How to Retrofit 1,700 Homes in Seven Months

Q&A with Dana Fischer, Residential Program Manager at Efficiency Maine

In the summer of 2010, Efficiency Maine established a residential energy upgrade program known as the Home Energy Savings Program (HESP) utilizing a US DOE State Energy Program grant funded by the Recovery Act. This grant offered incentives to eligible homeowners to conduct whole house energy upgrades. The program realized strong demand thanks to effective marketing and sales training and a strong workforce of energy auditors and contractors. HESP completed 1,700 whole house energy upgrades in over 225 towns and averaging 36 percent energy savings per year.

“We informed our friends at DOE that Maine has a unique mix of factors to make for a successful residential program including one of the nations’ oldest building stocks, high energy costs, long and cold winters and an overreliance on heating oil,” said Dana Fischer, residential program manager for Efficiency Maine. “We can retrofit however many homes they want.”

We were dying to know more about this story, so we spoke with Fischer, and he had some really great insight that we don’t want to keep hidden.

Q: What were the initial program goals for the Home Energy Savings Program?

A: Efficiency Maine was given a $10 million grant from SEP (State Energy Program) with $6 million of that to direct to incentives for homeowners to generate an average of 25 percent savings in 4,000 homes or 50 percent savings in 2,000 homes.

Q: What kind of home energy use were you facing when you started this program? What factors are unique to Maine?

A: Maine has one of the oldest and leakiest housing stocks in the nation. It also has the nation’s highest use of home heating oil per capita, or approximately 71 percent. When the price of oil goes above $100 a barrel, Mainers feel the pain more than almost anywhere else in the country. So there’s a tremendous need and sense of urgency to save energy.

Q: What were your initial marketing efforts to get the program rolling?

A: The program really didn’t start in earnest until May 2010, and the uptake was slow for the first few months. We were thinking, how are we going to achieve our program objectives at this rate? So we knew that we had to course correct.

We launched a two month media blitz targeting television, radio and print media. This marketing push, coupled with a $1,000 limited-time bonus summer incentive made a significant difference.

Q: Did the “media blitz” and limited-time bonus incentive work?

I think that the big lesson of the program is that program offer deadlines work. Deadlines motivate people almost as much if not more than incentives. If people are worried about missing out on a good opportunity they will respond

When we launched the summer incentive we said all of the work had to be done by August 31, but there was no way that the industry could satisfy this given the strong demand. Contractors were saying, “We’re turning people away.” So we ultimately decided to extend the deadline and told them, “Have the audit and work completed by the end of year, and you get the summer bonus.”

After August, the marketing push stopped, and all of the interested homeowners were coming through by word of mouth from there on out. The industry was just rolling. We spent hardly anything on marketing after September.

Q: How many homes is this program going to retrofit?

It’s estimated we’ll retrofit 2,500 homes by the time the funds run out this summer. As of April 2011, around 1,880 homes have been retrofitted with an average of 36 percent energy savings and over $16,000 in net lifetime savings.

Q: How much energy has been saved so far?

We’re saving somewhere around 300 gallons per home, times 1,880 homes, equals around 564,000 gallons of oil per year (as of April).

Q: How do you measure program success?

One way to measure success is by measuring the amount of energy saved and the number of homes that have benefitted substantially from energy savings month after month. We had to use extra funds for the summer bonus incentive. If there was a failing, it’s that we didn’t have a metric for knowing how many people were going to take advantage of the summer incentive, but it was a pilot program. That’s what we were trying to figure out. What’s working and what’s not working and how can we fine tune and optimize performance accordingly in real time.

Q: How does the program measure customer satisfaction?

Homeowners that complete the process fill out a completion form where they have the opportunity to rate their satisfaction with the program. The rating homeowner gives is shown next to their participating energy advisor’s listing on the website so future homeowners can use that rating to decide which energy advisor to work with. We are also in the process of conducting a thorough evaluation study which should provide qualitative and quantitative data on customer satisfaction, etc.

Q: What keeps you up at night?

There are plenty of things that keep me awake. The greatest concern is that we meet the expectation of homeowners and that the contractors in the field doing the work are delivering good results.

In this economy, there have been so many people joining the industry. A lot of the energy advisors have transitioned out of being builders or from other fields. Just because someone has BPI training doesn’t mean they’re a good businessman or that they don’t make mistakes. There’s no way of guaranteeing that everyone that participates in this program is going to be satisfied. I don’t know if there is a reasonable way that you can guarantee good outcomes for everyone. But I believe we have an exemplary program that has demonstrated real value and significant investment potential.

Q: What advice would you give to other program managers with similar retrofit programs and goals?

Focus on building the relationship and the pathways for homeowners to contact a good core of contractors and weatherization experts. And stick with standard marketing practices. Don’t get caught up in the things that are unproven. It may be boring to go through the standard channels (radio, television and newspaper), but they’re the standard channels because they’re proven. Outside of that, word of mouth is powerful. I just don’t think people are going to take on a $10,000 retrofit from seeing a Facebook Ad.

Q: With only a few months left for the Home Energy Savings Program, what’s next?

We’ve pretty much told the folks at the Department of Energy that we have the secret sauce. We can retrofit however many homes they want, and we’re both looking at establishing a successful energy upgrade loan financing product that’s sustainable and can help attract investors in the secondary marketplace.

We’ve received a $30 million DOE funded BetterBuildings grant from the Recovery Act, $20 million of which is being used for our Maine PACE revolving loan program. Maine has established junior lien status PACE through enabling legislation in April 2010. We have received an endorsement for our Maine PACE program from Federal Housing Finance Authority. And our underwriting standards are in harmony with HUD’s emerging PowerSaver loan program and national banking industry best practices.

Dana Fischer is employed by Efficiency Maine as a Residential Program Manager working to implement PACE financing for the Home Energy Savings Program. He has a background in Maine based solar thermal equipment manufacturing and design including a great deal of tinkering on his own home. He is an MBA with a BA in Philosophy, has a Master Brewers Certificate from UC Davis, is a BPI certified energy auditor and has spent time working in fields varying from municipal finance, to semiconductor related orbital welding, to micro-brewing. His home, kept at 68F all winter in Maine, uses less than 200 gallons of K1 per year employing solar hot air and solar hot water systems of his own design.

This is the first of a series of industry best practice articles that EnergySavvy is going to publish. If you’ve got a good idea for a program or story for us to cover, let us know.

  • Bobp

    What are the incentives you pay per house above and beyond the $1000 summer bonus? Our incentives in WI. average ~$600 per household.
    Do you include high efficiency heat plants in your program to get the high savings?
    We have a EECBG grant in Madison and Milwaukee, but lost ability to obtain PACE financing. Sounds like your State legislature made provisions for you?

    Very good to hear you have such great results. Lead on!

  • http://www.efficiencymaine.com Dana Fischer

    Thanks for the questions. Last year we had a 2 tier rebate structure. $1500 for installing sufficient measures to generate an expected home heating energy savings of 25%, and $3000 to exceed a 50% reduction. With slow uptake last spring, we added the $1000 “summer” bonus to both tiers which kicked off the ramp to 1700 jobs completed before the end of the year. The activity was so rigorous that we dropped the top tier and the bonus to maintain enough funding to overlap with the launch of Maine PACE on April 4th. We currently have about (300) $1500 rebates remaining.

    Upgrading to high efficiency heating equipment counts toward the expected savings percentage as does airsealing and insulation.

    Maine PACE is of the junior lien variety and is supported by FHFA. Check out our website for details. http://www.efficiencymaine.com/PACE