Seed Funding: $30 million
Target Building Type: Residential
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Read about innovative approaches
Read Efficiency Maine: 2011 Year in Review
Read Efficiency Maine annual reports
Read Evaluation of the Efficiency Maine Trust Pace Loan Program: Interim Impact Report
Read "financing and incentives" case study
Read "workforce" case study
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View contractor webinar March 2012
Efficiency Maine Offers Sustainable Upgrades for the Future
While Maine has one of the highest homeownership rates in the country, more than one-third of residences qualify for low-income programs. The state has established a 20% energy reduction goal by 2030, which includes weatherizing all residential properties. Using $30 million in seed funding from the U.S. Department of Energy's Better Buildings Neighborhood Program to jump-start its program, Efficiency Maine is making residential energy efficiency upgrades more accessible to homeowners and accelerating progress toward meeting these ambitious goals.
Efficiency Maine is building a foundation of financing and upgrade incentives to continue for at least 10 years beyond the initial grant period. The program plans to leverage $32 million each year for home upgrades beyond the grant's initial three years.
Driving Demand: Deadlines Spur Homeowners Into Action—and Savings
Driving Demand: Advertising Spurs Interest, but Trust is Still Critical
Financing: Keeping PACE With the Demand for Financing Upgrades
Workforce Development: Growing a Qualified Workforce in Maine
Deadlines Spur Homeowners Into Action—and Savings
Sometimes it doesn't matter if a home is old or new; cold living spaces, drafty windows, and high heating and cooling costs can be a reality in a two year old home or a 40 year old home. Owners of all types of Maine homes typically rely on heating oil during the winter months to keep warm. The price of heating oil was more than $3 per gallon in 2011, making the average projected cost of heating a home in Maine roughly $3,000 per heating season. To help homeowners stop wasting energy and realize cost savings, Efficiency Maine is helping residents find and take advantage of existing rebate programs and new financing opportunities.
Residential participants often receive rebates based on the level of improvements they made—for example, $1,500 for a 25% increase in energy efficiency. To motivate homeowners to make energy upgrade decisions, Efficiency Maine added a twist to its rebate program: a tight deadline. If homeowners completed an assessment before the end of 2010 and submitted a rebate reservation before Memorial Day 2011, they could receive $3,000 for a 50% increase in energy efficiency.
By establishing a sense of urgency to capture rebates during a six-month period, Efficiency Maine encouraged homeowners to make the decision to upgrade quickly. This strategy successfully increased the uptake rate of actual upgrades after the home energy evaluation. With project completion required by the end of September 2011, more than 3,200 homeowners took advantage of the rebate program, saving a projected average of 40% of whole home energy consumption.
Advertising Spurs Interest, but Trust is Still Critical
Building on this initial effort, Efficiency Maine continues to work to drive demand and encourage long-term investment in the energy efficiency market. During winter 2012, Efficiency Maine conducted radio and television advertising. After the advertisements ran, there were periodic spikes in call center volume and evidence that many people had seen these advertisements, but the number of applications and loan closings remained steady. While creating buzz for the program is critical to making homeowners aware of Efficiency Maine's programs, these advertising results reinforce the fact that securing a loan is not a quick decision for most homeowners. Program participants indicated that referrals from friends, family, neighbors, and trusted contractors are critical in the decision to take on a major energy upgrade project.
Keeping PACE With the Demand for Financing Upgrades
Maine's existing energy efficiency programs were already providing energy evaluations and upgrades. Prior to receiving seed funding from Better Buildings, however, the state lacked a financing option that would make energy efficiency improvements more feasible and attractive to homeowners by reducing upfront costs and allowing for immediate energy savings.
Efficiency Maine has established a $20.4 million revolving loan fund and launched the Maine property assessed clean energy (PACE) financing program. The Maine PACE program provides junior lien secured loan financing that allows homeowners to pay back loans through separate billing statements at 4.99% fixed financing for 15 years. If the property is sold, the loan can be assumed by a new owner or paid off early with no penalty. PACE ordinances have been passed in nearly 100 municipalities representing 57% of the state's population, and there is interest from many more to join.
Municipalities are opting to have the PACE program administered on their behalf by Efficiency Maine with no cost, obligation, or liability on the part of the towns or local officials. By having a similar relationship with a multitude of municipalities, the program provides statewide uniformity and economies of scale. After one year of offering Maine PACE, Efficiency Maine had used the program to fund 171 residential weatherization projects with a total loan amount of $2.2 million. With an average loan size of $12,900, homeowners are making deep energy efficiency upgrades the norm, often exceeding 45% projected energy savings.
To promote the PACE program, Efficiency Maine continues to work with the property tax bill service providers to insert PACE pamphlets into tax bills. This has proven to be a cost-effective channel to increase calls to the program's call center and hits on the PACE-related website pages. PACE loan activity has been steady and appears to have a spillover effect when promoting weatherization to homeowners who do not need financing through PACE. Efficiency Maine is also working to expand PACE ordinances to additional municipalities in the state. As a result of television advertising, Efficiency Maine saw an increase in the number of residential inquiries in towns not yet participating in the PACE program, and several municipalities have placed that specific issue on the agenda for upcoming annual town meetings.
In April 2012, Efficiency Maine announced the availability of U.S. Department of Housing and Urban Development (HUD) Title 1 PowerSaver loans for weatherization. PowerSaver enables homeowners across the entire state to access financing up to $25,000. Efficiency Maine hopes that the addition of PowerSaver will make financing even more attractive and continue to reduce the state's per capita oil dependence.
Growing a Qualified Workforce in Maine
Even though Efficiency Maine began with an existing workforce of more than 500 energy professionals, Maine's energy efficiency contractors had to hire more professionals to meet demand during the program's six-month, deadline-oriented incentive period.
Efficiency Maine provides training for contractors on customer interaction techniques and audit to retrofit conversion strategies. More than 100 energy professionals have participated. Trained professionals are recorded in a ZIP code-searchable database and ranked by the number of upgrades they have completed. Because customers gravitate toward more experienced professionals, this approach gives qualified professionals an incentive to demonstrate their experience by selling more upgrades.
U.S. Department of Energy
Better Buildings Neighborhood Program