An active area for energy efficiency is affordable housing. That sounds ironic: How can a sector in which end users are cash-constrained be a hotbed of activity? The answer is simple: The reality that tenants are on a set income makes those that serve them look elsewhere for profits -- and energy efficiency is one of those areas.
Last month, Energy Manager Today discussed this counter-intuitive reality in a post about WegoWise, a company that tracks the use of utilities in the affordable housing sector. The rationale actually is fairly simple: The rent paid by families in affordable housing is limited to a certain percentage of their income. The rent can’t be raised (unless the family income goes up). Thus, the only way for building owners to make more money is to reduce costs. A great way to do this is to lower utility bills through increased energy efficiency.
The bottom line is that affordable housing efficiency efforts are a distinct category that use different financial equations than situations in which costs can be passed on to residents in the form of higher rents or assessments.
Peabody Properties, a real estate firm that works with WegoWise, said this week that it is on its way to reducing to reducing energy consumption by 20 percent at its properties during the next decade as part of its participation in The Department of Energy's Better Buildings Challenge. A big part of that reduction, the company said, will come from its holdings in the affordable housing sector.
Liz Merzigian, Peabody’s Facilities Manager for Sustainability Initiatives, said that the company works with 130 affordable housing sites. Almost all are in Massachusetts; only one – in Miami – is outside of New England.
In Massachusetts, Peabody works on affordable housing through Mass Saves, which is sponsored by seven utilities. It is co-administered by the Low-Income Energy Affordability Network (LEAN). The program is open to non-profit and for-profit companies and housing authorities.
The Mass Saves program offers discounts and other assistance to qualifying affordable housing served by one of the sponsoring utilities. Thus, a structure served by a participating electric utility and nonparticipating gas company could get help with lighting retrofit but not heating and cooling equipment, for instance.
Merzigian said that affordable housing represents 80 percent to 85 percent of Peabody’s portfolio. The company has spearheaded some sizable projects. Near the end of 2014, for instance, the company was involved in a million dollar upgrade to heating equipment in Braintree Village, a 324-unit affordable housing community in the Massachusetts city of the same name.
Merzigian said that the key was bringing heating equipment from the roof – where they were exposed to the elements – inside the facility. The first winter of operations resulted in energy savings of $96,000. Greater savings is expected next winter, she said.
Merzigian said that during the life of the program, there have been $6.5 million in lighting upgrades and almost $3 million in how water and boiler work. Lighting, not surprisingly, is the low hanging fruit. Other work tends to be more intensive.
The first step is the most important: To embark on a project. It can be intimidating,” she said. “You just have to start. There is a lot of information out there, you may not be sure which way to turn, what phone numbers call and papers submit.”
The next step, Merzigian said, is to get tenants involved in energy efficiency. It is tricky, since they don’t directly benefit in lower rents. “Engaging people in trying to save energy is harder than changing a light bulb, especially when you are not paying for it,” she said.
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