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Austin, Texas

Austin Energy's Clean Energy Accelerator

Location: Austin, Texas
Seed Funding: $10 million
Target Building Type: Residential and Multifamily
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Austin Energy Accelerates Residential and Multifamily Efficiency Upgrades

In Austin, air conditioners hum constantly from April to October. That's why it's important that homes and other buildings eliminate air leaks to ensure efficiency. That's also why contractors often find themselves with more than enough work during some months of the year, but are quite slow in others, often resulting in layoffs. Austin Energy's Clean Energy Accelerator is using 28 years of experience with energy efficiency programs and $10 million in seed funding from the U.S. Department of Energy's Better Buildings Neighborhood Program to promote a whole-house approach to energy efficiency. The Clean Energy Accelerator first kicked off with a wintertime campaign that offered Austin homeowners upgrade incentives and provided energy conservation companies a steady stream of business during a traditionally slow period.

Driving Demand: The "Best Offer Ever" Leads to Early Win
Workforce Development: Professionals Benefit With Specially Timed Incentives
Financing: Financing Made Easy With One-Hour Loan Approval Turnaround

The "Best Offer Ever" Leads to Early Win

In winter 2010, Clean Energy Accelerator rolled out its single-family residential energy "Best Offer Ever" promotion, a three-month special that combined rebates and no-interest loans for energy upgrades. In the past, Austin Energy's Home Performance with ENERGY STAR program participants had to choose between rebates and low-interest rate loan for home energy upgrades.

The Best Offer Ever promotion was only offered for a limited time, and within the first 60 days it received more than 600 applications; 40% of which qualified for and received loan approval. The promotion covered 40% of the cost of a whole-house energy efficiency improvement and involved about $1,200 of additional incentives per household compared to Austin Energy's typical offer.

A total of 568 participants received Home Performance with ENERGY STAR upgrades through 47 contractors in six months—that's 10 times more upgrades than Austin Energy's typical participation rate. An initial billing analysis has revealed an average savings of 15% in those homes; multifamily units are projected to save 18% on utility costs. Homeowners can expect improvements to pay for themselves within approximately five years.

Professionals Benefit With Specially Timed Incentives

To ensure a successful Best Offer Ever promotion, Austin Energy hosted a collaboration meeting with the contractors who help homeowners achieve Home Performance with ENERGY STAR. These contractors agreed to help market the promotion with billboards and other advertising. Austin Energy also worked with the contractors to shorten the time lag in payments that sometimes occurs while homeowners wait for their energy upgrade rebate reimbursement from the City of Austin.

The City of Austin typically has a six-week turn-around time on invoice payments. Under the Best Offer Ever promotion, customers could assign their rebates directly to the contractor, and Austin Energy developed a faster turn-around payment system that delivered electronic rebate reimbursement directly to the contractor within two weeks. As a result, these professionals passed the discount onto the homeowners who had assigned their rebates to them.

The Best Offer Ever promotion was considered a major success for the energy service companies that had previously struggled with wintertime workflow. Many not only retained all their employees during and after the promotion, but they had to hire more professionals to meet demand, creating local jobs. Crews were working seven days per week, which was previously unheard of in the winter season. One company in particular reported its largest revenue for the month of December since opening in 1978. While a good December in years past would yield the company $800,000, the Best Offer Ever promotion helped it generate more than $2 million in revenue.

To sustain the energy efficiency momentum, Austin Energy is providing bonus incentives so demand for contractors does not come to a sudden halt once promotion-related work is completed. Austin Energy is also developing an expanded program to serve multifamily building owners.

Financing Made Easy With One-Hour Loan Approval Turnaround

Because financing is often a barrier to residential energy upgrades, Austin Energy is implementing a suite of financial products aimed at increasing customer access to whole-house energy efficiency. To make it easier for both businesses and homeowners to finance their energy efficiency upgrades, Austin Energy's lending partner offers a loan approval turnaround of about an hour. Austin Energy is also considering expansion of its existing financing mechanisms such as the Home Performance with ENERGY STAR Loan Program, Solar Photovoltaic Loans, and third-party financing.


Scott Jarman

U.S. Department of Energy
Better Buildings Neighborhood Program