the creation of the Green Button
Initiative, an industry-led effort to improve availability of energy data. To date, 20 utilities have
committed to the Green Button Initiative, including NStar. Different firms, government agencies, and
non-profit actors have developed a range of software applications to rank buildings according to their
energy performance, as well as those that use data about building assets to remotely assess buildings’
energy efficiency potential. These initiatives present an opportunity to publicly disclose information
about buildings’ (and their units’) energy costs, and their potential to be upgraded.
Given this context, the researchers of the Energy Efficiency Strategy Project have identified some
opportunities for improving the function of efficiency markets, which the Community Energy Innovations
practicum could consider. These include:
Program design - The MassSave Homes program for 1-4 unit buildings is currently operating well. In
contrast, interviewees noted challenges in the MassSave >5 unit market-rate multifamily programs.
Priorities for improving programs for >5 unit building include: Better communicate with community and
city outreach partners; provide greater project management and “hand-holding” assistance to owners
and property managers; provide comprehensive upgrade services, as opposed to disaggregating
upgrades into different contractors; and integrating healthy home improvements to the greatest extent
possible. Such efforts could be achieved by tweaking the existing MassSave structure, or piloting a new
program architecture allowing multiple lead contractors. Regardless of the program structure, an
‘owners agent’ (similar to the MA Green Retrofit Initiative) could be sponsored in some fashion for
projects that wish to use their services.
On-bill tariff energy upgrade financing - An on-bill tariff repayment mechanism can facilitate the
financing of energy efficiency in multifamily housing, and other building types. On-bill tariffs overcome
the split incentive barrier, by associating repayments for upgrade work with the utility bill to which energy
savings accrue. The practicum could assess the potential to establish an on-bill financing mechanism,
including identifying: A fund management structure; capital sources; potential underwriting criteria; what
billing systems NStar must adopt to implement on-bill tariff financing; and the regulatory policy to enable
on-bill mechanisms. The practicum could test such concepts with NStar, lenders, owners, tenants, and
other stakeholders.
Transparency – The City of Cambridge (or another stakeholder) could publish an Energy Map to
benchmark and disclose energy use, and convey information about buildings’ efficiency potential. The
map would illuminate differences in energy use among multifamily buildings, allowing prospective
tenants and owners will be able to make more informed decisions about which apartments they choose
to rent, and increasing pressure on owners to undertake upgrades. The map could also facilitate
community based marketing, including neighborhood and building energy efficiency competition.
Energy data for the map could be crowd-sourced, leveraging the Green Button Initiative; or, it could be
provided by NStar on a semi-regular basis, with an agreement that sensitive data not be revealed. An
efficiency potential score could be developed using remote assessment techniques, using building
characteristic information available in city assessor databases, owner reporting, or other sources. The
practicum can develop a prototype of this mapping application.
Recruitment – Engaging stakeholders like owners, property managers and tenants is essential to
developing a strong program design and marketing plan. This practicum can investigate communitybased methods to drive participation in energy programs, testing concepts and strategies with these
stakeholders. Practicum tasks include: a “Stakeholder Analysis” to identify key informants to program
design and marketing strategies; the design of “Community-Based Social Marketing” strategies,
including conducting focus groups with key stakeholders to test and modify these designs.
Mandates – Ultimately, widespread uptake of energy efficiency in multifamily buildings may require
regulatory mandates. The City could consider an Energy Conservation Ordinance; however, the
mechanism for them to adopt and enforce such an ordinance is unclear. The Green Communities
Division of the Massachusetts Department of Energy and Environmental Affairs is well positioned to
develop a model energy upgrade mandate for existing buildings, which could comprise part of building
codes. The practicum could explore the structure of such an upgrade mandate, and what “winning
political coalition” could advocate for its development.
Developing such strategies can provide a program design concept for NStar, the City of Cambridge, and
other partners, which would represent one of the most innovative efficiency programs in the country. It
is important that the practicum consider how these solutions could be scaled to other regions as well.
The following pages include background information on the issues noted above, and expand on the
opportunities identified by the Energy Efficiency Strategy Project.
1. Introduction
During the practicum 11.S948 Community Energy Innovations, MIT students will engage in the
conceptual development of a multifamily energy upgrade program in Cambridge, focused on achieving
broad adoption of deep energy retrofits in multifamily housing of approximately 2-20 units. The program
concept will be provided for the consideration of the City of Cambridge’s and the local energy utility
NStar. We aim to develop a viable, transformational model that can realize deep energy savings and
climate change pollution reduction in Cambridge; moreover, the program will ideally be scalable to
broader geographic regions.
This Terms of Reference document prepared by the Energy Efficiency Strategy Project’s (EESP)
research team provides background information to support the design of the program. The document
suggests some further research opportunities and potential program design ideas, which the
Practicum participants can consider and expand upon. This document is not meant to dictate the
content of the Practicum. Rather, it presents a summary of the EESP’s research and thinking during
Fall 2012.
The Challenge of Achieving Efficiency in Multifamily Housing
A variety of opportunities to cost-effectively reduce energy use and integrate renewable energy systems
exist in multifamily housing. A recent analysis for the USA estimates that 15 percent of multifamily
electricity demand, and 24 percent of multifamily natural gas demand, can be cost-effectively met by
energy efficiency by the year 2030.1 Indeed, multifamily housing tends to be more energy intensive than
single-family.
However, achieving significant uptake of energy efficiency in multifamily housing has proven difficult. A
literature review and conversations with multifamily housing market participants during Fall 2012
suggest the following key barriers to achieving energy upgrades in multifamily housing:
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Split-incentives - Many tenants pay utility bills, while landlords are typically expected to pay
improvement costs. Conversely, in cases where landlords pay some of the energy bill (such as
heating), tenants have little incentive to conserve. Indeed, landlords are hesitant to improve
properties, even when costs are low - Landlords and tenants often have a strained relationship,
with tenants desiring property improvements. Some property developers noted that any effort to
improve properties may be viewed with caution by landlords, regardless of whether it costs them
money, as they fear tenants will demand further improvements.
Owners lack capacity - Building owners, especially smaller property owners, often have
minimal understanding of the energy efficiency potential of their property, and the construction
processes necessary to achieve upgrades. They are often wary of committing to manage
construction projects.
The Cadmus Group. May 2012. Massachusetts Multifamily Market Characterization and Potential Study.
Volume 1. Final Report.
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Owners require project financing – Few owners have cash on hand that they can spend to
achieve energy savings with greater than a few years simple payback (building owners have high
“hurdle rates”). Comprehensive building upgrades may cost thousands of dollars per unit.
Disaggregated owners - While data on ownership is incomplete, interviews with individuals
experienced with the market indicate that a large number of rental properties in Cambridge are
owned by small-scale property owners. Thus, programs must reach and sway many decisionmakers, rather than a few individuals responsible for large portfolios.
Lack of transparency around energy costs - Most tenants do not have a good understanding
of the energy costs and environmental impacts of the their rented units.
Difficulties of financing and managing the upgrade process with condominiums Condominium associations may face barriers to credit, and be difficult to coordinate to implement
comprehensive building upgrades.
A lack of incentives for building managers and operators to achieve efficiency - Building
management companies and building operators have limited incentives to facilitate upgrade
projects. Upgrade projects may entail additional work on their end, and they are rarely
compensated for achieving energy or water savings.
Technical challenges - While cost-effective energy efficiency options exist in multifamily
buildings, they are often pricier than the low-cost efficiency that can be achieved in larger
commercial buildings. Deep energy upgrade measures require specialized design skills in many
instances. Systems found in many older Cambridge multifamily buildings, such as ‘single pipe’
hydronic heating systems and cavity-less masonry wall construction, can be difficult to make
efficient, necessitating higher cost upgrades and technological innovation. Lastly, upgrades
should be performed in a manner that does not compromise indoor health (indeed, which will
improve health), nor reduce the longevity of the building; such strictures require skilled
contractors and designers.
Intrusive construction - Building owners are hesitant to disturb occupants in their unit;
however, many upgrades necessitate work in occupants’ space. Programs must undertake this
work speedily, perform deeper upgrades during re-tenanting periods when spaces are not
occupied, and/or devise other means of minimizing interruptions for tenants.
Convoluted, fragmented energy efficiency programs - Programs offered to multifamily
buildings, particular market-rate buildings, are not holistic; they offer only a few upgrade
opportunities and do not entail “whole building” upgrades. Moreover, navigating these programs
can be cumbersome for building owners - owners are responsible for managing contractors and
sourcing financing for projects, tasks with which they may lack experience. Additionally, the
presence of various “pre-retrofit barriers” (hazards such as knob-and-tube wiring or asbestos)
can necessitate additional work which owners must coordinate; this extra work increases the
likelihood that a building owner or manager will drop out of efficiency programs.
Poorly delivered energy programs - Some industry observers noted that utility program
vendors do not always provide optimal service.
Hypothesized Elements of Better Energy Upgrade Programs
This practicum is predicated on the notion that a well designed and executed partnership between
utilities, local government, businesses, community organizations and other actors can overcome many
of these barriers, and drive deeper uptake of energy efficiency in multifamily buildings. Together, these
actors can serve to improve programs and transform markets for energy services. There is potential to:
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Use energy data to identify buildings needing upgrades, and to inspire owners and tenants to
take action based on comparisons with their peers and a richer understanding of their buildings’
cost-effective upgrade potential.
Engage stakeholders, to co-create energy efficiency program architecture, and provide more
effective program marketing.
Improve financing mechanisms, which can reduce split-incentives and barriers to capital, and
thereby enable the large investments required in the housing stock.
Maximize the value of engagement in a building, by providing opportunities for deep energy
improvements, addressing healthy homes issues, and implementing other environmental
improvements. Buildings may not necessarily have to undergo all upgrades simultaneously, but
programs could connect buildings with timely future improvements.
Improve building owners’ experience navigating programs, by providing a consistent point of
contact and improving the flow of information between contractors, utilities, and outreach actors.
By piloting and experimenting with these innovative approaches, Cambridge and NStar can develop
replicable models to improve the delivery of sustainable energy services in multifamily housing across
the state and the nation.
The Following section provides background on Cambridge’s multifamily housing market, energy
programs in Cambridge, and industry trends pertinent to program design. Subsequent sections explore
the EESP research team’s program design ideas.
2. Background
2.1 Characterizing the Cambridge Housing Stock
The prospects for a residential energy efficiency program depend in large part to the characteristics of
the local housing market, and Cambridge offers a unique market for several reasons. To develop a
strategy that will encourage local energy efficiency investments, it is crucial to understand the
dimensions of this market. Several aspects of the local housing market are examined below, including
the nature of home ownership, resident demographics, and physical characteristics of the home.
In addition to Cambridge as a whole, the practicum may target three distinct regions of the city: MidCambridge, Area IV, and Cambridgeport. We examined the specific nature of the housing market in
these areas, but they did not differ dramatically from Cambridge as a whole.
Home Ownership Rates
Cambridge’s housing stock is dominated by multifamily rental properties. In the city as a whole, only
35% of the population lives in owner-occupied housing.2 Unsurprisingly, rental housing appears to be a
more temporary living situation in Cambridge than home-ownership. Under 40% of renters have lived in
their current residence for more than 5 years, compared to three quarters of homeowners.
In addition to a strong rental presence, many of Cambridge’s residential units are condominiums. These
account for 27% of the city’s housing.3 Some condominium owners rent out their units, creating an
overlap in the rental and condominium sectors.
Resident Demographics
Cambridge deservedly has a reputation as a young, student-oriented city. 27% of its adult population is
currently enrolled in school either as an undergraduate or graduate student. This is reflected in the
rental market - 53% of the primary householders in rental units are under the age of 35. Additionally,
Cambridge’s rental market has a low rate of family residence. While families make up just over half of
owner-occupied housing, families rent only 33% of Cambridge’s rental properties.
Cambridge is also a predominantly White community. The head householder in 69% of Cambridge’s
residences and 63% of rental residences is Non-Hispanic White. Among minority groups, Black and
Asian communities each account for 13% of rental residences, and Hispanics an additional 8%.
As of 2009, over 3,000 housing units in Cambridge were designated as affordable units and subsidized,
accounting for 9.6% of the local rental market.4
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Unless otherwise noted, all statistics in this section are from the US Census Bureau 2010 Census and 2006-2010
American Community Survey.
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City of Cambridge Community Development Department, 2010 Housing Profile.
City of Summer Office of Strategic Planning and Community Development. Trends in Somerville: Housing
Technical Report. 2009
The vast majority (95%) of Cambridge’s rental households are located in multifamily housing. 33% of
rentals are in small buildings of with 2-4 units, and another 24% are in moderate-sized buildings of 5-19
units.
Physical Characteristics
The housing stock in Cambridge tends to be very old, though this is true more of owner-occupied
residences than rentals. 52% of rental units in Cambridge were built before 1940, compared to 72% of
owned units. Despite the general age of the units, there is a small but noticeably number of newer
properties, with around 17% of units among both rented and owned properties constructed since 1980.
The housing market throughout New England is unique for its reliance on fuel oil to provide space
heating. However, fuel oil is less prevalent in Cambridge, which boasts a well-developed utility natural
gas network. 60% of rental units are heated by natural gas, 21% by electricity (which includes both the
old technology of resistance heating and more efficient heat pump technology), and 13% by fuel oil.
Among owner-occupied homes, there is a slightly higher percentage of gas-heated homes, and a lower
electric heating presence.
Property and Energy Management Characteristics
There are a number of useful metrics related to property management trends and energy use in
Cambridge’s rental market for which data is non-existent or difficult to obtain. While the identity of
property owners is publicly available through tax assessment data, it is difficult to confirm how many
properties a given owner may own due to the nature of available data. It is also difficult to identify
landlords who live on-site in multi-family buildings. Additionally, no good source of data exists on the
number of small property owners who contract with independent property management firms to conduct
business with tenants. Finally, information on the number of apartments that are individually or master
metered is only available through NSTAR and is restricted for privacy concerns.
Therefore, much of this information must be collected qualitatively through interviews with those familiar
with the local housing market. Preliminary discussions have indicated a fragmented market where parttime property owners account for much of small-to-medium residential properties and a significant
portion of landlords live on-site. While some of these owners contract with property management firms,
most seem not to. Finally, most multi-family buildings in Cambridge are thought to be metered
individually for both electricity and heat; however, many units, especially in larger or oil-heated buildings,
have heat provided central with tenants typically responsible for electricity bills.5 In this case, landlords
have greater fiscal incentive to undertake upgrades that reduce heating costs.
Summary
The characteristics of Cambridge’s multifamily housing market pose serious barriers to an energy
efficiency program. Renters dominate the market, and the rental community is a social demographic in
transition with less incentive to encourage landlords to make upgrades, and less well-established
relationships with landlords. Small-to-medium rental properties tend to be owned by individuals with
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Personal communications with Peter Shapiro (Just-a-Start) and Meghan Shaw (Cambridge Energy Alliance).
small property portfolios. The transitory nature of renters and the decentralized ownership of properties
will make a coordinated efficiency effort challenging.
Additionally, a sizeable minority of housing units in Cambridge are condominiums. The institutional
barriers to implement energy upgrades in these homes are separate from that of rental housing, but also
imposing. This makes establishing a consolidated energy efficiency program that is able to serve all of
Cambridge’s multifamily market challenging.
Despite the difficulty of reaching this market, there is ample money to be saved and pollution mitigated
by upgrading buildings. Cambridge’s building stock is older, with less efficient energy systems. Also,
although natural gas accounts for the majority of space heating in the multifamily market, there is a
significant presence of less efficient oil heating. This indicates that there is much room for efficiency
improvements in Cambridge’s rental housing stock.
2.2 Energy Programs – Past and Present
A number of energy efficiency programs pertain to multifamily buildings in Cambridge. These programs
are described below, and also summarized in an Appendix. Many of these programs are part of
MassSave, the suite of energy efficiency programs administered by various Massachusetts utilities.
These programs provide incentives for energy upgrades, using funds from surcharges on utility
ratepayers’ bills. MassSave essentially serves as a common intake and basic structural framework for
all Massachusetts utility programs; however, individual utilities administer efficiency programs in their
own territories for their own customers, and each utility structures their program in somewhat different
ways. In Cambridge, both electricity and natural gas are provided by the utility NStar, and MassSave
programs are thus administered by NStar. NStar typically contracts with ‘lead vendors’ to implement
programs, who may subsequently subcontract or administer other contractors in these programs.
Additionally, some programs, such as the MA Green Retrofit Initiative (see below) are sponsored by
other entities, who help building owners navigate the MassSave program process.
MassSave Home Energy Services – Market-Rate Properties with 1-4 Units
The MassSave Home Energy Services program provides no-cost home energy assessments and
incentives for efficiency upgrades in market-rate properties with 1-4 units. The program is available for
whole buildings and/or individual units within these properties, and potential upgrades include insulation,
air sealing, and improved heating, cooling and hot water systems. Financial incentives include rebates
and an interest-free Residential HEAT loan (up to $25,000 with terms up to seven years) for qualified
energy efficiency improvements, as well as 75% off insulation upgrades up to $2,000.
Multiple contractors may participate in the program as Home Performance Contractors. The
entrepreneurial Next Step Living serves much of the market. They provide extensive engagement with
home owners, have innovated financing tools for a range of upgrade measures (solar, envelope, etc.),
manage contracting, and reportedly offer a good customer experience.
Low-Income Weatherization Assistance Program
The federal Weatherization Assistance Program (WAP) is funded by the U.S. Department of Energy to
provide energy assessments, air sealing and insulation upgrades in low-income 1-4 unit properties.
Households making less than 60 percent of state median income, receiving supplemental Social
Security income (SSI), or receiving Transitional Aid to Families with Dependent Children (TAFDC) are
eligible for WAP, and the average WAP grant allocation per household is around $5,500. In
Massachusetts WAP is administered by the state’s Department of Housing and Community
Development and implemented by weatherization service agencies across the state. Households that
qualify for WAP may also qualify for the other low-income programs described above.
MassSave Multifamily Retrofit Programs – Market-Rate Properties with 5+ Units
Utility program coordinators align their multifamily programs through the MassSave Multfamily Retrofit
initiative. Within this framework, NStar offers multiple different programs for different types of efficiency
projects in the multifamily sector, including programs focused on unit-by-unit weatherization, central
HVAC retrofit programs for whole buildings, heating fuel switching, and other programs. Since 2010,
MassSave has introduced the Multifamily Market Integrator (MMI) service, which aims to provide a
single point of contact for building owners as they connect with efficiency programs. The MMI can then
suggest different assessments for upgrade opportunities based on customers’ needs. The MMI
coordinates between different utility program administrators, and within program administrators’
programs different programs. However, the MMI currently acts predominantly to recommend program
vendor contacts to building owners, leaving building owners to manage and coordinate upgrade
projects.
Similar to the Home Energy Services program, the MassSave Multifamily programs use utility funds to
provide no-cost home energy assessments, energy efficiency upgrades and related incentives in
market-rate properties with 5 or more units. Through the MassSave Financing Program property owners
can access interest-free loans up to $100,000 with terms up to seven years to install qualified energy
efficiency improvements.
Massachusetts Low Income Multi-Family (LEAN) Program – Affordable and Low-Income
Properties with 5+ Units
The Low Income Multi-Family program (also known as the LEAN program) is another utility-funded
program available for housing developments of five or more units that are owned by a Public Housing
Authority, a non-profit or a for-profit entity. An additional qualification for LEAN is that 50 percent of
development households must be at or below 60 percent of area median income. LEAN provides
building energy assessments and grants to cover energy efficiency upgrades including hot water and
heating systems, air sealing and insulation, lighting, appliances and ventilation. It provides more
comprehensive project management for building owners, helping them prioritize construction, access
financing, and measure buildings’ performance. LEAN was initiated in large part due to demand by nonprofit housing owners for an easier multifamily program to navigate; the Local Initiative Support
Corporation (LISC) and others’ convened building owners and utility representatives to design a more
holistic program for non-profit housing developers. LEAN is delivered by New Ecology.
Massachusetts Green Retrofit Initiative – Affordable and Low-Income Properties with 5+ Units
The Massachusetts Green Retrofit Initiative (GRI), a non-profit partnership between New Ecology and
the Local Initiatives Support Corporation (LISC). The GRI program is funded by a US Department of
Housing and Urban Development grant. It provides ‘turn-key’ project management for owners of lowerincome housing to participate in upgrades – these services include initial benchmarking of owners’
building portfolios; identification of promising retrofit projects; brokering financing for owners; managing
retrofit construction projects; and performing evaluation and verification of energy savings. The GRI
thus helps property owners navigate the various utility energy efficiency programs, coordinating with
utility PA vendors and contractors. It operates similar to LEAN, and has the same project management
firm, New Ecology. Unlike LEAN, however, the GRI is not a utility-sponsored program (although it
assists building owners access utility programs), and it has slightly different income eligibility criteria; 50
percent of development households must be at or below 80 percent of area median income for the GRI,
versus 60 percent of area median income for LEAN. New Ecology has noted that it would like to offer
the GRI services to market-rate multifamily housing over time, perhaps on a fee-for-service basis.
Energy Performance Improvement Program – Financing for Lower-Income Upgrades
State programs are available to support financing for energy efficiency upgrades in affordable multifamily properties. The Massachusetts Housing Partnership (MHP) has an Energy Performance
Improvement Program (EPIP) that provides loans of up to $15,000 per unit for a wide range of efficiency
improvements in multi-family buildings, including water conservation, air sealing and insulation and more
efficient heating, cooling, ventilation and hot water systems. The EPIP is intended to complement
energy assessment grant programs like LEAN and the Green Retrofit Initiative.
Healthy Homes Programs
It is important that any housing retrofit program not exacerbate home health issues, such lead exposure
and asthma, which affect some Cambridge residents; ideally, a program can ameliorate these issues. A
number of initiatives may be considered as the program is designed, to consider how healthy homes
issues can be better integrated into a multifamily program:
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The Green and Healthy Homes Initiative (GHHI) is a national project of the Coalition to Prevent
Childhood Lead poisoning. In Maryland, GHHI is piloting a program that integrates family
advocacy, resident education, lead and other health hazard mitigation services, and home
energy upgrades. GHHI offers a Compact of Core Standards that regions’ home improvement
programs are encourage to collaboratively adopt, to facilitate the development of more
streamlined program delivery. It also certifies cities in which home improvement agencies have
taken steps to align their delivery.
The EPA has developed Healthy Indoor Environment Protocols for Home Energy Upgrades. The
EPA also requires that home improvement contractors are properly certified in lead abatement.
A variety of home health improvement programs have operated in the Boston area over the
years. The Boston-based Asthma Regional Council of New England has resources on healthy
home upgrades, including their penetration, cost-benefit justification, and recommendations for
implementing programs.
2.3 Outreach & Marketing for Local Energy Programs
Community engagement around the energy efficiency programs described above takes place through a
variety of channels. The City of Cambridge’s Cambridge Energy Alliance (CEA) and the citizen-lead
HEET (Home Energy Efficiency Team) Cambridge promote the MassSave programs to city residents.
The CEA has found that the landlords who are most engaged about energy efficiency tend to live in the
relevant properties. Likewise, CEA notes the importance of a motivated tenant with a good relationship
with the landlord to recruiting buildings.
The utility program administrators collectively advertise MassSave. Additionally, individual program
vendors advertise their programs to building owners, property managers, and tenants. Different vendors
undertake different marketing strategies. Some have sought to form partnerships with non-profit and
community organizations, local businesses and municipal governments, to advertise programs on their
behalf. Notably, Next Step Living (the prominent contractor for MassSave Home Energy Service
program) is strong at engaging community based marketers to promote their program, who report that
Next Step Living provides valuable feedback on the success of their outreach campaigns and the status
of different recruited properties.
In contrast, NStar and its >5 unit market-rate multifamily program vendors reportedly do not
communicate with community outreach partners frequently enough to provide valuable feedback on
what outreach strategies work to recruit multifamily buildings, nor which building have initiative upgrade
projects. This has made community organization to promote participation in these projects difficult.
Outreach for affordable and low-income multifamily programs like LEAN and GRI, on the other hand,
tends to be channeled via more specialized networks of affordable housing property owners, community
development corporations, and non-profit and community organizations serving low-income populations.
Many of these actors were involved in the actual design of these programs and have demonstrated a
strong commitment to outreach and implementation around them as well.
2.4 Energy Data – The Opportunity to Leverage Big Data
Utilities, businesses, governments, and non-governmental actors are increasingly devising innovative
methods to acquire, analyze, and present data about energy use in buildings. The practicum will
explore ways to publicly disclose energy data, and inferred energy efficiency potential data, in
multifamily buildings. Such disclosure facilitates greater transparency in renters and buyers decisions of
their housing; can help pressure building owners to engage in upgrades; and can provide an engaging
means of educating the public about energy efficiency opportunities in buildings. The subsections below
outline background information and industry initiatives relating to energy data.
Types of Data
Building energy data can be classified into two broad categories:
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Energy data. Such data may include:
○ Monthly billing records for individual meters.
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Smart meter interval readings, which may provide a data record of energy used every five
minutes, 15 minutes, or hourly. Having energy use profiles using this data can allow
analysts to infer what equipment exists in properties (they can “read” energy load profiles
to infer the efficiency of equipment, and what equipment is in use). Thus, it can act as a
type of asset data (see below).
Asset data, referring to information about a building. Asset data may be derived from:
○ User inputs - from building operators, tenants, etc.
○ Local government tax assessor records, which may contain information on building age,
size, heating systems, wall assembly, etc.
○ Representations of buildings’ size and massing, such as LIDAR data.
○ Thermal images of buildings, from which thermal fluxes may be inferred.
○ Onsite building assessments.
Energy data can indicate the energy costs and pollution associated with living in an apartment. Asset
data can be used to indicate the energy efficiency and renewable energy potential of a building.
buildings can be benchmarked against one another, as well as evaluated for energy improvements.
These opportunities are expanded upon in the following sub-sections.
Benchmarking and Building Rating
Two fundamental types of building ratings have been developed to benchmark buildings’ energy
efficiency:
●
Operations ratings are based on the actual energy consumption data of buildings. Buildings
with similar uses and climates can be compared. EnergyStar Portfolio Manager is the prominent
operations rating nationally, used for commercial buildings and multi-unit building. Wego Wise is
a platform developed by New Ecology used in multifamily and single family buildings. The
energy use of a building is influenced by its constructions, systems operations and maintenance,
and occupant behavior. Thus, an operations rating reflects all three of these considerations.
●
Asset ratings assess the energy efficiency of buildings’ construction. Asset ratings may be
quite complex, such as Home Energy Score or ASHRAE compliant building energy model; these
models input details of a buildings construction and systems, and run energy simulations. Other
asset models are based on fewer inputs, which have particularly strong building energy use
prediction abilities. Asset ratings can inform potential building utility payers of how much energy
the building may use under normal occupancy, regardless of how it was operated conversely.
To give energy efficiency a greater role in the real estate market, home energy scorecards and labelling
systems are being given greater attention in the efficiency field, and the Energy Upgrade California
program found that energy efficiency certification can increase the resale value of a home. 6 One
6
http://www1.eere.energy.gov/buildings/betterbuildings/neighborhoods/stories_eu_california.html
example is the DOE Home Energy Score.7 Other programs offer more immediately visible recognition to
participants through the use of yard signs.8
Automated Building Assessments Driven by Engineering Models
Data and building energy modeling techniques are increasingly being used to rapidly assess potential
energy improvement opportunities based on relatively few data inputs. Such assessment strategies
include:
●
●
●
Sourcing building information from building owners, operators, or expedited onsite assessments.
Building operators or assessment professionals can implement relatively few pieces of asset
information. This data is then used to develop a model of the buildings energy use, informed by
prior detailed audit data.
Tax assessor records can indicate what buildings feature the highest energy efficiency potential,
based off of correlations with detailed audit data and assessor data.
Interval meter data can be subjected to algorithms that disaggregate energy consumption into
different end-use loads. A model of the buildings’ energy use may then be automatically
constructed based on these inferred loads, and upgrade scenarios tested in this model.
Such assessment tools are evolving rapidly. They promise to reduce the costs of auditing buildings’
energy efficiency potential, and to allow for identification of the most promising energy efficiency
opportunities across a portfolio of buildings.
The Appendix includes case studies of a range of building benchmarking and data-driven assessment
tools.
Energy Data Privacy and Disclosure
The US Department of Energy has convened stakeholders to articulate principles for smart meter
interval energy data. They found that most market participants believe consumers should have the right
to disclose energy use data to non-utility third-parties, and that this disclosure should be a streamlined,
simplified process. They felt data should not be disclosed unless consumers opted-in to the program,
meaning consumers initiate an action to participate in data disclosure. An opt-out program, where by
default consumer data is released unless they actively opt-out, would likely garner higher participation
rates and more data.
Utilities have the right to use data for their business activities, including efficiency program delivery.
Thus, utility vendors reportedly have access to all buildings energy usage data, though they do not
share this data. Typically residential (and commercial) energy consumption data has not been publicly
disclosed. Some opposition stems from privacy and safety concerns. For instance, residents worry that
7
http://www1.eere.energy.gov/buildings/residential/hes_index.html
8
http://www1.eere.energy.gov/buildings/betterbuildings/neighborhoods/innovations.html?tab=2&list=10&div=10#gro
uped
with real time data disclosure, thieves could identify when they are gone and break into their homes.
Commercial and industrial entities fear that their energy data could reveal they are significantly more or
less efficient than competitors, which may reveal they are using different technologies or business
strategies. Furthermore, clandestine marijuana grow operations and other participants in energy
intensive illicit activity also oppose public disclosure of data fearing that authorities would use the
information to target and arrest them.
However, the largest obstacle to data disclosure seems to be utility inertia and a general institutional
reluctance to take aggressive stances on data disclosure. But, new programs, such as the Green
Button Initiative are prompting utilities to be more open with data disclosure.
Green Button Initiative
Federal recognition of the importance of energy data galvanized the creation of the Green Button
Initiative, an industry-led effort to improve availability of energy data. Sparked by a challenge in
September 2011 from U.S. Chief Technology Officer Aneesh Chopra to give customers greater access
to their energy data, industry stakeholders worked together to officially launch the program in January
2012.9 This voluntary program encourages utilities to release personal energy data to customers in a
standard format as an XML file.10 To date, 20 utilities have committed to the Green Button Initiative.
This amounts to 36 million residential customers gaining digital access to their energy data (Innovation
Electricity Efficiency 2012).11
9
White House Office of Science and Technology Policy. "Administration Announces New Tools to Help
Consumers Manage Electricity Use and Shrink Bills." whitehouse.gov. January 18, 2012.
http://www.whitehouse.gov/administration/eop/ostp/pressroom/01182012 (accessed October 29, 2012).
10
EnerNex. Green Button Data. n.d. http://www.greenbuttondata.org (accessed October 29, 2012).
11
Innovation Electricity Efficiency. Green Button: One Year Later. Issue Brief, September, 2012.
3. Program Components
A variety of program components could be included in the ultimate design of this project. Promising
opportunities that the EESP team has identified are noted here.
3.1 Program Design – Administration and Management
Overview
The MassSave Homes program for 1-4 unit buildings is currently operating well. In contrast,
interviewees noted challenges in the MassSave >5 unit market-rate multifamily programs, including:


●
●
Programs provide insufficient “hand holding” and customer relationship development with
owners, who often lack technical capacity in upgrade decisions.
Programs are disaggregated into HVAC, Weatherization, Fuel Switching, and other programs,
making building owners less likely to undertake comprehensive upgrades.
Program
administrators have made efforts to address these concerns, introducing the Multifamily Market
Integrator (MMI) program in 2010 to serve as a “one stop shop” for multifamily buildings, and
refer them to a variety of programs. However, interviews with market participants suggest that
the MMI acts primarily to refer building owners to different programs; it does not adequately
serve to diagnose what services buildings require, nor assist with project management and
sourcing of financing for different scopes of work.
Only one lead vendor serves the multifamily programs. Some suggest that this lack of
competition reduces the incentive to deliver high quality service. Additionally, this structure
makes it difficult for programs or firms that serve an “owners agent” role (such as the MA Green
Retrofit Initiative) to coordinate upgrade projects, as they must coordinate schedules with a
single utility vendor.
Program management vendors do not communicate with outside program marketers (such as
community organizations or local government) about whether buildings enter into upgrade
programs, making it difficult for these marketers to learn about what marketing strategies are
effective.
The November 2012 MassSave Program Administrators Three Year Plan suggests that they are
attempting to provide richer customer service, better recruitment of appropriate buildings into programs,
and stronger communication with community marketers. Nevertheless, a pilot program could
experiment with other program management structures.
Priorities for Improving Multifamily Programs
Based on the our interviews during the Fall, the EESP team believes the following should be priorities
for a multifamily program in Cambridge:
●
Better communication with community and city outreach partners.
Improved
communication could be achieved by introducing a ‘customer relationship management’ system,
●
●
●
wherein community based outreach organizations enter building/owner details into an online
application. Contractors would then record the status of these buildings in real-time, which
community outreach organizations can access. This system would allow community groups to
follow up with projects in a timely fashion, as well as understand what outreach mechanisms are
working.
Provide greater project management assistance to owners and property managers. This
includes: helping building owners benchmark buildings, and prioritize their buildings for
upgrades; providing direct management of which technical measures to implement (with ultimate
owner/manager sign-off); assistance in sourcing financing; and construction project
management. Owners should be free to choose their own technical scope of upgrades,
financing, and construction management, but ‘turn-key’ options should be available to them.
Provide comprehensive upgrade services. Owners should be delivered a more complete
assessment of upgrade opportunities. They need not undertake all upgrades at one time,
however. Rather, program assessments could note a comprehensive list of upgrade measures,
with recommendations for when certain measures are appropriate (e.g. immediately, at releasing, when performing HVAC/envelop maintenance, etc.) Programs should have information
systems which allow buildings to understand when they will be upgraded.
Integrate healthy home improvements to the greatest extent possible. Have the flexibility to
accommodate new healthy home initiatives, and sources of funding, as these come online.
Integrate basic healthy homes assessments into assessment protocols, and include upgrade
recommendations.
Program Management Options – Whether to engage multiple vendors
The following are options for the management of a pilot in Cambridge:
●
●
Continue the current single principal vendor structure, mediated by the MMI.
Pilot a program structure that allows multiple lead contractors, providing they are pre-approved
by the program administrator. This structure is similar to the MassSave for Homes, which allows
multiple lead contractors.
Regardless of the program structure, an “owner’s agent” (similar to the MA Green Retrofit Initiative)
could be sponsored in some fashion for projects that wish to use their services. A pilot program in
Cambridge could sponsor such a service for building owners. The program could guarantee that these
services are cost-effective for building owners by associating program fees with their utility meters (see
section 3.2 below), and charging less than building owners’ program fees.
Potential Practicum Work Items



Develop a better understanding of the typical project management costs to deliver a ‘cradle to
grave’, turn-key energy management project.
Devise a program structure that could deliver turn-key project management to building owners at
no upfront costs, paid for via owners’ energy savings.
Determine principles for a workable inter-operable ‘customer relationship management’ system,
to be used by community outreach personnel, project contractors, and vendors.

Decide if a multiple contractor program structure is appropriate. If so, develop principles for its
implementation.
3.2 Financing – An On-bill Tariff Repayment Scheme
Overview
The EESP team believes that an on-bill tariff repayment mechanism can facilitate the financing of
energy efficiency in multifamily housing, and other building types. On-bill tariffs can overcome upfront
cost barriers to energy efficiency by enabling customers to pay back the initial costs of upgrades over
time via a charge on their utility bill. They also address the split incentive barrier, by associating
repayments for upgrade work with the utility bill to which energy savings accrue.
Background
Financing challenges in large part have precluded the widespread adoption of energy efficiency
measures. High upfront costs for efficiency upgrades, as well as the split incentive problem between
landlords and tenants, have often dissuaded customers from making investments in energy efficiency.
In addition customers often lack information about financing programs, perceive them as costly or timeconsuming or face credit barriers to accessing financing. Effective financing programs for multi-family
efficiency must proactively address these issues.
On-bill repayment presents a promising approach to tackle many of the aforementioned challenges.
Under on-bill repayment financiers make upfront investments in energy efficiency measures and the
utility bill-payer then pays back these initial investments over time via a monthly surcharge on his/her
energy bill. As a result the upfront cost barrier is largely eliminated, and the customer further benefits if
the payback terms are structured such that the resulting monthly energy savings exceed the monthly
repayments.
There are two main types of on-bill repayment measures: on-bill loans and on-bill tariffs. On-bill loans
are non-transferrable and stay with the borrower, so even if a tenant moves out of a unit or a building is
sold before the upfront efficiency investment is entirely repaid, the tenant or building owner in question is
still responsible for paying off the balance of the loan. On-bill tariffs, on the other hand, are tied to
specific properties via utility meters; when a tenant moves out or a building is sold, the new tenant or
building owner assumes responsibility for the monthly repayments where the previous tenant or owner
left off. As a result on-bill tariffs present a powerful strategy for addressing the split incentive challenge,
as they ensure that landlords or tenants can benefit from efficiency investments without facing a longerterm financial burden.
Important considerations for a on-bill financing pilot include:
Fund management – A Fund Manager is required to: determine underwriting criteria, including
standards of creditworthiness of its customers; source capital to subsequently lend to projects; engage
in customer management and communications; coordinate with other program partners; ensure
compliance with lending laws; and other responsibilities. Traditionally, utilities have been hesitant to
take on these responsibilities, as they lie beyond their scope of expertise. Some programs include third
party fund managers (or multiple lenders) who simply use a on-bill tariff as a repayment vehicle. MPower
(profiled below) is one such example of a fund manager and on-bill repayment system.
The source of funds - A variety of different sources of financing can be used for upgrade projects.
Relying exclusively on utility ratepayer funds precludes energy efficiency programs from achieving scale
and can also put utilities in the position of acting as financiers – a role beyond their traditional areas of
expertise that can raise overhead costs and expose them to liability under consumer lending laws. To
address these issues, effective programs must leverage outside sources of capital and enable utilities to
act as capital intermediaries rather than fund managers. Additional sources of capital include debt (e.g.
from Community Development Financial Institutions [CDFIs] and banks), equity (e.g. from federal New
Market Tax Credits and mission-driven investors) and foundation and government grants. These
sources of capital along with existing utility ratepayer funds can be pooled into a broader energy
efficiency fund, which can be managed by a non-utility partner with relevant financial expertise. The
fund can then directly finance energy efficiency upgrades and recoup these upfront payments via the
monthly on-bill tariff.
Underwriting criteria - Customers’ creditworthiness and/or credit rating are also often barriers to
financing. Some efficiency programs using on-bill repayment systems have used customers’ utility bill
payment history as a proxy for creditworthiness.
Security – When a lender makes a loan, they typically want security – that is, a claim to some property
if they are not repaid. Typically, unsecured loans will have higher interest rates, as they present less
risk to lenders. However, households may be less likely to agree to assume debt, if a lender has a claim
to their property. On-bill repayment systems can use the threat of having utilities discontinued if
payments are not made as a form of limited security; repayment rates tend to be quite high in the few
on-bill repayment systems introduced in North America to date.
Establishing appropriate utility billing systems - On-bill repayment can often require complicated
modifications to utility billing systems, and NSTAR in the past has declined to implement on-bill
repayment in Cambridge for precisely this reason. 12 However given the City of Cambridge’s and
NSTAR’s current mutual interest in developing a multifamily efficiency pilot that can be a model for longterm programmatic change, we believe the time is now to revisit these issues and think critically about
strategies to implement on-bill tariffs in the multifamily sector.
MPower – An Innovative On-bill Repayment Mechanism in the Multifamily Space
The example of MPower, a new energy efficiency program in Oregon that uses on-bill tariffs to target the
multifamily affordable housing sector, is instructive with respect to the financing issues outlined above.
The program currently draws 30 percent of its funding from utility incentives, 20 percent from U.S.
Department of Housing and Urban Development (HUD) grants and 50 percent from CDFI debt; in the
12
Cascadia Consulting Group. 2008. An Innovative Financing Mechanism: On-bill Financing. Prepared
for Seattle Green Building Taskforce.
long term the program seeks to structurally supplant the HUD grants with equity from New Market Tax
Credits to ensure sustained financing.13 The program fund is managed by the non-profit Network for
Oregon Affordable Housing, and organizations such as the CDFI Craft3, the Energy Trust of Oregon and
Enterprise Community Partners provide additional support in terms of funding, technical assistance and
service delivery. The MPower model highlights the need for strong partnerships and a deliberate
stakeholder engagement strategy to ensure sustainable program design and financing, and we
encourage the City of Cambridge to play a leadership role in convening relevant financial players who
can support and manage an energy efficiency fund.
Other considerations
In conjunction with on-bill repayment via a tariff mechanism, Cambridge and NSTAR can also consider
several other strategies to address financial barriers to energy efficiency. These include providing
energy data before or at the point of loan application to enable lenders to incorporate cost and savings
projections into their underwriting, using financing products to bundle together multiple energy efficiency
measures to spur deeper retrofits, and using public benefit and utility funds to provide credit
enhancements or buy down interest rates.14 Employing a portfolio of these approaches will ensure that
both customers and lenders can access important information, reduce their overall financial risks and
have stronger incentives for participation.
Potential Practicum Work Items
●
●
●
Develop guidance for establishing and managing a Fund through which on-bill repayment could
be made. This could include suggested terms for an RFP to engage a on-bill repayment fund
manager.
Develop a pro-forma, suggesting what IRR of measures could be included in projects, given
different terms of financing; the blend of financing sources; and how the financing could be
subsidized by utility or government sources.
Articulating principles for dividing energy payments between different energy meters.
3.3 Transparency – An Energy Map Benchmarking and Disclosure Tool
Overview
In this practicum, building an energy map seeks to help overcome the landlord-tenant barrier in making
efficiency changes in multifamily buildings. By illuminating energy differences among multifamily
buildings, prospective tenants will be able to make more informed decisions about which apartments
they choose to rent. By publicly disclosing building performance, landlords may feel social pressure to
improve their buildings. Moreover, government agencies and other efficiency-related agencies could
target lower performing neighborhoods and buildings for upgrades.
13
Warner. 2012. Personal Communication.
ACEEE. 2012. On-bill financing for Energy Efficiency Improvements. http://aceee.org/researchreport/e118
14
Potential Impact
The Energy Map has the potential to influence the housing decisions of renters. Mapping tools for other
types of information are already commonly used, so there would be a very short learning curve for users.
Presuming that energy data is readily available through a government mandate, the next biggest
obstacle may be creating awareness of the map so that it becomes popularly used. Integrating social
media could help to address this issue and Walk Score could prove to be a model for diffusing rental
information to other websites.
The Energy Map could be used to enable other community based social marketing campaigns. The
visual display of building performance in colors (e.g., green, yellow, red) may establish new social norms
which encourage landlords to upgrade their buildings. City agencies or utility departments responsible
for implementing residential efficiency programs could use the map to more effectively target their
programs at buildings and communities most in need.
The map may also be used to develop other creative outreach strategies. For example, the Energy Map
could be used in an energy efficiency competition. Blocks, neighborhoods, or even friends living in
disparate buildings could form teams to compete against each other to save the most energy. The
Energy map could be used in a dynamic web platform to monitor building performance and show how
different teams are faring against each other.
By revealing the energy performance of buildings on the public Energy Map renters can make more
informed decisions about their housing decisions and this may ultimately encourage landlords to
upgrade their buildings. Moreover, the map could also provide the opportunity for more geo-targeted
efficiency outreach and the opportunity to develop other creative community-based social marketing
programs.
The Landlord-tenant Barrier
Creating more transparent information on energy use and utility bills in rental units could open a door to
implementing more efficiency upgrades. For many tenants, utility costs are unknown when they sign
leases and can significantly increase their monthly living expenses. If prospective tenants were able to
understand their expected utility bills prior to making a housing decision, they would be able to choose
apartments within their budget or ones that they perceive to be more “green” if that is something they
value. Landlords would realize that tenants were selecting certain apartments over others because of
energy performance. This could prod them to invest in efficiency strategies so their rental units would
become more desirable. Moreover, if energy information on multi-family rental units is displayed publicly,
landlords may feel some social pressure to make their buildings more efficient.
Building an interactive map to help prospective renters identify high energy consuming apartments
would create social incentives for landlords to upgrade their buildings. Moreover, other interested parties
such as government agencies and energy contractors could use the map to target neighborhoods for
energy efficiency outreach.
The Energy Map
Energy information could be displayed in an interactive energy map (the Energy Map) where renters can
get estimates of monthly electricity and gas bills. Buildings could be color coded for relative energy
performance compared to similar buildings in the area (e.g. red is a high energy user, yellow is
moderate, and green is low). Users could click on a building to see average monthly electricity and gas
bills (in kWh, therms, and dollars) as well as heating fuel type. Other information on the map could
include: a benchmark or efficiency potential score, recommended upgrades, available rebates with the
appropriate links, and estimates of potential savings.
A map is the optimal energy display tool in this market for many reasons. Renters will likely be looking at
a map to determine whether the potential housing location suits them. Other online resources already
use maps, so this is a comfortable tool for many people. For example, Yelp - an online public review
platform for restaurants, bars, and other places - pairs entries with a Google Maps location. Moreover,
using a map could enable city agencies or energy contractors to identify neighborhoods which show the
greatest need for energy efficiency upgrades.
Elements Needed for Energy Map
The following components are needed for the Energy Map, though this list is not exhaustive:
● Monthly energy use data from multifamily homes
○ Potential sources: acquired from the utility or residents voluntarily release data
● Building characteristic information
○ Potential sources: Tax assessor records, GIS records, user input, official audit
● Benchmarking and building rating
○ Uses energy data and building characteristic information to score individual buildings. An
appropriate benchmarking system that uses the information available needs to be
developed or selected. (The image below represents how different information sources
may feed a rating for an individual building.)
● Database management
○ Building a database to manage utility energy data, building characteristics, and building
ratings and to communicate with the website.
Monthly energy use data
To build the Energy Map, monthly energy use is needed from rental units. Energy data is increasingly
available, though still difficult to access, especially in the residential sector. NSTAR has implemented
Green Button functionality and energy information can be downloaded as a CSV or XML file. The file
includes the associated address, the start and end dates of 12 previous billing periods, the KWH usage
for each period, and the cost ($) for each period.
Two different approaches could be used to collect data - either from the utility or from the tenants.
For reasons discussed earlier, utilities have been reluctant to release ratepayer consumption data.
Recently in New York, ConEd has agreed to release data for buildings with three or more tenants
because end users cannot connect the energy usage to a specific tenant. Perhaps this precedent could
pave the way for other utilities to release energy consumption data for multi-family homes in Cambridge,
especially if energy data is presented as an average representing a typical unit in the building. Utilityprovided data would be ideal because it would be up-to-date and access to data would not change as
tenants come and go.
A way to enable the Energy Map and other groups to access data would be for states or the federal
government to mandate public disclosure of energy data. Some building owner may protest due to
privacy or safety concerns. One common safety concern is that if real-time data is publicly disclosed
then it may be possible to tell when buildings are unoccupied leaving them vulnerable to theft. Other
concerns include individuals or organizations simply wanting to keep their energy data private.
Legislation could address the safety issue by requiring disclosure only on a monthly basis so that realtime information remains private. And initial disclosure requirements could focus on multi-tenant
buildings where information could be aggregated to protect privacy and where there may be support
among tenant’s rights groups to give renters more information about units they lease.
If utilities are unwilling to provide data, tenants could voluntarily contribute their own data. Tenants
could manually enter usage from historic utility bills. Or tenants could provide their e-bill account
information and the mapping application could automatically screen scrape their data each month. The
drawbacks to tenant provided data are that not all tenants in a building may participate; manually
entering data is tedious and users may stop doing it eventually; as users move to new apartments e-bill
accounts may change or deactivate, making it difficult to keep up-to-date records; and there would need
to be a marketing campaign encouraging renters to contribute their data to reach a threshold
participation rate that would make the map useful. To map close every building with a reasonable
approximation of energy use, more than 50 percent of multifamily unit occupants in the city would likely
need to be reached.
Building Characteristic Information
As seen above, Green Button downloads provide information on billing period start and end dates, KWH
usage, and cost in dollars of the usage. The building address is also provided. Using the address to
search the Cambridge tax assessor records (these are publicly available) could provide other
information such as heat type, living area, and whether there is central AC. GIS databases could
provide information on parcel size and building height. The building characteristics are needed to
establish a building rating. Depending on the type of benchmarking system selected, owner or tenant
inputs may be required for more sophisticated evaluation. Ideally, a touchless audit using the publicly
available data could be given so that little or no user input is required for an initial rating.
Benchmarking and Building Rating
Benchmarking and building rating programs in residential buildings can improve the functioning of real
estate markets, allowing greater transparency in the anticipated energy costs of buildings. Such
transparency can help stimulate upgrade activity. The Energy Map could facilitate building rating by
including a benchmarking score for each building represented. Nadkarni and Michaels (2012) articulate
that an optimal building rating and benchmarking system for residential buildings would entail:
●
●
●
●
Requiring annual operational updates.
An asset rating of the building within a specified time (10 years), providing that cost-effective
rating tools were available.
Rating confidentiality, save for web-based disclosure to relevant stakeholders, like owners,
tenants and prospective buyers/lessees.
Public disclosure during time of listing for sale or lease.
●
●
A standardized process for building asset rating, delivered by a certified rating authority.
A consistent, easy to understand energy label, providing both asset and operational scores,
comparable within and between residential building types.15
The Energy Map needs to use a benchmarking system that can be applied to many homes, with
possibly limited data, and that is accurate enough to establish user confidence. The Energy Map should
also make a distinction between a building’s asset rating versus and its operational rating (e.g., a
building may receive a score of 89/100 but the residents operate it at a score of 75/100), either by giving
two scores or making it clear which rating is being displayed. Distinguishing between an operational
score and an asset score could alleviate concerns of landlords that even if they upgrade their buildings,
tenants would make poor energy decisions and negatively impact their building’s rating.
Different building benchmarking and asset rating systems are available on the market today. Notably,
Wego Wise benchmarks multifamily buildings, while a variety of other building modeling platforms can
develop building efficiency potential scores with minimal inputs.
Potential Practicum Work Items
● Develop a strategy to access the necessary energy data information.
○ Decide whether it should be crowd-sourced or provided directly from the utility.
○ Develop an action plan to acquire the data.
● Evaluate different benchmarking models and select the best system given the data available.
● Reach out to existing energy efficiency firms like WegoWise or Next Step Living to see how to
develop a partnership and leverage their resources.
● Determine what information should be displayed on the map (what information would most
inspire action).
3.4 Recruitment - Demand -Side Stakeholder Engagement & Marketing
Overview
The goals of demand-side engagement and outreach are two-fold. First, we hope to directly recruit
participants into energy efficiency upgrade programs. Second, we hope to indirectly achieve energy
savings by soliciting energy consumption data from individuals, allowing us to create analytical tools that
move the multifamily housing market towards efficiency.
To achieve this, we will need to conduct a thorough outreach campaign to various stakeholders in the
multifamily housing sector. The Cambridge multifamily sector is a crowded space, including both a wide
range of stakeholder views and a number of distinct market segments. As such, it will be challenging to
develop a single program with broad appeal in the market.
15
Michaels and Nadkarni. March 2012. A New Model for Disclosing the Energy Performance of
Residential Buildings.
Fortunately, several useful tools allow us to identify and deploy effective strategies to push the market
towards efficiency. Two of these are Stakeholder Analysis and Community-Based Social Marketing.
Below, we discuss the complexity of the multifamily sector and the basic principles behind each of these
methodologies. Additionally, a preliminary approach to conducting a stakeholder analysis in the
Cambridge multifamily context is included in the Appendix.
The Segmentation of the Multifamily Market
The multifamily housing sector is an heterogeneous mix of market segments, each with their own
barriers to and opportunities for energy efficiency. Some of these segments share a unique trait that
may demand that program administrators devote additional resources that target specific barriers.
Others may present an unusual opening for and efficiency program that is not present in the remainder
of the multifamily sector. Below, we identify several market segments that must be considered in any
program design and outreach process.





Resident-Landlords. While it is difficult to determine their exact number, a number of
Cambridge’s landlords reside on-site in otherwise rental properties. Unlike most property owners,
these individuals share the same self-interest in efficiency upgrades as single-family owners
and—if they can be identified—could be targeted accordingly. Additional incentives could be
designed to encourage landlords to invest in efficiency upgrades for the other units in their
property as well as their own.
Oil-Heated Homes. While smaller than in other parts of the state, a significant number of
Cambridge’s multifamily properties are heated by fuel oil. Because of the difficulty of metering
multi-family tenants individually for oil heat, it is likely that the property owner pays for space heat
in these buildings. These landlords may see energy efficiency improvements as an opportunity to
reduce their operating costs without losing revenue and could be targeted by traditional financial
incentives.
Student Housing. Students account for a sizeable portion of Cambridge’s multifamily housing
market. An efficiency program could take advantage of this fact by creating student-specific
program outreach strategies, either through formal university channels or through informal social
networks. Partnerships with universities could result in co-branded marketing, student-specific
webpages, and support from student services offices that provide resources for students to
advocate for efficiency with their landlords or that advertise a list of preferred property owners.
Alternately, a marketing campaign that encourages tenants to share their energy data could take
advantage of the unique social network of student populations (and could also resonate with the
open-data ethos of MIT’s student body specifically).
Major Employers. In addition to their broad student bodies, Cambridge’s universities are also
major employers in the city. They, along with other anchor institutions, such as the vibrant
biotech community in Kendall Square, could be targeted for partnerships that provide tailored
program outreach to employees, similar to the Michigan Saves program mentioned above.
Condominiums. Currently, there are very few efficiency programs that specifically target
condominiums and address the specific barriers that they pose to energy efficiency. Despite this
difficulty, condominiums compose a notable percentage of Cambridge’s housing market, and it


may be necessary to develop resources that specifically target these units. For example,
program administrators could create a marketing campaign encouraging condominium owners to
discuss energy efficiency with their neighbors and provide marketing materials that are intended
to explain program benefits specifically to condominium boards.
Property Management Firms. Many landlords in Cambridge contract with specialized property
management firms to take care of their properties and deal with tenants. This introduces an
additional level of complexity to an energy efficiency program design as there is little direct
interaction between landlords and tenants in these buildings. However, this could also be an
opportunity to recruit property managers to act as advocates for energy efficiency.
Vacant/Available Units. Units available on the rental or real estate markets can act as valuable
points of entry for efficiency program managers. Potentially working in partnership with realtors
and property brokers, a program that offered certification or recognition of energy efficiency
improvements could be effective in changing the rental market by increasing demand for efficient
units.
While this list certainly does not account for the whole of multifamily sector in Cambridge, it includes
some of the markets segments that could realistically be given special attention in a program design
process. Understanding the specific needs and opportunities of these segments is a crucial step in
sketching out the parameters of an efficiency program. These parameters may be further set using the
methodologies discussed below.
Stakeholder Analysis
Program administrators often make the mistake of designing a program based on what they think will
work, rather than on what targeted groups have told them will work. Unsurprisingly, understanding the
perspectives and interests of stakeholder groups and incorporating them into a program design can be
very useful in building a successful program. Stakeholder analysis provides a formal means of
determining the categories of actors that are relevant to a program as well as a methodology for
mapping their interests.
In a stakeholder analysis, planners begin by assembling a preliminary list of the actors that they believe
are relevant to the problem at hand. In the Cambridge multifamily sector, stakeholder groups might
include landlords, tenants, property managers, property brokers, building contractors, and institutional
actors. After identifying the preliminary list, analysts reach out to the identified actors, gauge their
interests and concerns on a given issue, and ask what other groups may have a stake in the issue. This
process is repeated until planners are left with an array of stakeholders and issues that fully represents
the range of perspectives and opinions on a given issue.
This array is an excellent starting point in the program design process, as it provides administrators with
a means of developing a program that speak to all parties’ interests. In this context, a stakeholder
analysis would allow us to determine which actors are likely to act as assets or roadblocks in a given
program design. It will act as a resource in proposing options that have high probabilities of success.
Community-Based Social Marketing
Another useful program-design methodology to consider in this project is Community-Based Social
Marketing (CBSM). CBSM draws heavily from social psychology and helps program administrators
target the behavioral changes that can help to achieve program goals. The formal CBSM process has 5
components:16
1.
2.
3.
4.
5.
Selecting the behaviors to be targeted.
Identifying the barriers to changing these behaviors and the benefits of doing so.
Developing strategies for influencing the targeted behaviors.
Conducting a pilot program to test these strategies.
Implementing successful strategies at scale.
In the context of a multifamily energy efficiency program, the types of behaviors that might be targeted
by a CBSM program are those that would either help drive participants towards home retrofits or make
energy data more publicly accessible. These might include soliciting tenants to donate their energy
consumption information to a crowd-sourced data collection effort, asking condominium owners to make
energy use an item of interest for their homeowner associations, or encouraging landlords to sign up for
a free energy audit through Mass Save. In a CBSM program, these and other behaviors would be
evaluated to determine which are most useful in achieving the goals of a program.
Once the targeted behaviors have been determined, CBSM program architects investigate the barriers
and benefits of given behaviors. This step would entail an information-gathering campaign to help
planners understand why targeted populations aren’t already adopting the desired behaviors, and what
could be done to convince them to switch. The methods included in this step could include focus groups,
surveys, a literature review, or direct observation.
After assessing the barriers, program designers then begin to formulate strategies for intervention. The
strategies selected in this step vary dramatically based on the local context and the problem of interest
but there are several general tactics that have proved useful in the past. These include: providing a large
number of resources to early adopters and relying on social networks to diffuse their behavior,
advertising local community members who are (and are not) adopting desired behaviors, and soliciting
token commitments from community members before asking that they engage in deeper behavioral
changes.
CBSM principles can be useful in achieving the demand-side outreach goals declared above.
Furthermore, combining these methods with both a thorough understanding of the segmentation of the
local housing market and a robust stakeholder assessment would ensure that the outreach and
marketing strategies selected through the CBSM process are uniquely tailored to the local context.
Recent Activity in Energy Efficiency Program Outreach
16
McKenzie-Mohr, Doug. Fostering Sustainable Behavior: Community-Based Social Marketing.
McKenzie-Mohr and Associates, 2010.
In designing an outreach and marketing plan for Cambridge’s multifamily sector, it is useful to
understand the types of approaches that have been tried elsewhere. A number of program managers
across the country are experimenting with new ways of driving demand in for energy efficiency, and it is
worthwhile to be familiar with their work. In particular, DOE’s Better Buildings Neighborhood Program
(BBNP)17 has worked as an incubator for new and innovative program design elements, and several of
the approaches that have been tried though the initiative are discussed below. However, the existence
of these options does not preclude the necessity of the program design methods discussed above, and
program administrators in Cambridge should not merely replicate methods that have been tried
elsewhere.
●
●
●
●
Incentivizing Community Organizations. Currently, NSTAR’s multifamily energy efficiency
program conducts outreach through a number of community organization partners. However,
these organizations are not given a clear incentive to participate other than the opportunity to
offer a service to their constituents. Some energy efficiency programs, such as Los Angeles
County’s Energy Champions program, 18 offer financial incentives to local non-profits that
successfully recruit program participants. In Massachusetts, Next Step Living is currently
implementing a similar approach.
Deadline-Based Marketing. Some energy efficiency program implementers--such as Efficiency
Maine19--use deadlines to more effectively market energy efficiency program. By offering a lowcost installation for a limited period of time, these programs are able to motivate potential
participants to take action.
Bulk Purchasing. Some programs coordinate the purchasing efforts of multiple participants with
a single contractor to achieve discounts from bulk purchases. Solarize Portland has been
particularly successful in negotiating low prices for solar panels through this approach.20
Leveraging Anchor Institutions. Similar to community organization approaches, some
programs leverage trusted organizations in the target community to conduct program outreach
through. For example, the Michigan Saves program partnered with Grand Valley State University
in Grand Rapids to market and implement their energy efficiency program.21
Potential Practicum Work Items
Obtaining buy-in from landlord and tenant groups and condominium associations will be a crucial
element to the success of any multifamily energy efficiency program. Over the coming months, we
propose to conduct outreach efforts to the many stakeholder groups involved in Cambridge’s multifamily
housing sector in order gauge their interests and concerns regarding energy efficiency. The
methodological tools provided by stakeholder analysis and community-based social marketing will be
very useful in guiding this process. Specific actions that may be taken are listed below, and a preliminary
approach to a stakeholder assessment is laid out in detail in the appendix.
17
http://www1.eere.energy.gov/buildings/betterbuildings/neighborhoods/
https://energyupgradeca.org/county/los_angeles/energy_champions_home
19
http://www1.eere.energy.gov/buildings/betterbuildings/neighborhoods/maine_profile.html#driving
20
http://www.portlandoregon.gov/bps/article/405686
21
http://bbmgr.org/wp-content/themes/Starkers/media/01172012BBMGR_GVSU_INFO.pdf
18
Stakeholder Mapping – A preliminary set of stakeholders is provided in the appendix. This is not,
however, an exhaustive list of the individuals who are concerned with a multifamily energy efficiency
program in Cambridge and who must be consulted in its development. We must reach out specific
individuals in the identified groups and, through discussions with those groups and individuals, identify
additional stakeholder groups and develop a matrix of interests and interested parties.
Focus groups - Due to the fragmented nature of the rental community in Cambridge, it will be
prohibitively difficult to conduct outreach to each stakeholder that would be impacted by a program.
Instead, we plan to conduct focus groups with representative samples of property owners, tenants, and
other stakeholder groups. Through these interviews and focus groups we discuss the concerns and
interests of various stakeholders and identify one or several program delivery mechanisms that could be
used to implement an effective efficiency program in various settings.
Interviews with building owners and managers - An important aspect of these discussions will be to
identify and interview multifamily properties fitting our target profile that have already implemented
energy efficiency upgrades. We intend to interview a sample of landlords and tenants in this group to
understand why the decision to invest in an upgrade was made, and what factors acted as important
drivers in that decision. These findings would be crucial in developing an effective program design.
Deployment of intervention strategies - The previous steps will be useful in revealing the potential
levers—behavioral or otherwise—that could be pulled by a multifamily program design in Cambridge.
Based on these steps, we will have a clearer idea of what interventions are both feasible and likely to
succeed, and we will be able to craft a program design that includes them.
3.6 Upgrade Ordinances
Overview
Residential Energy Conservation Ordinances (RECOs) specify that as part of the purchase of an
existing rental housing unit, property owners must either fulfill a prescriptive set of mandatory upgrades
or invest a set portion of the purchase price in efficiency improvements.22 The City should consider
opportunities to implement energy conservation ordinances. Likewise, the Massachusetts Green
Communities Designation and Grant Program and the Massachusetts Board of Building Regulations and
Standards should provide a standard energy improvement code for existing construction, which leading
Green Communities can adopt.
This policy option overcomes the split incentive problem by mandating that one party--the property
owner--make efficiency improvements as part of a property sale. However, there are two substantial
drawbacks to this policy tool. The first is the political difficulty of implementing such an ordinance, and
22
Beth Williams thesis.
the second is its limited effectiveness. Because the policy only comes into effect when a housing unit is
sold, an upper limit is enforced on the number of homes that would be retrofitted through this approach.
The EESP team believes that, ultimately, requiring upgrades may be necessary to realizing deep energy
efficiency across a broad range of properties. However, it is politically difficult to get such requirements
established. Thus, efforts to grow the voluntary market for upgrades are justified.
Background
RECOs have been used to advance energy efficiency since the 1980s and are in place in several cities
across the nation--including San Francisco, Berkeley, Austin, Boulder, Ann Arbor, Minneapolis,
Burlington, and Roseville, CA--as well as statewide in Wisconsin. In other areas, such as Portland and
San Diego, proposed RECOs were abandoned due to opposition from real estate organizations and
other groups. However, opposition from commercial groups is not a given. Realtors in San Francisco
and Berkeley use energy upgrades as a selling point for buyers, 23 and in Austin, realtor groups
negotiated and support a watered-down ordinance that requires energy audits, but not mandatory
upgrades.24
There are slight variations in program scope and administration that are worth discussing. While most
programs apply to the entire residential sector, the programs in Wisconsin, Ann Arbor, and Minneapolis
specifically target multi-family housing. 25 This implies that they are intended to address--or rather,
sidestep--the split-incentive problem in rental housing. While most programs are run through a housing,
building, or code department, the ordinances in Burlington and Roseville are operated by local municipal
utilities.26
There are also differences in penalties for non-compliance. Most cities specify monetary penalties for
noncompliance that vary in severity. In Ann Arbor and Wisconsin, noncompliance has additional legal
consequences, and can actually lead to jail time. Conversely, Roseville and Berkeley do not have any
established enforcement mechanisms to deal with noncompliance. 27 In Boulder, landlords must be
licensed by the city, providing an additional leverage point for enforcement.28
23
ACEEE.
http://www.iamu.org/services/electric/efficiency/Attachment%20B%20Residential%20Energy%20Conservation%20
Ordinances%20ACEEE.pdf
24
Pat Coleman thesis.
25
ACEEE.
http://www.iamu.org/services/electric/efficiency/Attachment%20B%20Residential%20Energy%20Conservation%20
Ordinances%20ACEEE.pdf
25
26
ACEEE.
http://www.iamu.org/services/electric/efficiency/Attachment%20B%20Residential%20Energy%20Conservation%20
Ordinances%20ACEEE.pdf
27
ACEEE.
http://www.iamu.org/services/electric/efficiency/Attachment%20B%20Residential%20Energy%20Conservation%20
Ordinances%20ACEEE.pdf
28
Find a source.
There has been a general failure to track and evaluate the impact of RECOs, and as a result, there is
little information available regarding their effectiveness in achieving energy savings. 29
Applicability to Cambridge
While implementing a RECO is difficult in any context, Cambridge is perhaps better situated than other
most municipalities to make a successful attempt. Cambridge’s participation in the Green Communities
Act and its implementation of stretch energy codes could provide a foundation for further actions around
energy regulation. However, any attempt to enact a RECO is likely to face opposition from landlord and
real estate interests. Additionally, the Cambridge city government lacks certain legal authorities over
landlords—such as the ability to withhold rental licenses—that have been assets to programs in other
areas. Therefore, implementing a RECO in Cambridge may be both politically and logistically difficult.
Potential Practicum Work Items
Time-of-sale upgrade ordinances present a unique means of addressing the split-incentive problem in
multifamily energy efficiency, largely by sidestepping the issue entirely. However, due to the great
political difficulty in establishing and implementing a RECO, it should not be assumed that Cambridge
will be able to enact an ordinance. Instead, through conversations with stakeholders occurring
throughout the engagement process, RECOs should be discussed as one possible solution for
achieving energy efficiency in Cambridge. If a universally beneficial solution can be found, an energy
ordinance may indeed be implemented in Cambridge, but it should only be considered as one of many
potential solutions.
29
Beth Williams thesis, ACEEE.
Appendixes
Program Summary
Program
Technical measures &
available incentives
Income
Criteria
Funding
Source
Administration &
Contractors
Associated
financing
mechanism
Outreach
Channels
MassSave Home
Energy Services
Program (1-4 unit
buildings)
Technical measures: Instant
savings measures (CFL’s,
programmable thermostats,
faucet aerators), insulation,
air sealing,
heating/ventilation/HVAC
systems
>60% of AMI
Utility
ratepayer
funds
Administrators:
NStar, National
Grid, other utilities
0% HEAT loan for
qualified
measures – up to
$25,000 with 7year payback
Utilities,
contractors, nonprofit and
community
organizations,
local businesses
Loans
Utilities
Contractors: Next
Step Living, Co-op
Power, GreenTek,
etc.
Available incentives: 75% off
up to $2,000 on insulation,
no-cost air sealing, rebates
for heating equipment
MassSave MultiFamily Program
(5+ unit buildings)
Technical measures: Energy
efficient lighting upgrades
and controls, occupancy
sensors, water heating
equipment, domestic hot
water measures (low-flow
>60% of AMI
Utility
ratepayer
funds
Administrators:
NStar, National
Grid, other utilities
Contractors:
Conservation
showerheads, aerators, and
pipe wrap), programmable
thermostats, insulation, air
sealing, high-efficiency
heating and cooling
equipment upgrades and
controls, ENERGY STAR®
qualified refrigerators and
other eligible appliances
Low Income MultiFamily Program
(LEAN) (5+ unit
buildings)
Massachusetts
Green Retrofit
Initiative (5+ unit
buildings)
Service Group
Technical measures:
Replacement or repair of
heating systems and/or
controls, replacement or
repair of hot water heating
systems, building envelope
upgrades through air sealing
and insulation, lighting
upgrades, appliance
upgrades, and ventilation
upgrades
50% of units
at or below
60% of AMI
Technical measures:
Benchmarking of historical
energy and water
consumption, on-site building
assessments, energy and
water retrofit project financing
50% of units
at or below
80% of AMI
Available incentives:
Coordination with existing
rebate or incentive programs
Utility
ratepayer
funds
Administrators:
Action for Boston
Community
Development,
Action Inc.
Grants
LEAN Advisory
Committee
(property owners,
community
development
corporations, nonprofits and
community
organizations)
Grants, loans
Community
development
corporations, nonprofit and
community
organizations
Contractors:
Barr
Foundation,
Department
of Housing
and Urban
Developme
nt
Administrators:
New Ecology,
Boston Local
Initiatives Support
Corporation
Contractors:
Appendix: Green Leasing
Overview
Green Leases are one policy tool that has been implemented to overcome the split incentive problem
discussed above. The term refers to a standard rental lease that includes a mechanism to finance
energy efficiency improvements in a home. Typically, a Green Lease includes language stating that if a
landlord makes improvements of a certain type, he may raise the rent immediately to begin to recoup
the cost. If structured properly, a Green Lease benefits both landlords—because repayment on capital
improvements is guaranteed—and tenants—whose increases in rent will be more than offset by
decreases in utility bills. As part of defining a scope for the Cambridge Multifamily Energy Program, we
have investigated the viability of utilizing Green Leases and related policy tools that target the split
incentive problem.
Previous Use
While Green Leases are not uncommon in the commercial sector,30 the practice has not yet gained a
foothold in the residential rental market. Late last decade, the Cambridge Energy Alliance began to
consider advocating for their use locally, but the initiative lost steam and has not been restarted.31
Applicability to Cambridge
Previous use of Green Leases in the residential housing market have generally been restricted to rent
controlled areas. In these situations, Green Leasing provides a convenient and mutually beneficial
mechanism that allows landlords to be compensated for making improvements to the home without
causing an increase in total living costs to the tenant. This benefit is not as clear in a rental market
without rent control, where there is no legal barrier to a landlord who wishes to raise rent upon expiration
of a lease.
Cambridge currently has an uncontrolled rental housing market. Rent control had previously been
established in the 1970s, but the market was deregulated by a statewide ballot initiative in 1994.
Predictably, opening the market has led to both increased average rents32 and greater investment in
rental housing33 in Cambridge.
30
See: http://www.imt.org/finance-and-leasing/green-leasing, http://www.greenleaselibrary.com/bestpractices.html, http://www.ci.berkeley.ca.us/uploadedFiles/Planning_and_Development/Level_3__Energy_and_Sustainable_Development/BEES2011FINALfullWeb.pdf
31
Beth Williams thesis, Jason Jay thesis.
32
New York Times, http://www.nytimes.com/2003/06/15/nyregion/when-rent-control-just-vanishes-bothsides-of-debate-cite-boston-s-example.html?pagewanted=all&src=pm
33
Henry Pollakowski, MIT Center for Real Estate. 2003.
http://www.nmhc.org/files/ContentFiles/ThirdPartyGuide/cr_36.pdf.
Green Leases are structured to confront a formal barrier in the rental housing market, where landlords
may be unable to guarantee a revenue stream (in the form of increased rents) to recover the cost of
capital investments. However, because of the lack of rent control, the barriers to rent increases in
Cambridge are informal rather than formal. Landlords are hesitant to increase rents because of the
extralegal protests raised by tenants. The key barrier is the willingness of tenants to accept rent
increases on principle. Green Leases are not intended to confront this barrier, but instead present a
legal mechanism for certainty and transparency once parties have already agreed to the general
concept.
Potential Practicum Work Items
While Green Leases may be useful in providing a formalized mechanism of implementing efficiency
improvements in rental housing, we do not believe that they confront the most fundamental barriers to
efficiency in multifamily housing in Cambridge—that is, the agreement by all parties that efficiency
improvements and resulting rent increases are mutually beneficial for both landlord and tenant. In light of
this, we believe that a focus on Green Leases would a misallocation of this effort’s limited resources and
political capital. Instead, we believe that our efforts should focus on the informal barriers preventing
energy efficiency in the multifamily housing market and must entail a comprehensive outreach and
educational campaign to the small landlord and tenant communities.
Appendix: Stakeholder Analysis Approach
Overview
There is a wide range of groups that must be consulted in as part of a stakeholder analysis. Because
there is little centralized representation within the city of Cambridge for the major stakeholder categories
(landlords, tenants, condominium owners), it would be prohibitively difficult to reach every individual with
a stake in multifamily energy efficiency. However, there are several existing groups that represent
varying interest groups. Our stakeholder analysis process should include conversations both with these
formal organizations and with individuals chosen to represent broad and unorganized groups.
Existing Groups
On the landlord side, there are several state and regional organizations of small property owners to
conduct outreach to. These include the Small Property Ownership Association,34 the Massachusetts
Rental Housing Association,35 the Greater Boston Real Estate Board,36 and the Boston chapter of
the Institute for Real Estate Management.37 There are also a number of condominium associations
that represent property owner interests as well.
34
http://spoa.com/
http://www.massrha.com/
36
http://www.gbreb.com/
37
http://www.iremboston.org/
35
While less organized, there are also established mechanisms that can be used to reach tenant groups.
The focus of tenant advocacy groups is typically on eviction and poverty, though it clear that energy
savings has relevance to this mission. The nonprofit Cambridge Economic Opportunity Committee38
serves as the local Community Action Program. On the city side, the Environmental and
Transportation Planning Division39 within the Cambridge Community Development Department is also
an important actor in this space. Unfortunately, the majority of tenant-engagement activities are
restricted to subsidized housing, and there are few existing means of organization among market-rate
tenants. This is made more difficult by the transitory nature of Cambridge’s rental population, particularly
its students. One final group of interest that may advocate tenants’ interests in stakeholder discussions
are Heating Assistance Organizations that provide resources to support residents that are unable to
pay their energy bills during the winter.
Beyond landlords and tenants, there are a number of related industries with an interest in energy
efficiency in multifamily housing. These include, but are not limited to, property management firms,
energy contractors, and realtors.
Another relevant actor is Just-A-Start,40 a local organization dedicated to mediating landlord-tenant
disputes in the Boston area, with a heavy focus on Cambridge. Just-A-Start’s mediators have valuable
experience navigating the institutional context of landlord-tenant relationships, and it is likely that they
will be able to act as an important resource in conducting outreach and information to these groups.
Finally, NSTAR’s current multifamily housing program includes an outreach component conducted in
partnership with local community organizations and likely has established inroads into local communities
that can be leveraged for this project.
Potential Practicum Work Items
One approach to stakeholder analysis would take a three-tiered approach to gathering input. These
steps would include:


38
Interviews with Formal Organizations. Representatives could be easily identified through
publicly available information. Interviews with these representatives would be valuable both in
determining their interests and concerns relating to multifamily energy efficiency and their views
on stakeholder groups that should be consulted in the process.
Focus Groups with Representative Individuals of Stakeholder Groups. Ideally, this would be
a random sample of landlords, tenants, condominium owners, property managers, and other
interested parties. It is likely, however, that we will have to resort to less random methods of
selection, relying either on open marketing, personal relationships, or referrals from formal
groups.
http://www.ceoccambridge.org/
http://www.cambridgema.gov/CDD/etdiv.aspx
40
http://www.justastart.org/
39

Interviews with Previous Program Participants. Previous program participants could be
identified by NSTAR and interviewed to understand both the factors that weighed on the decision
to invest in efficiency upgrades as well as the categories of actor that were involved in the
process.
Case Study - WegoWise
https://www.wegowise.com/
Monitors energy consumption primarily in multifamily buildings.
● Building Type: multifamily/residential
○ Tweaked application so it could comply with NY Law 84 and function for commercial
buildings
○ Developing commercial and single-family residential platform.
● Asset Data:
○ Basic building characteristics that can be discovered in about 27 questions.
○ Do not actively use Tax Assessor data, but are exploring possibilities.
● Operational Data: Accesses E-bill online payment systems most utilities have
○ Monthly reports of energy data
○ WegoWise is not as concerned right now about smart meters and receiving 15-minute
interval data.
● Visualization Tool:
○ Online dashboard
WegoWise is an online platform designed to monitor energy and water use of multi-family homes.
Primarily targeted at property managers, clients pay $5/building/month to have their electric, gas, and
water consumption automatically tracked each month.
As part of the energy assessment for each building, property managers respond to approximately 27
questions regarding the physical characteristics of each property. WegoWise’s main value-add is in
automatically tracking monthly energy consumption and payments. Property managers share e-Bill
account numbers and passwords with WegoWise. WegoWise then screen scrapes data every 20 days
to update energy consumption.
WegoWise offers their clients comprehensive analysis of building energy information. Users can build
custom reports to compare specific buildings and specific energy consumption. Generated charts show
how the client’s buildings perform compared to physically similar buildings in the same climate zone and
with the same type of heating system in WegoWise’s database. Users can also specify a geographic
location for comparison. For example, perhaps they only want to know how their buildings compare to
buildings in Massachusetts, or even more specifically in Boston. They are showed how their buildings
compare to efficient buildings. This efficiency threshold is based upon performance information of the
top 25% of similar buildings in WegoWise’s database. WegoWise also offers the option to compare the
energy performance developments, not just single buildings, which may be valuable to expansive
property owners.
WegoWise offers a simple, easy-to-use energy monitoring tool to property managers. Automatically
capturing utility bill information saves the time of users having to enter information manually. Moreover,
graphs and charts help property managers understand which are their low- and high-performing
buildings. WegoWise has been used to show changes in building performance after retrofits, to help
qualify a building for other energy funding, and to verify LEED performance criteria.
A main obstacle with WegoWise is getting utility data if building tenants pay their own utility bills.
Property managers must have tenants sign releases of information and acquire their individual utility
account numbers and passwords. This can slow the process and some tenants do not want to release
their information. However, if property managers are able to obtain the permission of 50 to 60% of
tenants, WegoWise can calculate an average consumption pattern for units and then create a building
estimate. Some buildings overcome this obstacle by including a data release provision in leases.
WegoWise has developed and extensive network within Massachusetts, but is working nationally with
presences in New York, California, and other areas as well. WegoWise is looking to expand its market
by developing a similar online platform for commercial buildings and single-family homes. Online energy
management is a young market and WegoWise is one of only a few companies in the arena
[EnergyScoreCards is a potential competitor].
Case Study - EnergyView
PDF Report
Community map of building energy performance and individual ratepayer comparison calculator.
● Building Type: Multifamily/residential/commercial
● Asset Data:
○ Tax assessor records and geographic survey information
■ 35 features were collected from these data sets
● Operational Data
○ Monthly electric and gas data from NSTAR
● Visualization Tool:
○ Color-coded map which ranks building performance. This tool was only ever hypothetical
and never launched live.
○ Online calculator for an individual to enter household data outputs graphs on:
■ Monthly electricity use compared to similar homes
■ Electricity usage distribution
■ Monthly gas use compared to similar homes
■ Gas usage distribution
EnergyView was developed by an MIT PhD student and faculty member to model energy consumption
in residential and commercial buildings. Their approach used exclusively remotely available data,
meaning no home visit was necessary, nor did anyone need to collect descriptive information from
building owners or tenants.
Using tax assessor records, geographic survey information, and monthly energy information provided by
the local utility NSTAR, the authors created models to predict energy usage for 6,500 buildings in
Cambridge, Massachusetts. These models were able explain about 75% of observed variance in energy
consumption given building characteristics.
From their models, the authors designed two potential tools. For utilities - which are able to access all of
their clients’ data without privacy restrictions - the authors developed a map which color codes buildings
by energy consumption; this tool enables utilities to readily see which buildings which are consuming
more energy than would be expected by their given features. For individual ratepayers, the others
created an online calculator where users can manually enter their monthly energy information and then
see resulting charts which compare their energy usage to the predicted energy usage of similar
buildings.
The authors noted the difficulty in assigning specific utility records to buildings. If utilities were able to
include a Building ID code which matched with tax assessor parcel IDs, this would facilitate the analysis
process. The authors also stated knowing whether buildings were owner-occupied or tenant-occupied
would be helpful, but that information was not available in tax assessor records.
The authors faced another challenge when multiple meters were associated with one building. They
didn’t necessarily know which meters were attached to units and which were associated with common
spaces. This suggests a potential difficulty in conducting remote energy analyses; without tenant or
owner input, it may hard to know what space meters represent.
EnergyView faces limitations in that due to privacy restrictions, only utilities can use the mapping feature.
Moreover, utility energy data sets do not necessarily identify which meters are for occupied spaces and
which are for common spaces, making the analysis more complicated. However, even with these
obstacles, EnergyView and similar platforms have the potential to be scaled up and offer utilities
mapping tools which could enable them to target efficiency programs at high energy users.
This relationship diagram explains how different data relates to each other in EnergyView.
Case Study – Cambridge Solar Map
http://www.cambridgema.gov/solar/
Academic Paper by Christoph Reinhart and Alstan Jakubiec
Ranks solar potential of roofs and provides info on solar potential, financial costs, environmental benefits,
and installation information.
● Building Type: Multifamily/residential/commercial - indiscriminate
● Asset Data:
○ LIDAR scan
○ RADIANCE/DAYSIM simulation
○ Standard local weather data
● Operational Data:
○ None
○ Potentially this could be added to make an even more convincing tool.
● Visualization Tool:
○ Interactive map which color codes solar suitability on roofs
■ Users can search for specific addresses or zoom and move map
■ Generates numerical breakdowns for individual roofs of solar potential, financial
costs, and environmental benefits.
■ Provides an installation overview.
While not an efficiency or energy consumption map, the Cambridge Solar Map demonstrates the power
of an interactive map for relating energy information to individual homeowners and to community groups.
Developed by MIT’s Sustainable Design Lab, the map color codes roofs for excellent, good, or poor
photovoltaic potential. The data used to build the map includes a LIDAR scan of Cambridge to establish
urban geometries, a solar radiance simulation model built by Christoph Reinhart, and local weather
station data. The developers used the specifications of a SunPower 185-watt panel to calculate the
annual PV generation.
Users are able to search a specific address or manually move the map and select buildings. Upon
selection, the “Solar Tool” generates PV related information for that building if it has a ranking of
excellent or good. This information generated includes estimates of potential PV size (kW), annual
electricity generation, cost of installation, tax credits and rebates, annual revenue, payback time, and
environmental benefits. The map also provides links to find out more about how to get a PV system
installed.
The power of the Solar Map is that individual homeowners can quite quickly determine whether their
home may be suitable for solar power and see and estimate of financial benefits for installing a system.
Installers or other community groups can use the map to target specific homes or neighborhoods which
would benefit the most from PV installations. Individual homeowners may be able to convince neighbors
to also install solar, and perhaps negotiate a group discount on contractor cost. One of the map
developers also noted that they compared the map to an existing MIT solar installation. The solar
installation seemed to be under producing based on what the map predicts. The system is currently
being analyzed, but this suggests that the map could also be used to verify system performance after
installation.
The Sustainable Design Lab is continuing to work on the map. In the future, they would like to develop a
tool to outline panels on a roof to get more specific information about system configuration. They also
recognized the potential of incorporating actual energy consumption data to enable house-to-house
comparison and augment the financial incentive calculations.
If possible to generate, a community efficiency map could benefit from leveraging similar features to the
Cambridge Solar Map. These include:
● Simple, easy-to-understand color coding
● User-friendly searching and moving
● Speaks to multiple user groups - individuals, community groups, contractors, utilities, and
government agencies
● Includes estimates of savings and financial incentives
Case Study – Next Step Living
http://nextstepliving.com
Next Step Living is a one-stop-shop for home energy assessments and weatherization.
● Building Type: Residential
● Asset Data:
○ Audits
○ Infrared Imaging
○ Blower Door Tests
○ Tax Assessor Records
● Operational Data
○ Utility bills
■ 12 months pre-installation and 12-months post-installation
○ Energy assessment database
● Visualization Tool:
○ Heat Map compares tax assessor record characteristics to audits of similar homes in the
NSL database
Next Step Living (NSL) is a Massachusetts-based turnkey home energy assessment and weatherization
provider. NSL accounts for 90% of the home performance market in Massachusetts and will be
expanding to Connecticut and Maryland. The four-year-old company conducts 25,000 home energy
assessments per year and expects that number to continue to grow.
NSL collects twelve months of utility data from customers before they complete a weatherization of their
home. NSL also asks for 12 months of energy data post-installation. Using this information, NSL is
building a detailed database of home energy audits. Using 20,000 homes worth of data, NSL built a
“Heat Map” of Somerville. They used a handful of important data points pulled from tax assessor
records to compare Somerville homes to similar homes in their database of audits. They color coded
homes so that “hot” homes were the ones with the most potential for upgrade.
Next Step Living’s Heat Map is leveraging an increasingly popular method of analyzing home efficiency
performance by comparing remote, publicly available housing data (from tax assessor records) to
historic energy audits of similar buildings. This enables contractors to develop building profiles before
contacting potential customers. They can identify neighborhoods and communities that offer the
greatest opportunity for savings and target their outreach efforts there.
Case Study - Retroficiency
http://www.retroficiency.com/
Creates building audits with minimal information by using algorithms to model building performance and
making comparisons to prototypical buildings with same characteristics from historic audits.
● Building Type: Commercial
● Asset Data:
○ Builds increasingly accurate building profile, but starts with basic info and improve over
time by augmenting with more information.
● Operational:
○ 15-minute interval data
○ 12 months of historical energy data
Retroficiency developed two different tools to conduct remote energy assessments which are highly
accurate. Retroficiency leases their tools to energy auditing businesses or to utilities which are able to
conduct audits in less time and with less demand of inputs from property owners.
Retroficiency’s Virtual Energy Assessment (VEA) requires only an address and 12 months of historic
energy consumption data to identify end use loads such as heating, cooling, and lighting. (VEA may
also use 15-minute interval data from clients if they have smart meters installed.) VEA can identify
building usage patterns and recognize moments of inefficiency such high use during periods of low
occupancy. From these analytics, VEA can make recommendations for upgrades or performance
measures to reduce energy use.
Retroficiency also offers an Automated Energy Audit (AEA) which uses limited building asset information
to make accurate energy profiles of a building. A building owner or property manager can enter in just a
few building characteristics and the AEA will compare that building to Retroficiency’s library of
thousands of actual audits to build an energy model of the building. As the property manager enters
more information overtime, the model becomes more accurate. Similar to the VEA, this is a remote
energy assessment tool and it also makes efficiency recommendations.
Retroficiency does not currently work in the residential sector though it has been building a database of
multi-family [bigger than houses or garden-style apartments] energy models. In an interview, CEO
Bennett Fisher indicated that Retroficiency’s VEA and AEA tools could be modified to work for
residential homes if demand existed in that market.