Multifamily Energy Efficiency Programs: The Black Sheep?

by ‐ Tags: current events, affordable housing

In 2009, multifamily residents spent $22 billion in energy utilities, amounting to roughly 10% of the total residential spending on utilities. If you think that’s a significant chunk of cash, by 2025, spending on utilities in the multifamily sector is predicted to increase an additional $15.9 billion.  This increase represents a significant opportunity to use our utility resources to improve the energy efficiency of multifamily homes, which tend to receive the short end of the stick when it comes to utility funded energy efficiency programs.  Last week, the American Council for an Energy-Efficient Economy (ACEEE) published a report, “Scaling up Multifamily Energy Efficiency Programs: A Metropolitan Area Assessment,” with all the information your heart could possibly desire about multifamily energy efficiency programs.  Didn’t have time to read the report yet? We’ll break it down for you.

The Skinny:

ACEEE already knew from a previous study they published with CNT Energy that multifamily programs possess significant potential for energy and cost savings.  They found that leading multifamily energy retrofit programs, like the LEAN program, can cost effectively reduce energy consumption by 30% for natural gas and 15% for electricity, translating to almost $3.4 billion annually nationwide.  The goal of this study, tied into ACEEE’s previous findings, was to identify the potential for improvement of multifamily energy retrofit programs. To do this, ACEEE had to perform a baseline assessment of the current landscape of multifamily energy efficiency programs.  ACEEE surveyed 50 metropolitan areas with the largest housing markets. Based on local housing market characteristics, currently utility customer-funded energy efficiency programs, and the statewide policy environment and potential for local partnerships with non-utility energy efficiency programs, ACEEE then recommended specific opportunities for each metropolitan area to improve their current programs.  

What they found:  

While over half of the metropolitan areas analyzed have energy efficiency programs targeting multifamily residences, the spending on these programs is significantly lower than spending on other energy efficiency programs.  Boston and Austin are the only two cities where multifamily spending accounts for more than 10% of the overall spend.  New York, defined by ACEEE as one of the “leaders” in multifamily energy efficiency programs, only allocates 2% of its overall spend to multifamily programs! Boston area utilities spend nearly $9 per residential customer on multifamily programs, while the median for all 50 metropolitan areas was a mere $0.72 per residential customer.  Although there are a handful of cities besides New York, Austin and Boston who are leaders in multifamily programs, as well as several with comprehensive programs rather than just rebate programs, many of the cities surveyed have the potential to expand their existing programs, or create new programs.  Check out the table below to find out which category your city falls into:     


You may have guessed it, but ACEEE recommends increased spending for multifamily programs. With the $0.72 median spend per residential customer, there is certainly room for improvement! ACEEE also recommends that programs take on deeper, comprehensive retrofits, rather than just one-off energy efficiency measures. Of the 50 metropolitan areas, only 20 offer comprehensive approaches for retrofits or new construction. 16 provide direct installation of no or low-cost measures, while 38 offer rebates and incentives.  

Wego’s Two Cents:  

One of the challenges discussed in the report is the diverse building ownership and the financing structures that shape decision making. This comes into play when addressing energy efficiency programs for affordable housing.  Public and assisted multifamily buildings are less likely to qualify for traditional energy efficiency programs that target low-income, unassisted utility customers.  However, from analyzing our database of 12,000 buildings, we have found that in the multifamily sector, affordable housing performs significantly worse than market rate housing, and that public housing performs worst of all.  This graph, from our database, demonstrates the difference in energy use in the multifamily sector for public housing, affordable, non-public housing, market rate, and green certified buildings.  


For an in-depth look at the savings of improving just 1,464 Massachusetts buildings in our database that we’ve defined as “poor” performers, check out our blog about our affordable housing benchmarks from the LEAN Inventory, one of the leading programs discussed in the ACEEE report.