By Ed Love, Program Manager at Michigan Energy Options with contributions made by Ariana Gonzalez of NRDC

This past May saw the launch of a new energy efficiency pilot in Michigan. The Consumers Energy program designed specifically to meet the needs of multifamily affordable housing. Elevate Energy, a Chicago based non-profit, Michigan Energy Options, an East Lansing-based non-profit, Michigan Saves, a Lansing-based non-profit and the Michigan State Housing Development Authority, joined forces with Consumers Energy to tailor a program to meet this housing group’s distinct set of challenges and opportunities.

Multifamily Affordable Housing Need

Who are we talking about and why do they need a tailored program? National multifamily occupant characteristics show that:

• 28% are below the poverty line;
• 13.5% of a family’s monthly income is spent on energy compared to the median household who spends 7%; and
• HUD-assisted renter families with rent assistance spend 1/3 of their housing costs on energy. Comparatively, the average household only spends 1/8 of their housing costs on providing energy to their home.

Clearly, this housing group is spending a disproportionate amount of money on energy. Possible explanations include the fact that:

• only 2% of multifamily units have received an energy audit,
• 63% of units are poorly or only adequately insulated,
• 30% of units have heating equipment that is over 20 years old,
• or that 60% of units have heating equipment not routinely maintained.

Traditionally, multifamily affordable housing is considered hard to reach, but Michigan Energy Options’ Energy Savers “One-stop shop” program proves that groups are beginning to break through.  To qualify, a multifamily housing facility of 5 or more units must have at least 66% of its residents earning less than 200% of the federal poverty level.

“One-Stop Shop” Breakthrough

The “one-stop shop” not only provides a model for access, but a model for resounding success with a typical energy savings of 20-30%. What makes the program so effective is its comprehensive, yet streamlined process where the building owner has a single point of contact throughout the entire pursuit for deep and persistent energy efficiency.  The program walks the building owner through an energy analysis and on-site assessment, cost-effective energy saving recommendations, low-cost financing options with the help of Michigan Saves, contractor bids, construction oversight and quality assurance, utility incentives, and post-retrofit energy use monitoring. We act as the building owner’s advocate in assuring that energy efficient improvements are a good economic decision.  Aside from the measurable savings in lower utility bills for “the house”, there are other economic advantages to be had, such as tenant retention, shifting of energy allowance funds to rental income and more.  Most improvements are eligible for “reserve” funding, which helps building owners utilize capital that is usually reserved for improvement made under a capital need assessment.

The pilot’s goal is to touch 1,224 units in 79 buildings and utilize $400,000 worth of incentives over the next two years. Based on a typical centrally heated, 3-story, 24-unit masonry structure with 24,000 square feet of heated space, measures such as air sealing, roof insulation, boiler replacement, boiler controls, radiator replacement and CFL installations can result in savings on energy costs reaching $44,350 in 5 years. Seeing approximately the same level of success in these 1,224 units could translate into over $2,200,000 in energy cost savings in just 5 years!

Achieving Energy Efficiency for All

The launch of the Michigan Consumers pilot is one important step towards achieving energy efficiency for everyone. Energy efficiency is an incredible resource that can address so much more than just the burden of high energy costs. It can provide a more comfortable, affordable living space, reduce pollution, create healthier living environments and maintain affordable housing–particularly meaningful for this group. As Michigan continues to push toward higher renewable and energy efficiency standards, look to programs like this to be the model for clean and comprehensive energy solutions.

To apply for this program or for more information contact Ed Love at Michigan Energy Options at 517.337-0422, ext: 303 or via email at elove@michiganenergyoptions.org. Or visit their website at michiganenergyoptions.org and complete the online application.

Want to hear more? Join in our webinar with MEO and Michigan Saves on Thursday, Sptember 25 from 12-1pm. Register here.